Energy trade stability of China: Policy options with increasing climate risks

Abstract

As the world's largest importer of energy, China has been facing severe energy security issues. In the context of the challenges of global energy transformation brought about by climate change and the intensification of global political risks, a survival analysis approach is used in this paper to investigate China's energy trade stability. The results show that the energy trade linkages between China and 153 other countries are complex and unstable, featuring short periods of trade with many countries. Specifically, geopolitical riskier areas, such as the Middle East and Africa, have the lowest trade stability. The survival curves also demonstrate clear heterogeneity among different types of energy. Climate risks, including both physical and transitional risks, are found to have significant effects on energy trade stability. Finally, several policy options are proposed to improve energy trade stability in China, paying special attention to the increasing globe climate risks.