China Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in china, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Energy
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China’s energy market is undergoing a significant transformation as the country seeks to diversify its energy mix, modernize infrastructure, and reduce dependence on coal. As the world’s largest energy consumer, China’s energy demand continues to grow due to industrialization, urbanization, and technological advancements. In 2025, the Chinese government will focus on ensuring a stable energy supply through a multi-pronged energy strategy, expanding renewables, and modernizing the grid. Key policy priorities include energy security, making progress in China’s low-carbon transition, and advancing technological innovation. While China aims for self-sufficiency, it remains a major importer of oil and natural gas. U.S. companies can leverage technological expertise to compete in China’s evolving energy landscape despite trade barriers and geopolitical challenges.

Leading Sub-sectors 

Oil & Gas

China is the world’s second-largest oil consumer and has been the largest oil importer since 2017, importing over 70 percent of the 75 million tons it consumed in 2024. Russia, Saudi Arabia, and Iraq are its largest crude suppliers. China’s state-owned Sinopec oil company anticipates China will reach “peak oil” by 2027, with consumption plateauing and then declining in the years following.  The transportation and petrochemical sectors are the biggest oil consumers. Switching to electric and LNG-powered transportation is reducing transportation fuel as a share of China’s oil consumption.  China’s reliance on foreign oil has led to intensified domestic exploration, with U.S. exploration and oilfield equipment companies active in regions like Shaanxi, Tianjin, and Shandong.  Natural gas is China’s fastest-growing primary fuel, but consumption volumes are increasingly volatile as price-sensitive Chinese buyers respond to global geopolitical shocks. In 2024, Chinese imports of LNG fell approximately 2 percent amid high Asian gas prices.  While competition for U.S. LNG suppliers is growing, including from countries like Australia, Qatar, and Russia, opportunities remain for U.S. exporters. Chinese buyers often prefer to do business with U.S. LNG suppliers that offer FOB terms and Henry-Hub-indexed contracts compared to the more rigid contracts of other jurisdictions. The key obstacle to greater U.S. LNG exports to China remains high prices—an issue compounded by 15 percent additional tariffs on U.S. LNG announced by China in February 2025. 

Silica & Quartz Sands

One key area where the United States has a competitive advantage in the renewables sector is in its abundance of sands—most notably silica sands and quartz sands—which are the primary minerals used for solar generation.  U.S. customs data indicates that the United States exported $882.1 million worth of silica sands and quartz sands in 2024, with $403.2. million sold to China—a 45.1-percent year-on-year increase. Not only are U.S. silica & quartz sands exports to China growing rapidly, but they account for an increasing share of total U.S. exports. Since 2020, China’s share of U.S. silica and quartz sands exports have grown from 16.1 percent to 45.7 percent. China is the largest importer of silica sand, importing mainly from the United States, Australia, and Indonesia. China also dominates global solar photovoltaic (PV) manufacturing, controlling over 80 percent of each major stage of the supply chain—including wafer, cell, and module production—intensifying its demand for high-quality silica inputs. While global market data on China’s share of silica and quartz sand processing is limited, anecdotal and trade source reporting suggests that China has steadily increased its downstream processing capabilities to support its solar manufacturing complex.

Distribution & Transmission

China is rapidly expanding its renewable energy capacity, with a record 373.6 GW of new installations in 2023 alone, primarily in solar and wind. This brings China’s total renewable energy capacity to 1,827.3 GW, already exceeding its target of 1,200 GW of installed wind and solar by 2030. However, despite impressive capacity growth, renewable energy accounts for just 35 percent of electricity generation due to challenges like grid connectivity in remote areas, insufficient storage, and transmission inefficiencies. Making the power grid flexible enough to manage the intermittency of renewables requires significant equipment upgrades to enable more flexible capacity ramp-up at coal-fired power plants and hydroelectric plants. Additionally, the long distances between many of China’s utility-scale wind and solar plants and end users requires the construction of long-distance, ultra-high voltage transmission lines. 

Energy Storage

China’s rapid buildout of renewable energy capacity has created significant demand for storage solutions. So far, pumped hydro storage has accounted for the bulk of deployed energy storage in China, reaching 58.69 million kW by the end of 2024, according to Zhang Zongliang, an academician with the Chinese Academy of Engineering. However, deployment of battery energy storage systems (BESS) is growing rapidly, with total storage capacity quadrupling to 31.4 GW in 2023. China’s rapid expansion of storage capacity presents opportunities for foreign firms that can move quickly and flexibly to offer competitive technologies. However, the Chinese government’s industrial policy mainly aims to strengthen its domestic energy storage capabilities. Moreover, the government has also sought recently to introduce market mechanisms into green power purchasing. For example, in March 2025, the government cancelled policy mandates requiring solar and wind energy projects to include energy storage systems, which have been an important factor in driving storage capacity demand. 

Resources

  • Energy Storage Conference & Expo 2025 (ESIE) – Beijing, April 10-12, 2025
  • 29th World Gas Conference (WGC2025) – Beijing, May 19-23, 2025
  • 2025 Central China Petrochemical High-Quality Development Conference & Exhibition – Zhengzhou, Henan, June 17-19, 2025
  • International Exhibition of Electric Power Equipment and Technology (EP Shanghai) – November 18-20, 2025      
  • Nuclear Industry China (NIC) – Beijing, March 19-22, 2026