Why Global Energy Shock Could Leave China Stronger Than Ever

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China could come out on top – or at the very least vindicated – as a result of the United States’ and Israel’s war in Iran. As the world reels from skyrocketing oil prices and general energy market volatility, China is reaping the rewards of the huge energy stockpiles that it has been hoarding for years in case of just such a crisis. China’s ‘supergrid’ could not only buffer the world’s second-largest economy from energy market fallout, it could make China a major economic winner at the end of the day.

China’s secret to energy security in the face of global energy crisis comes down to far more than its massive crude oil supplies. The country’s true advantage will come from its ‘supergrid’ and its yearslong push to wean itself off of fossil fuel imports and buildout of renewable energies to become the world’s first electro-state.

A huge part of China’s energy spending has been directed toward building out and fortifying its power grid for greater resilience. “China’s infrastructure build out is far more efficient than that of most countries, and the power grid is no exception,” Penny Chen, a senior director with Fitch Ratings, recently told Fortune. And as AI and manufacturing continue to ramp up strain on global power grids, this will give China an even greater leg up in the competition for global tech and energy production – a race that it's already winning handily.

Source: Liu, Chongru & Zhang, B.H. & Hou, Yunhe & Wu, Felix & Liu, Yingshang. (2011). An Improved Approach for AC-DC Power Flow Calculation With Multi-Infeed DC Systems. Power Systems, IEEE Transactions on. 26. 862 - 869. 10.1109/TPWRS.2010.2068579.