Russian Media: How Is the Middle East Crisis Driving the Spread of Chinese Technology?
Chinese clean technology manufacturers are beginning to benefit from reduced supply from the Persian Gulf region. Rising oil and gas prices, along with growing concerns about energy security, have fueled demand for batteries and electric vehicles. Just as the oil crisis of the 1970s spurred the development of Japan’s energy-efficient and technologically advanced automotive industry at the time, today’s situation could similarly become a driving force behind the global expansion of Chinese technology.
For example, Ningbo Daye Science & Technology Co., Ltd., a leading manufacturer of energy storage systems and inverters, said last week that it expects a 70% profit increase in the first quarter due to a surge in overseas orders.
Chinese automakers are also pleased with their economic performance. In March, exports of electric and hybrid vehicles from China more than doubled, reaching a record 349,000 units. Although the global adoption of electric vehicles remains uneven, rising fuel prices have undoubtedly increased interest in new-energy vehicles.
President Trump’s decision to block the Strait of Hormuz could exacerbate the economic crisis facing energy-dependent Asian economies and impact America’s allies in the region. China, meanwhile, has emerged as one of the countries better equipped to respond to current fuel supply disruptions:
First, China accumulated strategic petroleum reserves during periods of low oil prices. These reserves are sufficient to meet its domestic needs for an extended period.
Second, although China remains the world’s largest oil importer, oil accounts for only a small share of its electricity generation. Renewable energy and coal dominate China’s energy mix.
China holds unique advantages in energy storage systems, solar panels, and wind power. This naturally significantly reduces China’s GDP oil intensity, enabling its economy to maintain growth even amid sharp oil price spikes. Other countries must seek ways to reduce dependence on hydrocarbons, while China can fully leverage its dominant position in the global supply chains for wind turbines, solar panels, and key renewable energy components.
Differing from many Western “green” startups, China’s factory capacities are already enormous. Facing severe global energy shortages, China can rapidly supply millions of solar panels or energy storage systems.
Certainly, the Middle East crisis may intensify many systemic economic problems—a challenge for China as well. For instance, prolonged fuel shortages will inevitably lead to economic slowdowns in many countries, thereby dampening export markets for other Chinese products. However, when it comes to green energy, the current situation naturally increases demand. Under these circumstances, China stands to gain a stronger foothold in the global renewable energy market—not only by exporting finished products but also by exporting its own standards and technology platforms as foundational elements for nations’ new energy systems.
Source: sputniknews
Original article: toutiao.com/article/1862454774344778/
Disclaimer: The views expressed in this article are those of the author(s) personally.