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Journal of Geographical Sciences >

2022 , Vol. 32 >Issue 3: 377 - 400

DOI: https://doi.org/10.1007/s11442-022-1952-2

Research Articles

Energy globalization of China: Trade, investment, and embedded energy flows

  • YANG Yu , 1, 2, 3
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  • 1. Key Laboratory of Regional Sustainable Development Modeling, Institute of Geographic Sciences and Natural Resources Research, CAS, Beijing 100101, China
  • 2. College of Resources and Environment, University of Chinese Academy of Sciences, Beijing 100049, China
  • 3. Institute of Strategy Research of Guangdong-Hong Kong-Macao Greater Bay Area, Guangzhou 510070, China

Yang Yu (1984-), Professor, specialized in energy geography and regional studies. E-mail:

Received date: 2021-11-30

  Accepted date: 2022-01-10

  Online published: 2022-05-25

Supported by

National Natural Science Foundation of China(42022007)

National Natural Science Foundation of China(41871118)

Youth Innovation Promotion Association, Chinese Academy of Sciences(2018069)

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Abstract

China is in a critical period of transforming from the oil and gas era to the renewable energy era. To better understand the process of energy interaction between China and the rest of the world, this study aimed to investigate the basic theoretical cognition of global energy interaction and analyze the pattern and changes of energy interaction between China and the rest of the world with the method of complex networks, multi-region input-output analysis, and other technical methods. The main findings are as follows: (1) Chinas coal-based energy production structure and the huge demand for oil and gas indicate that ensuring overseas oil and gas supply is the most direct logic of energy interaction between China and the rest of the world, and the interaction scopes are mainly concentrated in oil- and gas-rich countries and regions. (2) With the development of renewable energy, the logic of energy interaction of China with the rest of the world has changed from countries and regions rich in oil and gas to countries with global renewable energy development and installation needs for its comparative advantages for manufacturing, which forms a renewable energy trade map that covers all major countries and regions in the world. (3) The overseas energy investment target of China has expanded from a limited number of host countries to Europe, Southeast Asia, and other countries and regions. The investment business is not only limited to the oil and gas field, but also expanded to solar energy, wind energy, hydro-power, and other renewable electricity generation projects. (4) As a global manufacturing and trading power, part of the energy consumed by China is embodied in the global production network and trade network for redistribution. The scope of energy interactions between China and the world will further expand to countries with general commodity trade relations with China, forming the global “energy hub” function. This study can provide a theoretical perspective and decision-making for a deeper understanding of the energy interactions between China and the world, maintaining national energy security, and participating in global energy economic governance.

Key words： energy globalization; energy interaction; energy trade; energy investment; embodied energy; energy transition

Cite this article

YANG Yu . Energy globalization of China: Trade, investment, and embedded energy flows[J]. Journal of Geographical Sciences, 2022 , 32(3) : 377 -400 . DOI: 10.1007/s11442-022-1952-2

1 Introduction

Traditional energy sources such as coal, oil, and natural gas have both economic and geopolitical attributes as have been demonstrated throughout the history of energy development, including coal, oil, and natural gas (Shen, 2003; Shi, 2013). Since the industrial revolution, traditional energy has been the basic power and raw material for economic development. The production, distribution, and utilization of traditional energy have become an indispensable part of the global political and economic structures (Yergin, 2006; Xu et al., 2017). Moreover, the globalization of resource allocation and factor flow is bound to be accompanied by economic globalization (Huang and Lu, 2016). In an interconnected global world, the supply and demand of energy can be realized via the global energy trade network. At the same time, the production, utilization, investment, and consumption of energy are all connected via different interactive processes associated with globalization, thereby forming an interwoven network. At different stages of globalization, the interactive relationship between global energy is essentially different. In contrast to oil and gas resources with a high degree of geographic agglomeration, renewable resources such as solar, wind, and water energy are more widely distributed. This means that most countries have the potential to develop one or more types of renewable energy. This wide geographical distribution of renewable energy has changed the geopolitical attributes of traditional oil and gas resources as well as the global energy network. The dominant position of oil- and gas-producing countries in the global energy supply market is beginning to decline. Countries that can produce key raw materials or products on which renewable energy development depends and those that can make large-scale investments in energy infrastructure (such as power grids) play an increasingly important role in the global energy market. Hence, an increasing importance of renewable energy will inevitably influence fundamental changes in the patterns of global energy trade.
The rapid economic development in China since economic reform and opening up of market in 1978 has intensified the demand for oil and gas. The energy needs of industrial development and urbanization stimulate the demand of China to obtain more energy. Moreover, the energy production structure of “rich in coal, poor in oil and gas” has led to the long-term dependence of China on overseas oil and gas imports. China became a net importer of oil in 1993 and natural gas in 2008. In 2019, the overseas dependence on oil and natural gas was as high as 70.8% and 43.1%, respectively. Hence, the global allocation of energy resources has become an important part of China’s economic globalization. Consequently, the most direct force that defines the interaction between China and the global energy market is the country’s need for stable oil and natural gas supply (Yang and He, 2020). This interaction not only includes oil and gas trade but also includes overseas energy investment as it is an effective way to ensure energy supply (Tan, 2013). From the 1990s to the early 21st century, under its “going global” strategy, China increased its efforts to obtain oil and gas resources from across the world. With the support of policy banks, the state oil companies invested in overseas energy resources to improve the share of overseas oil reserves and production. In the current era of renewable energy development, China is the largest producer and exporter of renewable energy products and has the largest installed capacity of renewable energy in the world. Furthermore, it is a large manufacturing country with a strong industrial production system. At the same time, the adjustment of the energy structure in China has resulted in a decrease in the proportion of oil and gas as fuel, while the proportion of oil and gas as industrial raw materials and production power has been increasing. Owing to industrial production, oil and gas are embedded in the global trade network and transported worldwide in the form of embodied energy (Chen et al., 2018). Besides, China has a strong capacity for infrastructure construction and overseas investment. It plays an increasingly important role in the production and investment of solar power, hydropower, wind power, and transmission networks worldwide (Chen et al., 2020).
The energy interaction between China and the world has undergone a major transformation—from the oil and gas era to the renewable energy era, from oil and gas trade to global energy investment, and from net oil and gas imports to the global transfer of embedded energy. Previous studies have focused on the different forms of relations with respect to energy trade, such as oil and gas trade, renewable energy trade, embodied energy trade, and international energy investment (Geng et al., 2014; Ji et al., 2014; Zhang et al., 2014; Hao et al., 2016; Guan et al., 2017; Li et al., 2017; Zhong et al., 2017; Schmidt et al., 2019; Shuai et al., 2020). The results of these studies have not been reviewed herein. This study aims to understand—both theoretically and empirically—the key force behind energy interactions between China and the world. The global interaction patterns of China and their changes in different periods and forms of energy utilization have been fully analyzed to better understand the role and function of China in facilitating global energy change.

2 Theoretical framework of global energy interaction

Energy is a special commodity as it is not only a fuel to provide power, but also an important raw material for the industrial production of goods. Moreover, it also has asset and geopolitical attributes. In the process of global transformation, different attributes and utilization forms of energy will lead to different energy interactions between China and the world. To systematically discuss this interaction from a macro perspective, three profound changes should be clearly understood. First, China has witnessed an intergenerational transformation from fossil fuels to renewable energy, during which its role and function in the global energy market have changed considerably. Second, with the development of renewable energy, the forms of energy utilization have changed—an increasing amount of fossil fuels are distributed in the form of embodied energy in the global production network via raw materials, intermediate products, and production power input. Third, the global energy market has undergone profound changes during different periods. When fossil fuels were used dominantly, the global energy investment of China mainly focused on obtaining a share of oil, and ensuring the safety of overseas oil and gas supply was the priority. Since the adoption of the Belt and Road Initiative in 2013, the overseas energy investment areas, investment types, and investment subjects of China have become more diversified. During this change, the energy interaction between China and the world has not been a linear exchange of resources but has been accompanied by globalization and changes in the forms of energy utilization. Energy is embedded in the industrial supply chain of global energy production, consumption, processing, trade, and investment at multiple levels and from multiple angles (IEA, 2016; Zhao, 2017).
First, the traditional oil and gas trade is the most typical global energy interaction. The skewed global spatial distribution of oil and gas resources and the subsequent imbalance in production and consumption make energy trade as an important way to connect oil and gas production centers with consumption centers. To meet the ever-increasing demand for oil and gas consumption and ensure strategic security, consumer countries have adopted various political, economic, and military means to maintain the diversification and stability of their oil and gas imports, whereas producer countries have diversified their oil and gas exports to ensure stable oil and gas revenues (Yang et al., 2013; He et al., 2019). Therefore, different countries and regions have formed a complex competition and cooperation relationship around energy trade. This relationship has become the basic logic of energy geopolitics that has influenced the world for more than a century and objectively constructed the dynamic trade map associated with global energy (Kissinger, 1994; Bromley, 1991). Historically, there have been three major shifts in the focus of global oil and gas production. Before the Second World War, the Gulf of Mexico was the center of oil and gas production. From Second World War to the 1990s, the Gulf region dominated, whereas currently multi-center pattern is observed, which is dominated by the Middle East, Russia, Central Asia-Caspian Sea, and the United States. Hence, the world oil and gas supply pattern has become more decentralized and flatter (Yang and Liu, 2013). At the same time, the pattern of oil and gas consumption shows a trend of multipolarity and dispersion with Asia showing the fastest growth in oil and gas consumption (Zhang and Guan, 2007). China has gradually become the largest energy consumer in the world, with the most outstanding contribution to consumption increment, accounting for approximately 30% of the total increment of the world (IEA, 2015). Obtaining oil and gas resources needed for industrialization and urbanization on a global scale is the most direct driving force for the interaction between China and global oil and gas resources. The global oil and gas trade relations and the changes in these relations caused by the sharp increase in oil and gas consumption are the basic features of the world energy map of China (Figure 1). Furthermore, antagonistic energy geopolitics can widely influence energy interactions. The geo-environment and international relations of major oil- and gas-producing regions, and the safety of major maritime energy transportation channels, such as the Strait of Malacca and the Strait of Hormuz, are the core concerns of energy geopolitical research.
Figure 1 Logic of energy interaction between China and the world
Second, renewable energy has changed the basic logic of the global energy interaction. Under the background of global climate change and low-carbon economic development, the popularity of renewable energy as a technically and economically feasible energy source is growing at an unprecedented speed, which promotes the transformation of global energy (Bazilian et al., 2019; Blondeel et al., 2021). Similar to fossil fuels, renewable energy may shape a new geopolitical pattern of energy. Renewable energy is widely distributed and exhibits remarkable regionality. Every country has one or more types of renewable energy sources. Renewable energy will rebuild the geographical connection and dependence between countries and regions, change the relationship between oil and gas exporters and importers, and reduce geopolitical uncertainty. Unlike the traditional oil and gas trade, energy (such as solar energy, hydropower, and wind energy) is not directly traded in renewable energy trade—instead, the manufacturing products, such as photovoltaic devices, turbines, and wind turbines, needed for harnessing renewable energy sources are traded. In other words, the interactive link of energy trade has changed from oil and gas resources to industrial products. However, the production capacities of these industrial products are different for different regions. Therefore, the global renewable energy interaction is no longer the connection between oil and gas production and consumption. In contrast, the trade connection of industrial products, which is based on manufacturing, forms the connection between the two. As a large manufacturing country, China has incomparable advantages over other countries in the manufacturing of renewable energy products. In the process of energy transformation, China has changed from a major importer of oil and gas trade to a major exporter of global renewable energy products, thereby changing the network relationship of global energy trade to a certain extent (Fu et al., 2017).
Third, the subjects and interactive fields of international energy investments are diversified. There is a close interaction between energy and international capital. The exploration, development, production, and trade of traditional oil and gas resources as well as the research and development of key technologies of renewable energy require large capital for the construction and installation of large-scale infrastructure (such as power grids). Furthermore, energy also plays an increasingly important role in the allocation of global energy assets. Multinational oil companies are important actors in global energy investment, and cross-border investment mergers and acquisitions have formed a global energy investment network (Guo et al., 2021). At different stages of development, the logic of the international energy investment of China has also changed. As part of the “going global” strategy of the 1990s, China increased the use of overseas oil and gas resources. With the support of China’s policy banks, national oil companies represented by PetroChina and CNOOC have invested overseas. It has become an effective way to maintain national energy security by gaining the share of oil through overseas investment and enhancing the international market share. China has primarily invested in energy across countries in Africa, Southeast Asia, Central Asia, and Latin America. These investments focus on resource exploitation, which faces greater economic and social risks (Jiang, 2009; Zhu et al., 2015; Odoom, 2017; Gallagher et al., 2018). The overseas investment of Chinese energy enterprises has increased gradually owing to the wide recognition of the Belt and Road Initiative, stability of finances, and presence of sufficient liquidity (Duan et al., 2018). The host countries for investment are no longer limited to those rich in oil and gas resources but include developed countries in Europe. Furthermore, the investment is not limited to resource acquisition but also includes the construction of renewable energy infrastructure. Hence, the energy network constructed by global energy investment is particularly important for understanding the energy interaction between China and the world.
Finally, embodied energy flow has become an important aspect of global energy interaction. It is reported that 23% of countries in the world do not have direct links in energy trade (Shepard and Pratson, 2020). This can be attributed to the fact that the traditional oil and gas energy trade network ignores the indirect energy consumption of producing traded goods and services. Therefore, traditional trade in energy commodities is not sufficient to depict the panorama of energy interactions among economies. With the intensification of globalization and the emergence of renewable energy as a substitute for fuel and power, the proportion of traditional oil and gas resources embedded in the global production network in the form of raw materials and production power will increase (Chen et al., 2017; Yuan, 2019; Liu et al., 2020). Hence, the embodied energy flow must be considered. Embodied energy flow is the redistribution process of energy, which reduces the distance between global energy production and consumption places, strengthens the links between economies, and promotes the energy interaction between different parts of the world (Overland, 2016). The basis of the interactive relationship between a country and global energy network is not determined by the energy endowment degree of one country but its scale of manufacturing and trade. Most of previous studies focus on that China imports large amounts of energy from energy producing countries, but neglect its role as a major manufacturing and trading country. This means that most of the energy it imports from abroad is consumed to produce goods that are exported worldwide. Hence, this part of energy is actually not utilized locally but embedded in the global production network and re-exported to other countries and regions. And the role of China as an “energy hub” needs to be ascertained. The influence of implicit energy flow in global input and output should be analyzed to clarify a more realistic energy interaction process between China and the world.

3 Empirical methods and data sources

3.1 Selection of empirical objects

The global interactions of different energy sources (traditional energy sources such as coal, oil, and natural gas, and renewable energy sources such as solar, wind, and water) present different characteristics. It is difficult to describe the process and changes in global trade, global investment, and embodied energy embedding of a country in one article. Therefore, the empirical cases included in this study focused on the most important logic of energy interaction between China and the world and the major changes that were observed in this logic. In China, the primary traditional energy source for consumption is coal. However, the most significant energy interaction between China and the world is oil and gas resources, and the external dependence and overseas supply security of oil and gas have always influenced the energy security of the country. This is highly consistent with the geopolitical attributes of energy represented by the endowment, production, processing, transportation, and consumption of oil and gas resources. Therefore, according to the conversion coefficient provided by British Petroleum (BP), the oil and natural gas resources are uniformly converted into standard oil equivalent for combined calculation, to unravel the macroscopic picture of the relationship between external interactions and the changes observed in the traditional energy sources of China.
In the field of renewable energy, the interactive relationship is based on the diverse products, solar cells, lithium batteries, fans, turbines, and their parts, that are required for renewable energy installation and utilization. This section empirically investigates the fundamental transformation of trade of renewable energy products and oil and gas resources of China. Existing research on the trade of renewable energy suggests that photovoltaic devices are the most competitive trade of renewable energy products in China, which can fully represent the basic characteristics of renewable energy trade based on manufacturing.
The multi-region input-output analysis method was used to trace the source of energy consumption among different countries and to analyze the embodied energy flow in the world. For international energy investment, the cross-border M&A (Mergers and Acquisitions) of enterprises involved in energy-related businesses were selected as the objects, and the changes in the scope and field of interactions of these enterprises were analyzed. In empirical research, it is impossible to analyze all energy products comprehensively and systematically. In particular, renewable energy products involve hundreds of product categories, and hence, the pursuit of statistical integrity is not the core issue of geography in energy research. At the same time, any statistical database does not include a full sample and does not have a completely unified caliber. Even in the United Nations Commodity Trade Statistics Database, differences in statistical caliber have been reported among countries. Regarding the data on investment, it is rare for the business scope of different companies to be consistent, even for the companies that are involved in the same type of energy business. Therefore, in order to give readers an intuitive understanding and a global understanding, the present study aims to focus on the transformation of the main types of energy interactions between China and other countries rather than provide a detailed description of energy interactions.

3.2 Energy network construction

A complex network is an important method for analyzing global energy interaction. The status of China in the global energy interaction and the change in its importance can be visually analyzed by using technical methods and visualization means of the network. In this study, the country is represented as a node, and the energy interaction is taken as an edge to construct the energy network. There are two common methods to weigh the opposite sides: value quantity and transaction frequency. Towing to a large amount of data and relatively complete data records of international energy trade, a directed weighted trade network is used for the construction of oil and gas and renewable energy trade networks with the weights of a physical quantity and value quantity as sides, respectively (Gao et al., 2015). Furthermore, the incompleteness of transaction value in the data can easily lead to bias; therefore, the energy investment relationship between countries was reflected by transaction frequency, and a directed weighted network was constructed (Ji et al., 2020).
Specifically, $V=\{{{v}_{1}},{{v}_{2}},{{v}_{3}}\ldots {{v}_{z}}\}$ represents the collection of countries, and n is the number of countries. Ri,j indicates the energy connection (trade or investment) between country v1 and country v2. $R=\{{{R}_{1}},{{R}_{2}},{{R}_{3}},\ldots {{R}_{S}}\}$ means the collection of energy interactions among all countries; if there is an energy connection between v1 and v2, then Ri,j ≠ Ø and Ri,j ∈ R; if energy connection has not been established between v1 and v2, then Ri,j ≠ Ø. Further, the existing energy connection is expressed in matrix form as follows:
${{E}_{N\times N}}=\left[ \begin{matrix} {{e}_{1,1}} & \cdots & {{e}_{1,N}} \\ \vdots & \ddots & \vdots \\ {{e}_{N,1}} & \cdots & {{e}_{N,N}} \\ \end{matrix} \right]{{e}_{i,j}}=\left\{ \begin{matrix} 1, & {{R}_{i,j}}\ne \varnothing \ \text{and}\ {{R}_{i,j}}\in R \\ 0, & {{R}_{i,j}}=\varnothing \\ \end{matrix} \right.\ 1\le i,j\le N$
In the formula, ei,j =1 represents that there is an energy connection between the countries and ei,j = 0 represents that an energy connection is absent.

3.3 National energy trade centrality

Weighted centrality is used to characterize the position and importance of global energy links in different countries. In a directed network, the centrality of the weighted degree is divided into weighted-out degree and weighted-in degree, which represent the scale of connection sent from the node and flowing into the point, respectively. The specific calculation is shown in formulas (2) and (3):
${{C}_{O,i}}=\frac{\mathop{\sum }_{j=1,j\ne i}^{N}{{w}_{ij}}}{(N-1)}$
${{C}_{I,i}}=\frac{\mathop{\sum }_{j=1,j\ne i}^{N}{{w}_{ji}}}{(N-1)}$
where CO,i represents weighted-out degree of node i, wij represents link strength from node i to node j. CI,i represents weighted-in degree of node i.

3.4 Multi-region input-output analysis of embodied energy

Multi-region input-output analysis (MRIO) can trace the source of resource consumption via inter-industry linkages, cross-supply chains, and cross-border trade, and is suitable for analyzing the implicit resource flows of production, consumption, imports, and exports (Gao et al., 2015). Adopting MRIO, this study measures the implicit energy flows among 188 economies (excluding those of the former Soviet Union) from 1995 to 2015. Based on the law of conservation of matter, the embodied energy association of sector i of region r on a global scale can be expressed as
$q_{i}^{r}+\sum\limits_{s=1}^{m}{\sum\limits_{j=1}^{n}{\varepsilon _{j}^{s}z_{ji}^{sr}=}}\varepsilon _{i}^{r}x_{i}^{r}$
where $q_{i}^{r}$ represents the direct energy consumption of sector i in region r, $\varepsilon _{j}^{s}$ represents the implicit energy intensity of sector j in region s on a global scale. $z_{ji}^{sr}$ represents the intermediate input from sector j in region s to sector i in region r. $x_{i}^{r}$ represents the gross output value area of sector i in region r. $x_{i}^{r}$ is defined as follows:
$x_{i}^{r}=\sum\limits_{s=1}^{m}{\sum\limits_{j=1}^{n}{z_{ij}^{rs}}}\text{+}\sum\limits_{s=1}^{m}{f_{i}^{rs}}$
Among them, $f_{i}^{rs}\theta $represents sector i in region r and meets the final demand output of sector j in region s
Matrix Q represents the direct energy consumption, matrix E represents the energy intensity per unit output, matrix Z represents the input of intermediate products, and matrix X represents the total output. Then, formulas (6) and (7) can be expressed as
$Q+EZ=E\hat{X}$
$\hat{X}=Z+\hat{F}$
Given the direct energy consumption matrix Q, intermediate product input matrix Z, and total output matrix X, the energy intensity per unit output can be obtained as follows:
$E=Q{{\text{(}\hat{X}-Z\text{)}}^{-\text{1}}}$
Based on the energy intensity matrix E of unit output, the implicit energy flow with imports as the final product (EIM) and export as final product investment (EEX) can be expressed as
$EI{{M}^{r}}=\sum\limits_{i=1}^{n}{EIM_{i}^{r}}=\sum\limits_{i=1}^{n}{\sum\limits_{s=1(s{}^\text{1}r)}^{m}{\text{(}e_{i}^{s}f_{i}^{sr}\text{)}}}$
$EE{{X}^{r}}=\sum\limits_{i=1}^{n}{EEX_{i}^{r}}=\sum\limits_{i=1}^{n}{\sum\limits_{s=1(s{}^\text{1}r)}^{m}{\text{(}e_{i}^{r}f_{i}^{rs}\text{)}}}$

3.5 Data sources

The data on global energy trade were obtained from the United Nations Commodity Trade Statistics Database (UN Comtrade), and the types of energy involved included crude oil (2709), natural gas (including liquefied natural gas (LNG) 271111 and pipeline natural gas 271112), and photovoltaic devices (854140). Total quantity was calculated for oil and gas resource trade and was then uniformly converted into standard oil equivalent based on the discount parameters provided by BP for consolidation analysis. Photovoltaic trade was measured by value, and small transactions with a single transaction amount of <10,000 USD were screened out in the analysis. Considering the availability of data and the changes in the energy map of China due to rapid development in recent years, three-time nodes (1995, 2005, and 2015) were selected for cross-sectional comparative analysis. International energy investment M&A data were obtained from the BvD-Zephyr global M&A transaction analysis database and the records of cross-border M&A from 1996 to 2015 were selected for different energy-related enterprises. Based on the industry code of US SIC, the oil and gas exploitation industry (13), petroleum processing and related industries (29), oil and gas transportation, petroleum product distribution, and other industries (3533, 46, 4932, 517, 554, 598, 6792) were screened out for analysis. The description of the business of the acquirer and the acquired party was studied, and if the transaction records suggested that the core business between the enterprise was not related to energy, the data was eliminated. The study identified the transaction status as “completed” or “assumed completed”. The data of the multi-regional input-output table used in implicit energy accounting was obtained from the Eora global supply chain database of the University of Sydney, Australia. The database is one of the most detailed global scale multi-regional input-output tables. It covers 26 sectors of 189 economies in the world (including those of the Soviet Union), which has the widest coverage and has been widely used in academic circles (Han et al., 2018).

4 Result and discussion

4.1 Global transformation of traditional energy trade and renewable energy trade

Since the end of the Cold War, the economic development of newly industrialized countries has facilitated the prosperity of global oil and gas trade. The number of countries and regions participating in global oil and gas trade increased from 110 in 1995 to 127 in 2015. Meanwhile, the complexity of trade networks has also increased. The trade relations between developed countries in Europe and the United States, newly industrialized countries such as China and India, and major oil- and gas-producing regions such as the Middle East, Russia, and Africa constitute the basic pattern of global energy trade (Figure 2). However, the multiploidization of energy production and consumption leads to the trend of collectivization of energy trade, including the United States-Central and South America-Middle East-Africa, Russia-European Union-Central Asia Caspian Sea region, East Asia-Southeast Asia-Middle East-Africa, and other groups (Yang et al., 2015). With the rise of Asian markets since 2000, oil and gas supply regions such as the Middle East, North Africa, and North America have gradually established closer trade cooperation relations with major oil and gas consumers such as China, Japan, and South Korea in Asia. From the 1960s to the early 1990s, the oil and gas production and consumption of China were basically consistent, and its dependence on the international oil market was not high. From 1983 to 1987, China exported oil and gas to the world. Since the middle and late 1990s, with the rapid development of industrialization and urbanization, oil and gas demand has shown a sudden growth, and imports of oil and gas have increased from 17 Mtoe in 1995 to 389 Mtoe in 2015. The source countries of oil and gas imports increased from 32 in 1995 to 49 in 2015.Furthermore, the main oil- and gas-producing regions have expanded from Southeast Asia, Oceania, and the Middle East to Russia, Africa, South America, and Central Asia. The weighted-in degree of oil and gas trade of China in 1995 was only 0.17, which was far lower than that of the United States (36.97) and Japan (27.61) (Table 1). China ranked 19th in the world in crude oil and gas trade in 1995 and was at the edge of the world oil and gas trade network, and had not formed a worldwide energy supply map. In 2005, the weighted oil and gas penetration of China increased rapidly to 12.67, and it ranked 5th in the world after the United States, Japan, France, and South Korea. It became an important buyer in the global oil and gas market, and its network centrality was prominently enhanced. Together with Japan and South Korea, China became the core of energy trade in Asia. In 2015, the weighted-in degree of oil and gas trade of China further increased to 38.95, surpassing the United States and ranking first in the world. China has established extensive trade relations with the major oil- and gas-exporting countries and has become the core of the global oil and gas trade network. Consequently, China had shaped a relatively stable global trade map for oil and gas energy. Specifically, Saudi Arabia is the largest oil and gas importer for China, with oil and gas imports exceeding 50.54 Mtoe in 2015. It was followed by Russia and Angola, which exported 42.67 Mtoe and 38.71 Mtoe to China, respectively. And imports from Iraq, Oman, and Iran all exceeded 25 Mtoe (Table 2). In addition, Turkmenistan, Venezuela, Kuwait, Brazil, the United Arab Emirates (UAE), Australia, Colombia, and Sudan are all important oil and gas importers. Together, these countries constitute an important node for the interaction of oil and gas resources between China and the world.
Figure 2 Oil and gas interaction between China and the world
Table 1 Weighted-in degree of the top ten countries in crude oil and gas trade in 1995, 2005, and 2015
1995 2005 2015
No. Country Weighted-in degree Country Weighted-in degree Country Weighted-in degree
1 USA 36.97 USA 70.75 China 38.95
2 Japan 27.61 Japan 28.11 USA 37.98
3 France 10.52 France 14.40 India 22.28
4 Germany 10.05 South Korea 14.12 South Korea 17.53
5 South Korea 9.22 China 12.67 Japan 16.85
6 Italy 7.23 Germany 11.46 Italy 11.28
7 Netherland 6.36 Belgium 9.76 Spain 9.12
8 Spain 5.79 Italy 8.90 Germany 9.05
9 Singapore 5.12 Spain 8.68 France 8.45
10 United Kingdom 4.16 Canada 8.13 Netherland 7.92
19 China 0.17
Table 2 Top ten countries exporting oil and gas to China in 1995, 2005, and 2015 (Mtoe)
1995 2005 2015
No. Country Import Ratio (%) Country Import Ratio (%) Country Import Ratio (%)
1 Indonesia 5.28 30.86 Saudi Arabia 22.18 17.49 Saudi Arabia 50.54 12.97
2 Oman 3.65 21.36 Angola 17.46 13.77 Russia 42.67 10.95
3 Yemen 2.47 14.46 Iran 14.27 11.25 Angola 38.71 9.93
4 Angola 1.00 5.84 Russia 12.78 10.08 Oman 32.15 8.25
5 Iran 0.93 5.44 Oman 10.83 8.54 Iraq 32.11 8.24
6 Vietnam 0.76 4.45 Yemen 6.84 5.39 Iran 26.62 6.83
7 Malaysia 0.59 3.44 Sudan 6.62 5.22 Turkmenistan 24.89 6.39
8 Nigeria 0.39 2.28 Congo 5.53 4.36 Venezuela 16.01 4.11
9 UAE 0.37 2.15 Indonesia 4.09 3.22 Kuwait 14.43 3.70
10 Saudi Arabia 0.35 2.03 Ecuador 3.71 2.92 Brazil 13.92 3.57
The diversification of oil and gas imports is the most important feature of oil and gas interaction and evolution between China and the world. Furthermore, China has been committed to a diversification strategy—the number of oil- and gas-importing countries is increase-ing, and the degree of diversification is expanding. However, the global geographical distribution pattern of oil and gas resources has led to a high concentration of oil and gas import sources in China. Most oil- and gas-importing sources include countries with high geopolitical risks, and those that have unstable supply prospects of oil and natural gas. Once a major geopolitical event occurs, it directly threatens the security of the overseas energy supply. In particular, Iran, Iraq, and other countries are geopolitically extremely unstable and have been influenced or controlled by the United States or other countries. Central Asia, Sudan, Venezuela, and Angola are in turmoil, facing the risk of regime transition, which may lead to economic collapse, resulting in an unstable energy supply to China. Australia has unstable policies towards China; hence, the trade friction between the two sides in natural gas export will affect the stable supply of natural gas for China. Furthermore, the oil and gas trade map of China is highly concentrated, which indicates that more than 80% of oil and gas resources are transported by sea. The safety of strategic channels, such as the Strait of Hormuz, the North Indian Ocean route, the Strait of Malacca, and the South China Sea, play an important role in China’s energy security. However, these channels have the most intense geopolitical game in the world. The vulnerability of the channel is a potential safety hazard that cannot be ignored in the oil and gas interaction between China and the world.
The renewable energy interaction between China and the world shows completely different characteristics due to a more diversified trade relationship of renewable energy (Figure 3). The number of countries joining the global photovoltaic (PV) trade network increased by approximately 50% from 115 in 1995 to 168 in 2015, and the number of trade relations increased by two times from 1,003 in 1995 to 2,870 in 2015. However, the average weighted degree of the PV device trade network is far lower than that of oil and gas trade. This can be attributed to a large number of trade relations, small trade quotas, and scattered transactions. Compared with oil and gas trade based on geographical distribution, the imbalance of photovoltaic device trade based on the manufacturing industry has been strengthened. In 1995, Japan, the United States, Malaysia, Germany, and the Philippines were the main exporters of PV components in the world, accounting for 30.07%, 12.85%, 11.85%, 7.88%, and 6.02% of the global PV device exports, respectively. The top five exporting countries accounted for 68.69% of the trade in 1995. In 2005, with the shift of the world manufacturing industry, the proportion of China and Japan in the PV trade increased considerably, accounting for 27.06% and 23.06% of global exports, respectively. The proportion of that in the United States and Germany has decreased and the PV trade center has shifted to Asia. In 2015, Asian countries constituted the top countries in global PV trade, accounting for more than 80% of the global PV trade exports. Among them, China, Malaysia, Japan, and South Korea ranked the top four, accounting for 41.98%, 13.45%, 11.10%, and 7.48% of global exports, respectively.
Figure 3 Photovoltaic trade interactions between China and the world from 1995 to 2015
The PV industry of China was in its initial stage in 1995 and was on the edge of the global trade group dominated by countries and regions such as the United States, Western Europe, Japan, South Korea, and Italy (Tables 3 and 4). It had an export volume of 103 million USD, accounting for only 3.82% of the global export volume, which was mainly exported to Hong Kong, South Korea and Germany, and was on the edge of the global trade group dominated by countries and regions such as the United States, Western Europe, Japan and South Korea. In 2005, the PV export volume of China reached 59.9 million USD. The materials were exported to 65 countries, including Germany, Spain, the United States, South Korea, Japan and Italy, accounting for half of the total exports of the East Asia Photovoltaic Trading Group. In 2015, the total trade volume of PV devices in China reached 19.786 billion USD, which was exported to 141 countries and regions in the world, accounting for 41.98% of the global export volume. Among the top ten groups of photovoltaic device trade relations in the world, China occupies eight groups. China ranks first in the world in terms of weighted output related to PV devices, forming a renewable energy trade map covering all major countries and regions in the world. At the same time, renewable energy products are very diverse, ranging from turbines with a power of more than 10,000 kW to polysilicon chips and light-emitting diodes, and the trade of various renewable energy-related products, which further results in greater dispersion and diversification compared to traditional energy sources.
Table 3 Weighted-out degree of the top ten countries/regions in photovoltaic trade in 1995, 2005, and 2015
1995 2005 2015
No. Country Weighted-out degree Country Weighted-out degree Country Weighted-out degree
1 Japan 8.12 China 59.96 China 197.87
2 America 3.47 Japan 53.06 Malaysia 63.37
3 Malaysia 3.20 Germany 26.12 Japan 52.33
4 Germany 2.13 America 13.54 South Korea 35.23
5 Philippines 1.62 Malaysia 13.08 Germany 25.18
6 China 1.03 Philippines 6.40 America 15.10
7 South Korea 0.99 United Kingdom 5.82 Philippines 12.12
8 China Hong Kong 0.98 South Korea 4.60 Singapore 12.09
9 United Kingdom 0.84 Thailand 4.26 Mexico 11.14
10 Canada 0.73 Netherlands 3.51 Thailand 7.78
Table 4 Top ten countries/regions exporting photovoltaic devices to China in 1995, 2005, and 2015 (million USD)
1995 2005 2015
No. Country/Region Export Country/Region Export Country/Region Export
1 China Hong Kong 56.70 Germany 1666.43 Japan 3937.11
2 South Korea 11.60 Spain 1279.86 America 2429.37
3 Germany 8.47 China Hong Kong 660.07 China Hong Kong 1944.98
4 America 8.21 America 395.98 India 1607.93
5 Japan 7.52 South Korea 346.22 South Korea 1261.74
6 Italy 2.60 Japan 325.18 United Kingdom 789.91
7 Singapore 2.12 Italy 221.75 Germany 505.99
8 France 1.40 Belgium 182.75 Pakistan 434.86
9 Canada 1.09 Singapore 59.35 Australia 408.73
10 Spain 0.59 France 48.17 Mexico 406.71
Overall, renewable energy trade shows a completely different energy interaction relationship than oil and gas trade. Manufacturing-based renewable energy trade is an advantageous field of energy interaction between China and the world, and the world energy map is no longer limited to highly concentrated and limited oil- and gas-producing countries. It has extended to countries with renewable energy installations and renewable energy utilization in the world. The diversity of renewable energy types and the universality of resource distribution determine that most countries have a resource base for developing renewable energy. Countries have great power to develop renewable energy systems, especially under global energy transformation and green economy. The strong manufacturing system and production capacity of China has provided relatively inexpensive renewable energy products, which have become the primary choice for most countries worldwide. Moreover, compared with oil and gas resources, the renewable energy product is often used in general merchandise trade for its relatively low geopolitical attributes. Its international game mainly aims at the anti-dumping, trade barriers and other trade measures for some specific renewable energy products, rather than fierce confrontation or even launching regional wars. Therefore, the world map of renewable energy of China is more decentralized, global, and safer compared with that of oil and gas resources.
In fact, China is not only in a leading position in the global renewable energy manufacturing industry, but according to the report “New World-Global Energy Transformation and Geopolitics” released by IRENA in 2019, China has become the largest country for Research and Development of renewable energy technology. By the end of 2016, China accounted for 29% of global renewable energy patents. It is far higher than the shares of the United States, Japan, and the European Union, which are 18%, 14%, and 14%, respectively (IREA, 2019). China leads the world in new energy patents such as solar panels, wind turbines, batteries, and electric vehicles, and has a global competitive advantage. In future, the service trade of renewable energy technology may also become an important aspect of energy interactions between China and the world. China will further accelerate the adjustment of energy structure and promote the large-scale development of renewable energy under China’s 2030 peak carbon dioxide emissions and 2060 carbon neutral and “double carbon” targets. There is no doubt that China is reshaping the world renewable energy map, with the trade of renewable energy products based on manufacturing or future renewable energy technology.

4.2 Regional and structural transformation of global energy investment

Energy is a capital-intensive industry. In the fossil fuel era, oil and gas resource countries, such as the Middle East and Africa, lacked the necessary large-scale capital for exploration, exploitation, and processing of oil and gas resources. Major international oil companies such as BP, Royal Shell, and ExxonMobil have taken the leading position in the global oil and gas industry through a large number of international investments. Multinational oil companies not only control a large amount of resources, but also establish a complex global energy investment M&A network through asset restructuring modes such as mutual acquisition and mergers. Transnational investment M&A with oil and gas as the main target is expanding globally (Figure 4). Since the 1990s, the world has witnessed a large-scale wave of oil and gas resource investment and mergers and acquisitions. During 1996-2005, 2,110 cross-border oil and gas investment mergers and acquisitions were undertaken, and the acquirers were concentrated in a few developed countries in Western Europe and North America. The oil and gas assets were primarily acquired by the United States from Canada, the United Kingdom, Norway, and Australia. During 2006-2015, the global oil and gas resources M&A market became increasingly active. The number of transnational oil and gas M&As soared to 6,037 in scale, and the global oil and gas M&A also present geographical decentralization and diversified M&A types. It is worth noting that the upstream oil and gas assets are the most concentrated areas of M&A, and the targets of M&A include not only the oil and gas assets located in the country where the main body of M&A is located, but also their oil and gas assets in the Middle East, Central Asia, and Africa. Through cross-border mergers and acquisitions, global oil and gas resources are increasingly concentrated in the hands of a few countries and oil companies with global capital operations and risk response capabilities. Among them, international oil companies are more focused on the exploration, development, and control of key technologies, and tend to the global layout mode in the fields of traditional energy and renewable energy. The overseas distribution of national oil companies is more regional, which is more inclined to realize resource expansion in areas rich in oil and gas resources (Yang and Dong, 2016).
Figure 4 World transnational oil and gas M&A network in 1996-2005 and 2006-2015

(Note: the legend refers to Figures 2 and 3)

Since the 1990s, Chinese energy enterprises have gradually broken through the relatively single means of energy trade, such as buying oil and gas in the international energy market and started to actively deploy the energy industry globally through mergers and acquisitions, such as equity investment, acquisition, capital increase, and joint ventures. From 1996 to 2005, China recorded 30 international oil and gas mergers and acquisitions. The main M&A destinations are concentrated in Central Asia, Western Europe, Southeast Asia, and North America, mainly buying and participating in energy blocks, and the overseas oil and gas resources have a single layout, so both the M&A scale and the M&A targets are at the edge of global energy M&A. After 2005, with the support of the Chinese government’s “going out” strategy, state-owned energy enterprises represented by PetroChina, Sinopec and CNOOC have become the main force of China’s overseas oil and gas mergers and acquisitions, and the effective M&A records increased to 194 from 2006 to 2015. Geographically, overseas oil and gas M&A targets are gradually diversifying. Cross-border M&A of oil and gas resources is shifting from a limited number of host countries to developing countries in space. The overseas M&A business covers the entire industrial chain of the five major oil and gas cooperation zones in Central Asia, Africa, South America, the Middle East, and Asia-Pacific, and gradually realizes global asset restructuring and investment and financing optimization of the oil and gas industry. It broke the long-term monopoly of the oil and gas industry in high-quality oil-producing areas by western oil and gas companies.
International oil and gas investments have been endowed with the color of the game to a great extent. With the continuous expansion of the scale and scope of the overseas energy mergers and acquisitions of China, the risks of these investments should not be underestimated. Nearly 60% of China’s overseas M&A regions are countries with high geopolitical risks, whose energy investment forms are more focused on resource exploitation. Overseas mergers and acquisitions are often restricted or even resisted to varying degrees due to “China Threat Theory” and resource nationalism, which further increase the risks and uncertainties associated with such investments. Furthermore, the interference of political forces in sensitive industries has become an important factor in the success or failure of M&A mergers and acquisitions (Zhang, 2016; Zhang et al., 2016). To reduce the sensitivity of global energy investment and improve the safety of the energy industry, particularly in terms of geographical space selection, China has been expanding the scale of investment in the European energy field, involving fossil energy, renewable energy, and energy infrastructure (Conrad and Kostka, 2017; Pareja-Alcaraz, 2017; Turcsanvi, 2017). China has continuously improved the locality of energy investment in countries along the Belt and Road region (Liu et al., 2020), gradually expanding its energy investment structure from traditional energy sources such as oil and gas to diversified investment in power projects, increasing investment in renewable energy infrastructure such as solar energy, wind energy, and water energy. This provides better services to the host countries, thereby reducing the geopolitical attributes of overseas energy investment. It is reported that 47.82% of the foreign energy development investment projects of China Development Bank and Export-Import Bank of China invested in renewable energy in 2015, among which the most important investments were made for the development and transmission of hydropower development and construction of distribution infrastructure. Moreover, the host countries for such investments have shifted from oil- and gas-rich regions to more developing countries in Southeast Asia and Africa, such as Laos, Cambodia, Vietnam, Ethiopia, Brazil, and Indonesia. Global energy investments aimed at obtaining oil and gas resources have gradually turned to local embedded energy investments. Under the background of global climate change, renewable energy has become an important measure to reduce carbon emissions, and its proportion in the future energy structure will be further increased. China has strong energy-related infrastructure construction capacity and international investment capacity, and the scope and intensity of China’s investment in the international renewable energy field will be further improved in the future.

4.3 Embodied energy trade and the changing role of energy hub

In the era of globalization, attention should be paid to the redistribution of energy in industrial products on a global scale. China is a key node in the global embodied energy trade network, and a large part of its energy consumption does not directly serve its own country but is transferred through various transnational trade activities to meet the final needs of other countries. China provides goods and services that consume a large amount of energy for countries worldwide. In this sense, the interaction between China and global energy not only includes traditional energy imports and exports, energy trade, and investment but also covers all countries and regions that have trade relations with China. In the form of energy interaction, the former is visible, while the latter is embedded and recessive. The embodied energy trade of China mainly manifests in embodied energy net exports. In 1995, the embodied energy net export of China was 41.70 Mtoe, whereas its oil and gas imports were 17.10 Mtoe—this implies that the embodied energy net export was 2.44 times of the oil and gas imports, which reflected China’s remarkable role as an “energy hub”. In 2015, the net export of embodied energy exceeded 100 Mtoe, about 1/4 of the total oil and gas imports of China in 2015. Unlike the traditional oil and gas resources, the main countries that China interacts with by embodied energy network are no longer a few oil and gas resource countries and producers, but developed countries and regions such as Europe, the United States, and Japan (Figure 5).
Figure 5 The evolution of China’s embodied energy trade pattern from the perspective of globalization
As shown in Table 5, in 1995, the country with the most embodied energy exports in China was the United States, which had an export volume of 11.90 Mtoe, accounting for 28.54% of the total export volume. It was followed by Japan, which had an export of 11 Mtoe, accounting for 26.38% of the total export. Other countries with China’s embodied energy export volumes exceeding 1 Mtoe included Germany (2.55 Mtoe, 6.12%), and France (1.12 Mtoe, 2.69%). In 2005, the embodied energy export pattern of China became more decentralized, and formed an embodied energy export map with developed countries in Europe and America, Japan, and South Korea. These countries were followed by Southeast Asian countries. Furthermore, China’s embodied energy export to Europe, and America has further strengthened. The embodied energy trade of China with the United States reached 35.30 Mtoe, accounting for 40.52% of the total exports of China. Germany, the United Kingdom, France, Australia, Canada, Spain, Italy, and the Netherlands export more than 1 Mtoe, and these developed countries in Europe and America account for 65.34% of the total embodied energy trade in China. Japan is still the second largest importer of China’s embodied energy, with an import of 17.20 Mtoe, accounting for 19.74% of China’s export. The export volume to South Korea has also increased considerably, reaching 2.88 Mtoe, accounting for 3.31% of the total export. At the same time, the export proportion of Thailand, India, Singapore, Indonesia, Malaysia and other Asian countries has increased considerably. In 2015, China and the global economy became increasingly connected, especially after the Belt and Road Initiative was put forward. Furthermore, the trade ties of China with South-east Asia and African countries continue to deepen, leading to a flatter structure of the embodied energy exports of China. The total amount of hidden energy exported to the United States and Japan is 30.90 Mtoe and 15.30 Mtoe, accounting for 28.72% and 14.22% of the total export, respectively. These values were lower than those calculated for 2005. Compared with that in 1995, the number of countries with more than 1 Mtoe increased from 7 to 19, and the number of countries with more than 0.5 Mtoe increased from 12 to 32. Some African countries, such as Egypt, Algeria, and South Africa, have also increased their embodied energy interactions with China.
Table 5 Top ten countries of China’s embodied energy export in 1995, 2005 and 2015 (Mtoe)
No. 1995 2005 2015
Country Export Country Export Country Export
1 America 11.90 America 35.30 America 30.90
2 Japan 11.00 Japan 17.20 Japan 15.30
3 Germany 2.55 Germany 5.18 Germany 5.47
4 United Kingdom 1.52 United Kingdom 4.37 United Kingdom 4.85
5 Australia 1.50 South Korea 2.88 South Korea 4.78
6 South Korea 1.16 France 2.70 Australia 3.38
7 France 1.12 Australia 2.42 Canada 3.09
8 Canada 0.80 Canada 2.39 France 2.66
9 Thailand 0.64 Spain 1.75 India 1.99
10 Italy 0.62 Italy 1.69 Italy 1.70
Compared with traditional energy trade, the logic of China’s embodied energy and global interaction is significantly different, and the embodied energy interaction is more deeply embedded in the global trade network. This kind of embeddedness includes both regional embeddedness and network embeddedness. The former mainly refers to the diversification of energy interactive areas, whereas the latter mainly refers to a more robust interactive relationship and structure. In the interaction of traditional oil and gas trade, regional embeddedness is mainly manifested in the energy dependence between China and oil and gas resource-rich regions such as the Middle East, Central Asia, Africa, and Central and South America, while the network embeddedness mainly reflected in the oil and gas resources trade relations with countries such as Saudi Arabia, Russia, Angola, Turkmenistan, Venezuela, Kuwait, Brazil, United Arab Emirates, Australia. In the interaction of embodied energy, regional embeddedness is not limited to countries with rich oil and gas resources, but also the expansion of China’s commodity trade relations with major countries in the world. As China’s most important commodity trading partners, developed countries and regions such as the United States, Japan, and the European Union have become the most important interactive objects of embodied trade. Furthermore, embodied trade is not limited to energy trade but includes global commodity trade with many categories. Therefore, whether embedded in a region or network, the interaction between China’s embodied energy and global energy has become more diversified and decentralized.
The continuous expansion of China’s embodied energy trade does not mean that China is the biggest gainer in the global embodied energy trade network. The increase in embodied energy trade not only reflects the influence of China as the world’s largest manufacturing and trading country but also reflects the constant consumption of domestic energy by China to supply the global economy. On one hand, the territory of China’s embodied energy is global—as long as there is an economic and trade relationship between China and other countries, an output of embodied energy will be generated. However, at present, the overall level of the manufacturing industry of China is at the low end of the value chain, whereas the energy intensity of its export products is relatively high. Consequently, the economic benefits per unit energy cost are generally lower than those in developed countries (Liu et al., 2012). On the other hand, the interactive relationship of embodied energy of China will continue to strengthen in the era of a low-carbon economy. With a clean energy structure, oil and gas resources will be more separated from the power system and invested in the form of raw materials. At the same time, a large number of installed solar energy, wind power, and hydropower in China will be embedded into the global production network as new energy power. Furthermore, the global embodied energy transfer of China needs to re-examine the energy security concept with overseas oil and gas supply security, and seek a balance between playing the role of global “energy hub” and ensuring bottom line of energy security.

5 Conclusion and policy implications

In order to reveal the energy interaction between China and the world and its changes, this study analyzed energy trade, energy investment, and embodied energy transfer using complex network and input-output analysis. The findings of the study indicate that the logic of energy interaction between China and the world has changed considerably over the years—, it has witnessed changes from oil and gas energy trade to renewable energy trade, from oil- and gas-based investment to diversified energy investment, and from explicit energy trade to embodied energy trade. Furthermore, the spatial map of energy interactions between China and other countries have been constantly expanding from oil- and gas-rich countries to countries with global trade links, the degree of its interactions is also deepening from oil and gas commodity trade to renewable energy products, and then expanded to global general merchandise trade. In this process, China has gradually shaped a diversified world energy map through oil and gas energy trade, renewable energy products, manufacturing systems, and international investment. The main conclusions of the study are listed below:
(1) The urbanization and industrialization require oil and gas resources, and the energy production structure of “rich in coal, but poor in oil and gas” of China depending on overseas oil and gas supply. This constituted the most direct logic of energy interaction between China and the world since China became a net importer of oil in the 1990s. Through the strategy of import diversification with the Middle East, Africa, Russia, Central Asia, and other major oil and gas exporting countries and regions in the world, China has established extensive oil and gas trade interaction relations and has become one of the cores of the global oil and gas trade network.
(2) With the development of renewable energy, the logic of energy interaction between China and the world has changed remarkably. The trade of renewable energy products is based on the manufacturing industry and provides scope for an advantageous energy interaction between China and the world as the interaction is no longer limited to a few oil and gas exporting countries and regions. Instead, it has expanded to countries and regions that have the potential to utilize renewable energy, forming a global renewable energy trade map. In addition, the global renewable energy trade map of China will continue expanding in the future owing to the comprehensive effects of the vigorous growth of renewable energy installed demand, renewable energy development policies, and enterprise innovation.
(3) International energy investment is an important aspect of energy interaction between China and the world. The energy industry is capital-intensive. China actively acquires the rights and interests of oil and gas resources, lays out the energy industry, and develops the energy market on a global scale through international energy investment mergers and acquisitions. However, the scope and field of energy investment interaction have changed, and the scope of interaction has shifted from a limited number of host countries to global. The interactive field has shifted from oil and gas resources to renewable energy sources, and energy infrastructure investment serving the host country, which has reduced the geopolitical attributes of China’s overseas oil and gas investment.
(4) With the deepening of economic globalization, the export structure of products dominated by manufacturing determines that part of China’s energy consumption does not directly serve its own country, but is redistributed globally through trade. Hence, energy embedded in commodity trade has become an important way of energy interaction between China and the world. From the perspective of geographical and network embedding, embodied energy has a deeper interaction with the world as the interactive object expands from explicit oil and gas trade to the embodied commodity trade system, and the interactive scope expands from oil- and gas-producing countries to all major countries and regions that have general commodity trade relations with China. China’s energy interaction with global in embodied form is more diversified and decentralized.
The world is in a critical period of transition from the oil and gas resources era to the renewable energy era. On one hand, traditional oil and gas resource security is still the top priority for China for at least some time as it cannot be ignored as a consequence of the rapid development of renewable energy. It is still necessary to enhance the stability of the interactions between China and the oil- and gas-producing countries in future. Strengthening the traditional oil and gas security cooperation with the Middle East, Africa, Russia and Central Asia, actively responding to the geopolitical instability factors in Iran and Iraq, and expanding the energy cooperation under the framework of the Belt and Road Initiative can increase the guarantee capacity of diversified supply. At the same time, China should build diversified strategic channels for energy security to improve the support capacity of key transportation channels, such as the Indian Ocean route and the Strait of Malacca, speed up the construction of onshore oil and gas pipelines, and plan the construction of oil and gas pipelines from China to the Middle East to ensure the security and stability of traditional oil and gas energy maps.
On the other hand, the general trends for the long run will include the greening of the world economy, achieving low or no carbonization of the energy structure. Consequently, the growth in demand for coal and oil will be relatively slow, and the demand for clean energy will increase remarkably. China has advantage compared to other countries as it has developed a strong manufacturing base, renewable energy technology, and invested in renewable energy infrastructure, which will reshape the territory of renewable energy development in the world. This will also greatly reduce the risk of China’s traditional energy security.
In conclusion, the negative impact of the uncertainty of world economic development on the energy interactions between China and the world needs to be investigated. With the escalating trade friction between China and the United States and the outbreak of major public health emergencies in the world in 2020, many countries have proposed reconstructing relatively independent economic systems. The undercurrent of globalization is developing. In the post-epidemic era, will the global industrial chain move towards regionalization again? China, as the world manufacturing center, can enhance the global energy allocation capacity, strengthen the resilience of global traditional energy supply, promote the advantages of renewable energy, and enhance the function and value increment of the “resource center” of the global embodied energy network. Therefore, a more systematic and in-depth research is required.

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