OIES Podcast – China, Iran and the Five-Year Plan

The US and Israeli attack on Iran coincided with what was already an eventful week in China, especially with the conclusion of the Two-Sessions of the National People’s Congress and the publication of the draft 15th Five-Year Plan (15FYP) Outline.

In today’s podcast, Michal Meidan and Anders Hove dig into the implications of the new energy crisis for China, as well as what China’s electrification of transport really means for energy security.

• China is the world’s largest oil importing country, and it gets a large share of its oil from the Middle East. The Strait of Hormuz has been a potential energy choke-point for China for decades. But this doesn’t make China inherently the most vulnerable country to oil disruptions – though gasoline prices have spiked and gas lines have been reported.
• New Energy Vehicle (NEV) adoption is an ongoing trend, but the picture is complicated here as well. Even though NEVs are over 50% of the new vehicle market, they constitute only 12% of the vehicle stock. In fact, China’s freight sector is seeing a faster transition to electrification. China is far less reliant on cars for personal transportation than other large economies, which also reduces its vulnerability.
• Chinese policy makers are clearly focused on economics and energy security over climate and clean energy – that has been clear for several years. The FYP makes some nods towards electrification of trucking and transportation, but not breaking new ground. The document supports an all-of-the-above strategy, as well as providing something for everyone – especially coal-to-gas and coal-to-chemicals, which have implications for local development as well as energy security.

Today’s podcast builds on two OIES papers, ‘Disruption in the Strait of Hormuz: Implications for China’s energy markets and policies’, published earlier this week, and a paper on China’s NEV developments to be released shortly.

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