The world is reeling from a war-induced oil shock, and China is poised to take advantage. The country builds nearly every component of the 21st-century electrical grid that will be needed to replace the oil currently bottled up in the Strait of Hormuz.
European and Asian countries facing oil shortages are realizing that “all paths to renewable power run through China and its exporters,” said The New York Times. Beijing has for decades “poured hundreds of billions of dollars into green energy” in its drive for energy independence, and its companies lead the world in producing solar panels, batteries and other equipment. The U.S. war against Iran will “catalyze even more investment and interest in renewables,” said Cory Combs, of analysis firm Trivium China, to the outlet. If Russia and Middle Eastern countries that produce the world’s oil are known as petrostates, China might be the world’s first electrostate.
“Consumers and governments around the world” are realizing their energy supplies are at the “mercy of wars and chokepoints,” said The Wall Street Journal. South Korea’s future “will be at serious risk if we continue to rely on fossil fuels,” President Lee Jae-Myung said to a town hall in March. Many are finding the answer in turning to China’s wind and solar power production, “even if that means more dependence on a single country.”
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The U.S. is pushing an “energy-hungry world” into China’s arms, Paul Krugman said on his Substack. President Donald Trump has been attempting to “stop the renewable energy revolution,” but he cannot because the “economics and the science are compelling.” What he can do is “ensure that the revolution passes us by.” His “debacle in Iran” may bring that future ahead of schedule, led by China. The U.S. may someday escape “Trump’s fossil fuel obsession,” but by that time “China’s lead in the manufacture of renewables will probably be insurmountable.”
There will be a “long-term psychological impact” from the Iran war, economist Andy Xie said at The South China Morning Post. The United States and Israel have been in conflict with Iran for nearly half a century, and a ceasefire now will not change the underlying dynamic. Other countries will expect more oil shocks in the future, which will “shape national policies for many years.” The upside: Reducing reliance on oil will take away incentive to wage war against countries like Iran. “Renewable energy makes the world safer.”
What next?
China is inaugurating the “electrostate era,” said Foreign Policy. Beijing spent recent decades plotting an energy strategy “designed precisely for moments like this.” Nearly a third of the country’s energy consumption comes from electricity, and “more than half of the cars sold in China are electric.” That has been the result of policies concerned less with reducing carbon emissions and more with energy independence. Beijing will not entirely avoid the consequences of the current oil shock, but the “push to become an electrostate” will reduce the pain.
