Energy security is of increasing concern to China. This arises from the rapid growth and non-substitutability of China's energy demand, the perceptible downturn in China's energy production, and competition for energy imports from neighbouring East Asian economies. This paper explores some of the processes and factors that affect energy demand and supply in China and considers their implications for China's trade in energy and for the energy policies of both China and its trade partners. The analysis shows that China will increasingly depend on the rest of the world as both an export market and a source of raw materials such as energy. Further economic reforms and the development of a liberal and transparent policy environment that allows fluid trade and investment in the Asia Pacific region are essential for energy security in China and in the region.
