Energy, Environment and Infrastructure
China’s energy, environment and infrastructure sectors are currently experiencing strong economic and political forces. The most important of these are the switch in energy production from coal to other sources, the development of better oversight in the use of China’s natural resources and the continued growth of the country’s already expansive construction market. Below
Energy - Offshore Wind
China is committed to reducing its reliance on coal and increasing the ratio of renewables in its energy mix. Wind energy, As one of the key contributors to the country’s renewables targets, is being developed at a rapid rate. The country is currently facing the challenge of connecting the 75GW of installed onshore wind capacity from inland provinces to the energy-hungry eastern provinces. This has led to an increased interest in offshore wind as a potential new source of renewable energy that more closely meets demand.
Energy – Coal, Oil & Gas
China’s use of coal is to be capped at 65 per cent of total energy use by 2017. Renewable energy sources will not be able to make up for the difference in demand that will result. As such the oil and gas industry is critical to the economic, social and environmental future of China. Currently the majority of hydrocarbon production in China is oil which has around 2,670 million barrels of oil either under development or planned and almost 2,124 million more either possible or probable by 2018. There is however great potential for gas production and the government seems increasingly focussed on the use of gas as the cleanest, hydrocarbon, energy source.
Energy - Nuclear
Nuclear power accounts for a small but rapidly growing portion of China’s overall electricity mix and is an area that has received considerable attention and effort from central government. China currently has 21 nuclear power reactors operating on eight separate sites, 28 reactors under construction, and additional reactors in the planning stage with an aim to bring the country’s total capacity to 58 GWe(or 6% of the country’s total capacity) by 2020. However, rapid nuclear expansion may bring other problems including a shortfall of fuel, equipment, qualified plant workers and safety inspectors.
Environment - Water
The Chinese water sector is facing great challenges. In the north in particular, shortages are expected to worsen in the coming years, mainly due to the rapid development of the economy. At the same time there is a severe lack of oversight in the water market, which leads to mismanagement and waste. This also makes it very difficult to get a clear picture of the scale of the challenges. In order to meet demand the Chinese government has plans for the water sector to be liberalised, with the hope that foreign technology and expertise can be applied to problems that so far have not been solved either because of inefficient equipment or a lack of incentives.
Environment - Soil Remediation
The contamination of soil with heavy metals was once a long-held and heavily guarded state secret in China. It took five years for the Ministry of Land and Resources and the National Bureau of Statistics to disclose the results of a land survey done between 2006 and 2009; the results painted a dire picture of the state of China’s soil with more than 8 million hectares of farmland – roughly 25 per cent of China’s arable land - too polluted by heavy metals and chemicals to be farmed.
Infrastructure - Construction
The construction sector has played a vital role in stimulating prolonged economic growth in China. It accounts for more than 6 per cent of GDP and has been growing at an average annual rate of nearly 10 per cent since the country's opening up began in 1978.
Demand in the construction sector is driven by the rate of housing supply, the upgrading of obsolete infrastructure networks to allow for large-scale urbanisation, and the need to retrofit old buildings.
Figures from the National Bureau of Statistics illustrate that construction and infrastructure projects are dominated, respectively, by Chinese private enterprises and state-owned enterprises. Like many other sectors, China’s construction market is highly regulated, with the government directing activity at the national and provincial level.
China is very keen to bring in expertise and best practice from the rest of the world, thereby attracting more investment and importing more advanced skills in order to strengthen the supply chain. UK companies are highly respected in the China construction sector and can offer a wide range of expertise in priority areas including green buildings, low-carbon designs and eco-city development.
Showcasing UK Infrastructure to China