- In 2012 China consumed 50.4% of all coal produced on Earth. Most, but not all of that coal was produced in China, mainly from deep underground mines. Like Europe and the USA before it, China’s industrial revolution has been founded on coal that accounts for 68% of all energy consumed.
- In the 1980s, China exported both oil and coal and continued to export coal until as recently as 2009. But the country now imports oil, coal and natural gas in exponentially growing quantities. In 2012 energy imports accounted for 14% of energy consumption. This ever-growing participation in global energy markets is likely to resume upwards pressure on global energy prices.
- China has significant oil production of 4.2 million barrels per day (mbpd) but consumption is running at 10.6 mbpd, hence the country has significant oil imports. Gas production is well below what may be expected from the oil production data and gas consumption runs at only 5% of the total. Nor does China have a mature nuclear industry with nuclear power accounting for only 1% of primary energy consumption. Recently expanded hydro accounts for 7%. We have been told that China is embracing the new renewables revolution which now accounts for an astonishing 1% of all energy consumed!
Figure 1 Since 1993, China’s energy balance has plunged into the red. Energy imports of 386 million tonnes oil equivalent per year (mtoe/y) in 2012 is roughly equivalent to 2.8 million barrels oil equivalent per day. Note how imports of coal and natural gas have begun to increase. China’s exports of manufactured goods means that it can easily pay for these energy imports.
All of the energy statistics reported here are drawn from the 2013 BP statistical review of world energy . The economic and population data are drawn from the United Nations National Accounts Main Aggregates Database  and World Bank . All data sources are referenced on charts.
[Note: Dave Rutledge brought to my attention errors in the electricity statistics plotted at 21:00 hours on 10th June and Figures 7 and 8 were subsequently corrected.]
Energy Production and Consumption
Figure 2 China’s main indigenous energy resource is coal and it is therefore no surprise that coal dominates China’s energy production and consumption. The low levels of nuclear and gas production are a surprise. New renewables remain irrelevant although it needs to be noted that China has developed significant hydro electric power and with a state organised electricity supply system, the country could potentially balance significant wind and solar off hydro.
Dave Rutledge once told me that China’s coal resources were “all over the map”. By that he meant there is no single geological formation or area where coal is mined. China seems to have been covered by coal swamps for extensive periods throughout geological time. A surprising feature of Chinese coal mining is that most of it takes place in deep underground mines. Millions of miners have been killed but safety standards are now much improved.
Economic growth in China has been in lock step with coal production of roughly 10% per annum. I have for a long time been expecting coal production to lag economic growth and that this lag may subsequently become a drag. The switch to coal imports is the first sign of this happening and when Chinese energy imports once again hit global energy prices this will create a drag on the global economy and China.
Figure 3 Indigenous coal production has enabled China’s amazing economic expansion to take place. Without coal China would have been more dependent upon imported energy placing upwards pressure on global energy prices that would have placed a drag on China’s export orientated economy.
Figure 4 “Death trains” in China. In China pollution from coal is certainly a lethal problem.
Figure 5 The rise in China’s energy production is more than matched by the rise in energy consumption the difference between the two giving rise to the energy balance shown in Figure 1. The dog leg in 2001 corresponds to the start of the 10th 5 year plan that is discussed further below. China now consumes more energy than the USA! The industrialisation phase in China is over and growth in the economy will now shift to raising living standards of the population – more consumer goods, cars and vacations.
Figure 6 China does not have a diverse energy mix. The dominance of coal followed by Oil is plain to see. This is set to change in the decades ahead where nuclear will expand as will oil when growing prosperity leads to more cars and planes.
Figure 7 Like all other statistics in China, there is a dog leg up in electricity generation in 2001. Electricity is dominated by conventional thermal and that is dominated by coal. But with the opening of the Three Gorges Dam power scheme, hydroelectric power has grown to a very significant 17% of the total (Figure 8).
Figure 8 New renewables account for about 3% of electricity generation. Rumours of China embracing the new renewables revolution seem exaggerated. As already mentioned, China may be able to sensibly balance significant wind off its quite extensive hydroelectric power.
Figure 9 China is the most populated country on Earth with 1.4 billion souls. The rate of growth slowed dramatically in the mid 1990s as the one child policy began to bear results. But the population is still growing at a rate of 0.6% per year (9 million). Population growth is one of the drivers of phenomenal GDP growth.
Figure 10 China is developing the population structure of a developed nation with fewer young people and an ageing structure. If you look closely it is possible to see the larger number of males attributed to the killing of female babies under the one child policy. Chart from Zero Hedge 
China’s economy began to motor in 2001 with the inception of its 10th 5 year plan. This account in Wikipedia is worth reading .
Figure 11 Bilateral trade and growth lay at the core of the 10th 5 year plan that began in 2001. While maintaining balanced trade was an objective of the plan, China has run a structural surplus that took off since 2001 now totalling $2.5 trillion. This surplus is nothing like as significant as the US deficit that stands at $9 trillion.
Figure 12 China is a classic example of how energy is required to generate real GDP. The next multi-country chart plots this as GNI PPP and is perhaps more instructive.
Figure 13 There are a few key observations to make about China from this “work of chart” that is in progress. On average Chinese now use about 2 tonnes oil equivalent per year, similar to Portugal but less than the UK that uses 3, and Germany close to 4. For the same energy consumption, Portugal produces 2.5 times the per capita GNI. Chinese total and per capita energy consumption can be expected to continue to grow, perhaps to 3 to 4 toe per annum. This will continue to place enormous strain on the global energy system. While China’s GNI – energy trend is positive it is at a lower gradient, i.e. less efficient than all other countries. This may be down to a number of factors including 1) the GNI numbers are wrong 2) a polarised society with large numbers who are not economically active 3) low price manufacturing is undervalued and 4) real energy inefficiencies in the economy. At some point the Chinese planners will need to work out how to dog leg this prosperity trend upwards, aiming for that point of maximum power.
 BP: Statistical Review of World Energy 2013
 Maximum power principle
 UN: National Accounts Main Aggregates Database
 The World Bank
 Wikipedia: Five-year plans of the People’s Republic of China
 Zero Hedge: China’s Unprecedented Demographic Problem Takes Shape
Other countries in this series of posts
Egypt – energy, population and economy
Libya – energy, population and economy
Turkey – on its way to a mature economy
Ukrainian Death Spiral
Does the UK Economy Run on Energy or Hot Air?
Portugal – renewables to the rescue?
Belarus grows while Ukraine withers
Goodluck Nigeria – a failed state?
Germany: energiewende kaput?
America energy independence