Standard Chartered economists Hunter Chan and Shuang Ding argue that China has weathered the recent Middle East Oil shock relatively well due to its diversified energy mix and long-standing focus on non-fossil energy. They highlight policy targets in the 15th Five-Year Plan to raise the non-fossil share and note that rising geopolitical risks could boost global renewable demand, benefiting China but also raising trade friction risks.

Non-fossil targets and geopolitical tailwinds

"Based on March data, China seems less affected by the energy supply shock from the Middle East conflict, as oil and natural gas are not its dominant energy sources."

"China’s focus on the non-fossil energy transition and energy security for the past two decades is likely paying off."

"While fossil fuel (including coal) is likely to remain an important energy source for security considerations, China’s energy transition will continue, anchored by its policy goals of peak emissions by 2030 and carbon neutrality by 2060, in our view."

"The 15th Five‑Year Plan (FYP, 2026-30) aims to lift the non‑fossil fuel share of total energy consumption to 25% by 2030 from 21.7% in 2025, and longer-term to over 30% by 2035 and over 80% by 2060."

"Rising geopolitical uncertainty and more frequent energy supply shocks could rekindle global interest in renewable energy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)