China pushes energy overhaul as global markets react to Iran conflict

Chinese President Xi Jinping has called for accelerated planning and construction of a new energy system to safeguard the country’s energy security, as global markets face disruptions linked to the ongoing Iran conflict.

Xi emphasized the need to deepen China’s energy strategy while advancing a transition toward a more resilient and diversified system, Reuters reports.

“The Party Central Committee has gained a profound grasp of global energy development trends and made major decisions by advancing the new energy security strategy in depth,” he said, referring to the ruling Communist Party’s central leadership.

While Xi did not directly mention the conflict, his comments come as the United States and Iran consider a Pakistan-brokered plan to end their five-week-old standoff, even as tensions persist over the Strait of Hormuz. Analysts note that China remains relatively well-positioned to weather rising oil prices, given its reliance on coal, substantial reserves, and limited dependence on Hormuz-linked imports.

Xi underscored the continued importance of traditional energy sources alongside renewables. “The path we took in being the first to develop wind and solar power has now proven to be forward-looking. At the same time, coal-fired power remains the foundation of our energy system and must continue to play its supporting role,” he said.

China, which operates more than half of the world’s coal-fired power capacity, continues to balance its role as the largest carbon emitter with efforts to expand cleaner energy sources. Despite reaffirming coal’s central role, Xi stressed the importance of maintaining momentum toward low-carbon development.

By Vafa Guliyeva