Series of WSJ and FT stories on the International Energy Agency declaring China the world’s energy demand center, an old slide of mine that goes back to the year 2000.
Humble China disputes the charge! The IEA counters that China’s official figures have been so bad in the past that they’ve led lots of energy trackers to issue projections that are routinely ratcheted up or down with great statistical violence over the years. I can attest to this: when I put out the Asian Energy Futures report a decade ago, I was forced, within a year, to amend the report because the new Dept. of Energy figures so altered its projections on China in just one year’s time that it rendered the report stunning obsolete in some of its assumptions.
The latest IEA numbers put China at 2.52T metric tones of oil equivalent, about 4% higher than the US, which was the world’s largest consumer of energy for the vast majority of the 20th century—as in, since it rose to economic prominence in the earliest years of the century.
China is claiming this happened only because the US was in recession and the IEA botched its numbers on China’s actual use, but this is a nonsense reply in terms of clear trends. China is simply on a rocketing course, so arguing about which month it actually overtakes the US is silly. Look at it this way, in 2000, the US consumed twice the energy of China and just a decade later China consumes slightly more than America. Our annual efficiency improvement now stands at 2.5%, while China’s is 1.7%.
And understand that China uses coal to a stunning degree (well over half its energy), while the US share is dropping from its historical range of 40%, thanks to increased use of gas.
Now, at first blush, everyone on both sides will take this as a matter of ego, as in, “check out how powerful China has become!”
But over time the reality will set in: China is now the most vulnerable economy in the world, and it doesn’t have a military that matches that immense dependency.
Then all we have to do is sit back and see how China likes that new burden, because all the world’s antiglobalization forces, both “soft” and deterministically kinetic, will catch on to this new reality soon enough.