How is China’s energy security affected by exogenous shocks? Evidence of China–US trade dispute and COVID-19 pandemic

Abstract

The trade dispute between China and the United States (US) since 2018 and the global COVID-19 pandemic since 2020 has significantly impacted China’s economic development. As China’s energy sources heavily depend on imports, its economic viability is becoming more and more risky. This study proposes a novel conceptual framework, involving macroeconomic, industrial and geopolitical factors, to evaluate China’s energy security as a major player in the trade dispute. This study also provides a comprehensive strategy for policymakers to make better decisions on reforming renewable energy patterns to guarantee energy security and achieve geopolitical advantages. The PESTEL (political, economic, social, technical, environmental and legislative) and SWOT (strengths, weaknesses, opportunities and threats) analytical methods are applied to evaluate the factors and attributes of China’s energy development and energy security in the current background. The China-US bipartite game reciprocity model and the QSPM (Quantitative Strategic Planning Matrix) analysis are conducted to assess which energy security strategy and policy are more suitable to deal with China-US trade dispute. To enhance energy security, China should diversify its energy supply chain, develop new sources of energy supply, advance the shale gas technology, popularise cleaner power-generation plants, increase nuclear-energy safety, introduce energy-conservation measures, promote alternative-energy vehicles, engage in international energy diplomacy, and rebuild international energy transaction and settlement systems.