The rise in energy demand has been a defining feature of industrialization, beginning with Britain in the late 18th century, where the emergence of factories powered by steam engines led to a dramatic surge in coal consumption. This transition from agrarian economies to industrial powerhouses not only spurred manufacturing growth but also significantly increased urban populations, as coal facilitated industries like textiles and metallurgy and fueled transportation advancements, notably railways.

Following Britain, countries like Germany and France in Europe adopted similar energy-intensive practices, incorporating electricity to further enhance productivity. In the United States, the late 19th and early 20th centuries saw rapid industrialization, driven by the expansion of railroads and the automobile industry, which created new energy needs primarily met by coal and oil, while electricity revolutionized industry and domestic life. Today, China’s transformation from an agrarian society to the “world’s factory” marks a new chapter in this narrative, characterized by unprecedented industrial growth and an extraordinary demand for energy resources, particularly coal. Yet, Chinese energy appetite is growing at an unprecedented level, making it many times larger than those of western Industrial giants.

While China itself possesses vast resources, the country’s foremost status as the largest consumer in the world is as a result of rapid industrialization, urbanization and an ever-growing demand for technological advancement. China has continued to face the pressure of energy demand through manufacturing, infrastructure, and an attempt to control the technological sector. As China turns its focus to AI, EVs, and smart manufacturing, its insatiable appetite for resources – be it, fossil or renewable – is reshaping energy demand, markets and supplies, and geopolitics in unprecedented ways.

Overview of China’s economic growth and Industrialization

The growth and transformation of China’s economy are subtle but powerful.

                                                                                                                  —Francisco Betti

Over the past four decades, because of economic reforms, China’s economy is growing at an unprecedented rate of more than 9 percent, and this has lifted more than 800 million Chinese citizens out of poverty. Energy demand in China has remarkably reached higher levels, since the Chinese Economy has expanded at a very high rate.

The export-oriented growth model of the country that was mainly led by investments and exports is shifting towards the consumption and services sector. China’s Gross Domestic Product expanded by 5% year on year in the first half of 2024 but the quarterly growth rate has calmed down from 5.3% in the first quarter to 4.7% in the second half indicating the need for stronger policy support to achieve the set year’s targets. While extreme poverty was eliminated by 2020, still, 17.2% of the population lives on under $6.85 a day.

Global energy consumption trends are being dictated by Asia’s energy consumption titan “China”, owing to its mammoth size. China overtook Europe in per capita energy consumption in 2023 backed up by more renewable capacity alongside coal fired power. Having been the world’s factory, China’s energy consumption requirements are escalating. The Dragon economy has displayed consistent growth in renewable power, especially renewable electricity, with freshly installed renewable energy capacity of 1.59 billion kilowatts early in 2024. Still, it needs investment in infrastructure, smart grid, and energy transition to support its economic growth, maintaining energy security and sustainability.

Factors Contributing to Rising Energy Demands

The foremost factor driving energy demand is the industry, for instance, the sector has experienced substantial growth in 2024, with the added value of major industries rising by 6% in the first half of the year. The high-tech industry, in particular, saw an impressive 8.7% growth rate. This industrial expansion has been accompanied by increased energy demands, driven primarily by urbanization. China’s cities now consume more energy than its industrial sector due to the rising living standards of a growing middle class and large-scale migration to urban areas. It is predicted that for every 1% increase in urbanization, the country’s energy consumption will rise by at least 60 million tons of coal.

The urbanization rate in China has soared from 17.92% in 1978 to 66.16% in 2023, and this movement is expected to continue, with the government aiming to create over 12 million jobs in metropolitan areas by 2024. As urbanization increases, so does energy consumption, as city households consume 50% more energy than rural ones. By 2025, China’s power consumption is anticipated to reach 10,498 TWh, compared to 4,475 TWh in the United States.

China is also focusing on technological advancements and renewable energy to meet its growing energy needs. Investments in 5G networks, artificial intelligence, and renewable energy sources such as wind and solar reflect the country’s commitment to modernizing its industrial and energy infrastructure. The “Made in China 2025” campaign highlights China’s ambition to become a global technological leader. However, balancing energy demand with sustainable consumption remains a complex task, as the adoption of advanced technologies and rapid urbanization continues to fuel the nation’s rising energy requirements.

Energy Mix of the Dragon 

The main sources of energy in China’s energy mix are still coal, oil, and natural gas. China relies heavily on these resources. By mid-2024, China accounted for 54% of the world’s coal-fired power capacity, with 1,147 GW in operation. Even the number of new coal power approvals has slowed down recently—just 12 new projects were approved in the first quarter of 2024—coal still plays a mammoth role in the energy mix. Globally, China helped install 67% of the coal-fired capacity that was being commissioned in 2023.

Where China imports its fossil fuels from?

As Gas imports are concerned, China is the world’s largest importer of natural gas, bringing in both pipeline gas and liquefied natural gas (LNG) to meet its growing energy demands. Russia, the Power of Siberia 1 pipeline remained one of the main suppliers of natural gas to China. This pipeline supplied nearly 38 billion cubic meters of natural gas in 2024. Turkmenistan is also a key contributor of approximately 33 billion cubic meters. Uzbekistan and Kazakhstan also contributed significantly.

The country is also a major importer of LNG, and the largest supplier, Australia supplied nearly 24 million mt of LNG by 2024. Qatar’s LNG exports amounted to 25 million mt in 2024 to China. United States 12 million tons. Malaysia and Indonesia jointly exported around 15 million mt of LNG to the Chinese market.

Despite having abundant coal resources, the country heavily relies on imported coal. China’s major supplier of coal is Indonesia; all through the year 2024, importers bought about 130 million tons of coal. Russia supplied about 70 million tons and Australia about 55 million tonnes of coal. Mongolia supplied about 30 million tons.

Renewable Energy 

China has installed 1,180 GW of solar and wind power by early 2024, more than coal’s 1,146 GW for the first time. Compared to previous years, China added almost twice as much utility-scale solar and wind capacity in 2023. Between 2023 and 2028, the nation is anticipated to contribute 56% of the additional renewable capacity globally. This expansion is facilitated by government regulations and investments, which include notable developments in the production of wind turbines and solar photovoltaic (PV) systems. China’s rapid deployment of renewable technologies reflects its commitment to achieving net-zero emissions by 2060, although the country will need to manage the ongoing role of coal and other fossil fuels in its energy usage.

Challenges and Implications

China’s rapid industrialization and heavy reliance on coal have led to severe environmental challenges, including widespread air pollution and significant greenhouse gas emissions. While the country is a global leader in renewable energy expansion, particularly in wind and solar capacity, its dependence on coal hampers progress in environmental protection. Despite incorporating more renewable energy sources, the nation faces issues like system congestion and curtailment, with solar power curtailment exceeding 5% in March 2024, highlighting the challenges in managing the surge in renewable energy and effectively integrating it into national power grid.

Likewise, if we look outside of China, the situation depicts China’s vulnerability on imported energy and its continuous reliance on the littoral states from where the imports are being made. For instance, the South China Sea dilemma is one such bad dream, which haunts China and it desperately wants to get complete control of the maritime routes either by hook or by crook.  This region is significant for Chinese energy imports, as over 80% of China’s imported oil is shipped through the South China Sea region and dominance of these sea lanes is crucial for PRC’s energy policy.

As a result, China has intensified its naval patrols in the area to protect its sea communications from disruptions due to ownership of the economic zones or presence of foreign navies. One of them concerns the creation of Ultra High Voltage (UHV) transmission lines to interconnect renewable energy centers, wind and solar in western China with densely populated areas in the eastern part of the country. Furthermore, China is gradually expanding on the demand for coal fired power because risks on access to the energy mix from suppliers may be disrupted by tensions in the South China Sea and competition with other main energy consumers like the U.S., Japan and India.

Future Outlook

Significant changes in China’s energy sector are anticipated over the next few years, with electricity generation projected to increase at a rate of 3.33% annually from 2024 to 2029. This growth is primarily driven by the rapid development of renewable energy sources, particularly wind and solar power, as well as the increasing energy demands of the nation.

By the end of 2024, China is expected to add 1,200 GW of wind and solar capacity, surpassing earlier projections and achieving ambitious targets ahead of schedule. This expansion is part of China’s overarching plan to enhance its total renewable power generation capacity by over 300%—or 3.9 TW—from 2022 to 2030. However, despite these advancements, coal power continues to play a significant role in China’s energy mix, as new coal projects are still being pursued to manage the intermittency associated with renewable energy sources.

Plans are underway to integrate a unified national power market by 2030 to improve the efficiency of renewable resource utilization and mitigate fluctuations in energy supply and demand. To fully harness renewable energy resources, advancements in storage technologies and improvements in the power distribution network are necessary, including the deployment of Ultra High Voltage (UHV) transmission technology to connect renewable energy sources with demand centres across the country.

End Note

China’s energy landscape is shaped by rapid economic growth, urbanization, and industrial demand. Despite significant investments in renewable energy like solar and wind, coal remains a major part of the energy mix due to its role in ensuring energy security. China intends to significantly increase its use of renewable energy by 2030 and is on target to surpass 1,200 GW of wind and solar capacity by the end of 2024.

Reducing reliance on coal and integrating these renewables into the grid are still major obstacles, though. Addressing these issues is crucial for China’s sustainable growth and its impact on the global energy market. Effective management of this transition will be essential for achieving environmental goals and maintaining economic stability.

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In recent years, tensions in the South China Sea have continued to escalate, particularly as China becomes more assertive in its territorial claims. The Philippines, a key player in this geopolitical flashpoint, has repeatedly clashed with China over contested waters. This situation raises an important question: in the event of a serious confrontation between the Philippines and China, would NATO member states come to the aid of the Philippines?

Although NATO is a Euro-Atlantic military alliance with its primary focus on Europe and North America, its increasing involvement in the Indo-Pacific region has drawn attention. NATO members are not bound by legal obligations to defend the Philippines, yet their growing naval presence and strategic interests in the Indo-Pacific may play a significant role in shaping how they respond to a South China Sea crisis.

NATO’s Presence in the Indo-Pacific

NATO has historically maintained a cautious approach toward direct involvement in the Indo-Pacific. However, the security landscape is rapidly changing, and NATO is now stepping up its naval presence in the region. A recent example is the deployment of the Italian aircraft carrier *Cavour* and the USS *Abraham Lincoln*, both of which conducted joint exercises near Guam. Italy, like several other NATO members, is increasingly viewing the Indo-Pacific as an area of strategic importance. Italian Rear Admiral Giancarlo Ciappina stated that this deployment demonstrates Italy’s ability to project power globally, a shift in NATO’s posturing that reflects a broader shift among European nations.

The rise of NATO’s engagement in the Indo-Pacific stems from concerns about China’s growing influence and military capabilities. China has the world’s largest navy by the number of warships, and its aggressive maneuvers near Taiwan and the South China Sea have alarmed not only the U.S. but also its European allies. China’s increased presence in these waters, coupled with its claims over the majority of the South China Sea, has escalated tensions with neighboring countries, including the Philippines.

As a result, European countries like France, the UK, Germany, and the Netherlands have been deploying naval assets to the region. These deployments are not just symbolic; they reflect European recognition of the Indo-Pacific’s critical importance to global trade and security.

Legal and Strategic Constraints for NATO Members

Despite NATO’s growing presence in the region, it is important to note that NATO’s mutual defense obligations, enshrined in Article 5 of the NATO treaty, only apply to attacks on member states in Europe and North America. This means that, legally, NATO members are not compelled to defend the Philippines in the event of a military confrontation with China. The Philippines is not a NATO member, and the South China Sea is far outside NATO’s traditional sphere of operations.

However, NATO’s involvement in global security issues has never been strictly limited by geography. NATO’s mission has evolved since the Cold War, with member states engaging in military operations beyond Europe, such as in Afghanistan and Libya. The inclusion of China in NATO’s guiding strategy document in 2022 marked a significant shift. This document describes China as a challenge to NATO’s “interests, security, and values,” signaling that the alliance is increasingly aware of the need to address security threats beyond its traditional boundaries.

NATO’s growing interoperability with non-member allies like Japan, South Korea, Australia, and New Zealand further complicates the picture. These countries, often referred to as the Pacific Four, have strengthened their ties with NATO in recent years. Leaders from these nations attended NATO’s 2024 summit, underscoring the alliance’s acknowledgment that the security of the Euro-Atlantic and Indo-Pacific regions are interconnected. As U.S. Ambassador to Japan Rahm Emanuel put it, “The security of the Indo-Pacific and the security of the Euro-Atlantic are two sides of the same coin.”

U.S. Commitment and the Philippine-U.S. Mutual Defense Treaty

While NATO’s legal obligations may be limited in the Indo-Pacific, the U.S. has a separate mutual defense treaty with the Philippines, signed in 1951. This treaty obligates both nations to support each other in the event of an armed attack in the Pacific, providing a much more straightforward path for U.S. involvement in a South China Sea conflict. Given that the U.S. is a leading member of NATO, any military support for the Philippines would likely include collaboration with NATO allies, particularly those with assets in the region.

The United States has already demonstrated its commitment to the Philippines, conducting joint military exercises and providing military aid in the face of Chinese assertiveness. However, as the Pentagon faces growing demands elsewhere, such as in the Middle East and Europe, it may call on its European allies to augment its capabilities in the Indo-Pacific, especially if a crisis in the South China Sea escalates.

European Contributions to Indo-Pacific Security

Although European NATO members are unlikely to take a front-line role in the South China Sea, their contributions to Indo-Pacific security could be crucial in several ways. European navies are increasingly capable of augmenting U.S. forces, whether by providing additional platforms for U.S. aircraft, bolstering submarine-hunting capabilities, or assisting with logistical support. These roles may not involve direct combat with Chinese forces, but they could prove essential in a larger conflict, allowing the U.S. to focus its resources on critical areas.

The UK, for instance, has scheduled the deployment of the HMS *Prince of Wales* carrier strike group to the Pacific in 2025, and France has announced plans to send its *Charles de Gaulle* carrier. These deployments signal a readiness by European powers to maintain a presence in the Indo-Pacific and act as a deterrent to China’s aggressive maneuvers in the South China Sea.

While some analysts argue that European navies cannot substitute for the U.S. presence in the Indo-Pacific, their participation could relieve pressure on the U.S. Navy, particularly as American carriers are increasingly stretched across the globe. Brent Sadler of the Heritage Foundation has noted that the U.S. currently lacks the number of carriers needed to sustain global demands, making European support more valuable than ever.

Economic and Strategic Interests

NATO members have economic as well as strategic reasons for their growing interest in the Indo-Pacific. Around 30% of the world’s trade flows through the South China Sea, including a significant portion of Europe’s energy imports. Any disruption in these shipping lanes would have severe repercussions for global trade and energy security. As European countries continue to develop national strategies that emphasize the importance of free-flowing trade in the Indo-Pacific, it becomes clear that their interests are tied to the stability of the region.

Moreover, the Philippines is an important strategic partner for Europe, with shared interests in maintaining a rules-based international order and freedom of navigation. While European nations may not be obligated to defend the Philippines militarily, their interests align closely with Manila’s, particularly regarding the protection of global trade routes and opposition to China’s expansionist policies.

The Risk of Escalation

Despite NATO’s growing involvement in the Indo-Pacific, the risks of military escalation with China cannot be understated. China has consistently criticized NATO’s presence in the region, accusing the alliance of provoking instability. The Chinese government has aligned itself with Russia in condemning NATO, with both countries conducting joint military exercises to demonstrate their opposition to Western influence.

China’s growing military capabilities, including its expanding navy and advancements in missile technology, present a formidable challenge for NATO and its partners. In the event of a conflict in the South China Sea, the involvement of NATO member states would undoubtedly escalate tensions with China, potentially drawing other regional powers into the fray.

Conclusion: A Conditional Support?

In summary, NATO member states are unlikely to be legally or automatically obligated to support the Philippines in the event of a South China Sea crisis. However, the evolving strategic environment in the Indo-Pacific suggests that some level of support could be forthcoming, particularly from the United States and European NATO members with naval assets in the region. While NATO’s primary focus remains the Euro-Atlantic, its growing presence in the Indo-Pacific indicates that it views the region’s stability as essential to global security.

The degree of support would likely depend on the scale of the crisis and the U.S.’s involvement under its mutual defense treaty with the Philippines. European nations, while not leading the charge, could play significant supporting roles, especially if they view China’s actions as a direct threat to international trade or global security. In such a scenario, NATO’s role in the Indo-Pacific would likely be one of augmentation and deterrence, rather than direct intervention.

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From the land of the samurai to the forefront of innovation, Japan’s journey is nothing short of remarkable. After WWII devastation, Japan not only rebuilt—it redefined the future. In the 1980s, they gave us the Walkman, revolutionizing personal tech, and the Shinkansen, the first bullet train, forever changing travel; but that was just the beginning. Today, Japan leads the world in robotics, smart cities, and even space exploration. Picture specialized robots that care for the elderly, cutting edge vending machines that predict your cravings, and magnetic levitating trains that hover on air.

Japan is living in the future through innovations that feel straight out of science fiction. Cities like Fujisawa are designed as smart ecosystems, where energy, transportation, and homes are connected and run by the network of artificial intelligence. From smart cities to space exploration, Japan isn’t just dreaming of the future—it’s already living it. Let’s have a glimpse of the future by pondering the question, “Is Japan really living in the Future?”

AI Integration: Powering Daily Life with Artificial Intelligence

Hold on to your sushi rolls, because Artificial Intelligence isn’t just a distant dream in Japan; it’s a thriving reality. With a predicted 920,000 AI-related jobs by 2030, 52% of Japanese enterprises currently riding the AI wave, and a $4.9 billion market target, Japan is rapidly becoming the Silicon Valley of the East.

From robots to research institutes, Japan’s AI scene is thriving, with firms garnering over $1 billion in funding in 2020 alone. The country is setting its sights on a massive AI market and wants to train a tiny army of AI engineers by 2025. Japan produces roughly 45% of the world’s industrial robots, which drive efficiency in industries ranging from manufacturing to healthcare. For instance, PARO, a therapy robot, is utilized in more than 30 countries to help dementia patients.

Japan also leads in AI development, with corporations such as SoftBank and Sony. The advent of automated convenience stores, such as FamilyMart’s AI-powered stores, eliminates the need for human employees, while smart toilets outfitted with health sensors and built-in AI health diagnostics are becoming more ubiquitous in homes and public places. The Japanese government’s “Society 5.0” effort embodies the country’s goal for an AI-powered future in which technology solves societal problems. Japan has invested more than $20 billion in AI and robotics innovation, establishing itself as a global leader in automation, digital healthcare, and smart city development.

Japan is paving the way for a tech-driven future, with AI-powered cars, maglev trains reaching speeds of over 600 kilometers per hour, and smart home systems becoming the standard.

Efficient Infrastructure

Japan’s reputation extends beyond its rich culture to its remarkable infrastructure. With a population of 123.3 million in a compact area, Japan’s transport system is a model of efficiency. The Shinkansen (bullet train) is renowned for its speed and punctuality, reaching up to 320 kilometers per hour and covering major routes like the 370 kilometers route between Tokyo and Sendai in just 1 hour and 33 minutes. Adding to this, futuristic maglev trains can zoom at over 600 km/h, showcasing Japan’s cutting-edge transport technology.

Tokyo’s extensive network includes 882 train stations, with 282 subway stations ensuring eco-friendly, efficient travel. Japan’s airports, such as Haneda and Kansai, manage millions of travelers seamlessly. As an island nation, Japan excels in both shipping and air freight, supported by 5,000 ports and a significant merchant fleet, making it a global leader in commerce. The country’s infrastructure includes 1,218,800 kilometers of highways and 27,000 kilometers of railways, excellent for robust connectivity.

Unique Lifestyle and Culture

Japan’s cities are a stunning fusion of tradition and modernity. In Tokyo, futuristic skyscrapers like the Tokyo Skytree rise 634 meters above ancient temples such as Senso-ji, creating a mesmerizing urban landscape. This blend of old and new is not just visual but experiential. Japan is a leader in integrating high-tech gadgets into daily life. Wearable translation devices, such as Pocketalk, can translate 74 languages in real-time, making communication effortless for travelers.

Holographic displays are becoming more common in places like Shibuya, offering interactive experiences in shopping and entertainment. The nation’s innovation extends to its cultural practices. For instance, the Ghibli Museum in Mitaka features interactive exhibits that blend technology with traditional storytelling, captivating millions of visitors. Japanese cities also showcase cutting-edge robotic technology in everyday life, from humanoid receptionists at hotels to robotic baristas in cafes.

“The Japanese way of working is characterized by a relentless pursuit of perfection and a deep respect for discipline and detail.”

(Kenichi Ohmae)

In July 2024, Japan unveiled a new series of banknotes featuring cutting-edge anti-counterfeiting technology, including three-dimensional holographic stripes and tactile markers for the visually impaired. This update to the ¥10,000, ¥5,000, and ¥1,000 notes reflects Japan’s commitment to blending advanced technology with its rich cultural heritage.

Japanese culture is also marked by discipline and social responsibility, as seen in the “Osouji” custom, where people rigorously clean public spaces, such as stadiums, after events. Additionally, Japan’s education system emphasizes innovative teaching and STEM subjects, highlighting its focus on cultivating a forward-thinking society.

Work Ethic and Social Values

Japan’s work ethic is renowned for its emphasis on efficiency, discipline, and continuous improvement. The concept of “kaizen” which means “continuous improvement”, is embedded in every aspect of Japanese business and culture.

Taiichi Ohno, a pioneer of the Toyota Production System, said: “Without standards, there can be no improvement.”

Companies like Toyota have perfected this philosophy, leading to a 25% increase in productivity over the past decade by refining processes and fostering innovation. This relentless drive for progress is also reflected in Japan’s high employee retention rates and the culture of lifetime employment that remains influential, despite changing global trends. Respect for nature is deeply ingrained in Japanese values, visible in meticulously maintained traditional gardens and the integration of eco-friendly practices in daily life.

,“The ultimate goal of farming is not the growing of crops, but the cultivation and perfection of human beings.”

(Masanobu Fukuoka)

For example, Tokyo’s Eco Tokyo initiative aims to reduce greenhouse gas emissions by 30% by 2030. Additionally, Japan leads in recycling, with a 90% recycling rate for plastic bottles, thanks to rigorous sorting and community participation.  

End point

In essence, Japan’s blend of advanced technology, efficient systems, unique lifestyle, and cultural values not only highlights its remarkable progress but also sets it apart as a nation truly living ahead of its time. With a relentless pursuit of innovation, from the world-renowned Shinkansen to cutting-edge banknotes, and a deep respect for tradition and sustainability, Japan integrates the past with the future. Japan’s ability to harmonize these elements ensures it remains at the forefront of the future, demonstrating how a nation can balance technological advancement with enduring cultural heritage.

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