Clean and dirty: China’s two-way energy diplomacy

This article develops the concept of ‘two-way energy diplomacy’ to explain how China simultaneously addresses its traditional energy vulnerabilities and expands its role in emerging green energy markets. This dual approach combines traditional energy diplomacy—focused on fossil fuels—with green energy diplomacy centered on renewables like wind, solar, and energy storage. Drawing on official documents, news reports, think tank publications, academic research, and comparative data, this article examines China’s external activities in oil and natural gas as well as its involvement in wind power, solar power, and lithium-ion battery supply chains. It compares these two forms of energy diplomacy across six dimensions: the energy sources and sectors involved, China’s market position, principal corporate actors, state-business relations, domestic drivers, and actors’ objectives. The analysis shows that traditional energy diplomacy is primarily shaped by China’s position as a major consumer and importer and is led by the central government and national oil companies. This pattern closely corresponds to state capitalism. By contrast, green energy diplomacy reflects China’s position as a leading producer, investor, and exporter and involves a more diverse group of actors, including central and local governments, state-owned enterprises, private firms, and hybrid enterprises. This pattern is better understood as state-permeated capitalism. This dual approach allows China to address short-term energy security while pursuing long-term goals of promoting sustainability and strengthening its position in global energy supply chains. As fossil fuels gradually lose prominence, China’s rise in green energy could potentially challenge U.S. dominance and alter geopolitical dynamics. Understanding China’s two-way energy diplomacy is therefore crucial for assessing shifts in global power and the future of the international energy landscape.