Exclusive Interview with Lin Boqiang, Director of the China Energy Policy Research Institute at Xiamen University: Refusing to Be "Strangled" by Oil! What Are China's "Trump Cards" in Energy Transition?

Financial Daily Reporter: Zhao Li Nan    Editor: Wei Guan Hong

Recently, international geopolitical tensions have intensified, and the fluctuations in the Strait of Hormuz are like a “black swan,” once again triggering the sensitive nerves of the global energy market.

Faced with the crisis of strait blockage and the threat of soaring oil prices, global inflation fears are quietly spreading. In this worldwide energy test, can China’s industry stand alone? How much longer must humanity go before escaping the fate of being “held hostage” by oil?

With these core issues in macroeconomics and energy transition, on March 13, the Daily Economic News exclusive interview with Professor Lin Boqiang, Distinguished Professor of the Ministry of Education and Director of the China Energy Policy Research Institute at Xiamen University.

As an authoritative expert with long-term focus on low-carbon clean transition and energy economics and policy, Lin Boqiang believes: the sudden geopolitical crisis precisely confirms the correctness of China’s坚持“wind power, photovoltaics, energy storage, and electric vehicles” this energy substitution path.

He points out that China currently has ample commercial and strategic oil reserves, which gives China a strong “immunity” against short-term oil price fluctuations.

Looking ahead, with breakthroughs in solid-state battery technology and explosive growth in energy storage during the 14th Five-Year Plan period, China’s new energy vehicle penetration rate is expected to soar to 80% or even 90%. At that time, China will truly build a highly resilient energy security line.

“”

Lin Boqiang Photo Source: Interviewee provided

Strait Crisis? Evidence Against China’s Path

“Up to now, oil remains the world’s largest energy consumption source, far surpassing other energy types,” Lin Boqiang pointed out sharply at the start of the interview, highlighting the current state of global energy consumption.

He emphasizes that crises in critical choke points like the Strait of Hormuz will directly impact the global economy. This impact is not only reflected in sharp fluctuations in crude oil prices but will also have far-reaching effects on the entire upstream and downstream industrial chain. Oil’s impact on the global economy is the greatest among all energy sources.

So, can humanity completely rid itself of dependence on oil?

With a Ph.D. in Economics from the University of California, and serving as the editor-in-chief of the top international energy economics journal “Energy Economics,” Lin Boqiang has a clear understanding. He frankly states: “Completely eliminating oil is currently difficult, but significantly reducing dependence through vigorous development of wind power, photovoltaics, energy storage, and electric vehicles is entirely possible.”

Lin Boqiang points out that the crisis in the Strait of Hormuz actually serves as a crucial proof—affirming that China’s vigorous development of “wind power, photovoltaics, energy storage, and electric vehicles” is the correct path of substitution, and is a major boon for the new energy industry. Over the past decades, the industry has generally assumed that the Strait of Hormuz would not close, but this crisis has undoubtedly sounded an alarm for countries worldwide, accelerating the transition toward “energy localization” strategies.

However, energy localization “sounds easy but is hard to do.”

Lin Boqiang analyzes that localization depends on resource endowment. “Many countries lack oil and gas resources, or even any fossil fuels. Without resource endowment, it’s difficult to truly control energy supply.” Fortunately, although fossil fuel distribution is highly uneven globally, wind and solar energy are widely available. Therefore, for most countries, the only feasible path toward energy localization is to vigorously develop wind and solar power.

In this transition, China is already leading the world. Lin Boqiang states that China’s new energy vehicle penetration rate has now exceeded 50%. “In southern regions, currently, for every 10 cars sold, 6 or 7 are electric vehicles, which have already gained an absolute advantage.”

Lin Boqiang believes that although there is still a long way to go to fully achieve a fossil fuel-free ultimate goal, and despite complex geopolitical resistance to offshore wind and solar projects, China’s path to greatly reducing oil dependence has been strongly validated by reality.

Inflation Fears? China Has Greater “Immunity” to Oil Price Fluctuations

As global oil prices fluctuate, market concerns about imported inflation are increasing. However, Lin Boqiang believes that China’s macroeconomy has considerable resilience and “immunity” against short-term international oil price hikes.

“Because oil is priced globally, consumers will definitely feel the pinch at the pump,” Lin explains. “But China’s oil supply remains very ample. Our commercial reserves plus strategic reserves can support more than 100 days without issue.” He believes that as long as the closure of the Strait of Hormuz is not prolonged enough, short-term fluctuations will not lead to a supply crisis domestically.

Deeper confidence comes from China’s unique energy consumption structure. Lin Boqiang provides a stark contrast: in China’s current energy mix, oil and gas account for only about 27%; by contrast, the U.S. relies on oil and gas for up to 72%, and the EU over 60%.

“High dependence on oil and gas in Europe and America means that rising oil prices have an immediate impact on their economies,” Lin points out. “But for China, oil price fluctuations have a relatively smaller impact on macroeconomics and the entire upstream and downstream chain because their share in the energy structure is relatively small.”

Additionally, Lin Boqiang notes that domestic oil prices are also subject to government moderation, with state-owned enterprises playing a significant buffering role. Therefore, as long as the crisis does not evolve into a long-term stalemate, the impact on China’s economy will be limited.

Although short-term risks are manageable, long-term vigilance remains essential. Lin Boqiang reminds that China’s oil and gas import dependence still remains above 70%. To ensure energy security, China has established four major energy import channels to diversify risks: LNG import channels (about 30% pass through the Strait of Hormuz), Middle Eastern oil channels (about 50% of China’s Middle Eastern oil passes through the Strait), Russian oil channels, and the Central Asian oil and gas pipeline including the West-East Gas Transmission.

“Facing crises, the best strategy is still to reduce dependence on foreign oil and gas,” Lin offers his policy advice: the core strategy remains unwavering in advancing the combination of “wind power, photovoltaics, energy storage, and electric vehicles.”

Breakthrough Weapons? Solid-State Batteries and Energy Storage to Explode

As head of the China Energy Policy Research Institute at Xiamen University, with hundreds of academic papers under his belt, Lin Boqiang has identified two key technologies as China’s ultimate weapons for energy breakthrough: solid-state batteries and energy storage technologies.

He believes that, according to various statistics, transportation consumes about 57% to 62% of China’s oil. Therefore, electric vehicles are undoubtedly the key to solving oil dependence. Lin predicts that China’s new energy vehicle penetration rate will not only quickly surpass current levels but reaching 70% to 80% is entirely feasible, even possibly up to 80% to 90%.

“The trend of replacing fuel vehicles with new energy vehicles in the south will be very rapid,” Lin emphasizes. He also notes that the northern market still faces challenges such as battery performance degradation in low temperatures, and solving this problem hinges on breakthroughs in solid-state battery technology. Although current solid-state batteries are still costly—“probably a few thousand yuan more expensive for consumers”—Lin is confident that once scaled, costs will naturally come down.

He forecasts that by 2030 or even earlier, with the improved economics of solid-state batteries, new energy vehicles will be widely adopted.

Beyond transportation, artificial intelligence also poses new challenges to the energy structure. Will large-scale AI applications trigger a new energy crisis?

Lin Boqiang clearly states that AI’s massive computations mainly consume electricity, not oil and gas, so it does not directly impact oil and gas demand. To meet the surging electricity needs, future growth will mainly rely on coal-fired power, wind, solar, and the longer development cycles of nuclear and hydropower. However, under strict carbon emission constraints, the space for coal power development is limited. Although currently China’s power grid stability still largely depends on coal, the utilization hours of coal plants are gradually decreasing. Short-term, coal is cheap; long-term, it becomes expensive and uneconomical.

“To maintain large-scale, stable growth of wind and solar energy during the 14th Five-Year Plan, energy storage is an absolutely necessary hurdle,” Lin points out. The development of energy storage technology is a “short-term expensive, long-term cheap” core strategy. Once costs are significantly reduced through scale effects, it will not only solve the volatility issues of renewable energy integration but also reshape China’s fundamental energy architecture.

“I estimate that during the 14th Five-Year Plan, China’s energy storage industry will experience explosive growth,” Lin concludes with confident prediction.