The Minutes of the Academic Council Meeting dated 07.02.2025
The sixth meeting of the Academic Council was held on February 7, 2025 by webinar.
The meeting was devoted to the topic: “Problems in the China’s Economy and Energy Sector”. The following speakers presented reports at the meeting:
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Kashin Vasily B. – Director of the Center for Comprehensive European and International Studies at the Higher School of Economics;
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Gromov Alexey I. – Principal Director on Energy Studies at the Institute for Energy and Finance Foundation;
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Baraboshkina Anastasia V. – Researcher at the Faculty of Economics, Lecturer at the Institute of Asian and African Studies at Lomonosov Moscow State University.
V.B. Kashin noted problems with the reliability of China’s macroeconomic statistics, the discussion around which has intensified in recent years. The high growth rates of China’s economy raise doubts among a number of foreign and Chinese experts. This kind of doubt has existed from the very beginning, ever since China started publishing macroeconomic statistics in 1982.
The speaker emphasized that China’s economy has entered a period of cyclical downturn since 2021. The reasons for this, along with the COVID‑19 pandemic, include major reforms undertaken by the authorities since 2020 in the real estate sector, regulation of digital platforms, emission reductions, etc. At the same time, high growth rates are observed in high‑tech industries.
In the international sphere, China is preparing for a deterioration in relations with the United States. Foreign trade relations will be diversified. China attaches great importance to countries that are part of the Belt and Road Initiative. Structural changes will continue within China. The authorities will continue to attempt to support demand and employment, especially among young people, and to reform the education sector. Large‑scale investments in industrial policy will also continue.
According to the report’s assessment, Chinese authorities have in recent years actively sought to conceal the fact of a cyclical downturn. At the same time, in reality, China is not experiencing the worst possible situation during this period. If the next one or two years pass without major disruptions, the country may be able to return to a trajectory of more sustainable growth.
A. I. Gromov focused on China’s oil industry and identified the main directions for its development and prospects. The prospects for the development of China’s oil production industry are determined by two key priorities of the country’s energy policy: ensuring energy security and achieving carbon neutrality by 2060.
The development of the oil industry is not keeping pace with the growth in oil consumption, even despite the resumption of production growth since 2018. Oil consumption is growing at an accelerated rate, despite plans to curb it. Since 2017, China has become the world’s largest net oil importer. Imports already account for 73% of consumption. The problem of such high dependence on imports is planned to be solved by increasing domestic production.
China has considerable resources and oil reserves. In terms of proven oil reserves, the country ranks 13th in the world, holding 1.6% of the world’s reserves. China is also rich in shale oil. Since 2018, oil production has been steadily growing. Currently, 63% of production comes from mature fields. However, production is becoming increasingly expensive.
Thus, in terms of developing offshore oil resources, China has made progress in oil production in shallow waters (at depths of up to 25 m), but deeper production (at depths of 100 to 500 m) leads to a significant increase in the cost of extracted oil. In addition, the most promising areas of the South China Sea and the East China Sea are located in the region of islands that are the subject of territorial disputes with neighboring countries.
Another resource that China is focusing on is the production of ultra‑deep continental oil. China accounts for 19% of the world’s reserves of such oil. However, the production cost of such oil is very high.
An additional important area is shale oil, the technically recoverable resources of which are estimated at 11 billion tons. However, most of them are located in geologically complex mountainous regions, and shale pockets containing oil are much deeper than in the United States. As a result, the production cost of shale oil in China is twice as high as in the United States. At the same time, the discovery by the Chinese of shale oil deposits in already depleted fields in the northeast of the country (Dacin, Shenli, etc.) may give such fields a second life.
A.V. Baraboshkina noted that Xi Jinping’s rise to power in 2012 marked China’s economy entering a “new era,” although the concept of the new model of economic development was only systematized in 2017. In 2014, China announced a transition to a new “normal,” which implied a shift to more moderate economic growth rates. Later, this wording was replaced with a focus on transitioning to high‑quality growth. The main contradiction existing in Chinese society in the “new era” is between the growing needs of the population for a prosperous life and the unevenness and incompleteness of socio‑economic development.
The main drivers of economic growth were the manufacturing industry and high‑tech sectors in 2024,. The highest growth was recorded in the production of cars using new energy sources, integrated circuits, and industrial robots.
In the PRC, it is noted that the growth factors within the previous model of economic development are being exhausted. In particular, there is a slowdown in the growth rate of exports, a decline in the efficiency of investments, and an aging population.
A.I. Makarov contributed to the discussion of the situation in the Chinese economy, focusing on the climate agenda. The speaker emphasized that China is becoming a leader in the global energy transition. Since 2012, the growth rate of greenhouse gas emissions has significantly decreased. In terms of emission volumes, China is approaching the peak, which will be passed before 2030.
The speaker noted that the Chinese carbon regulation system is unique and differs from its Western counterparts. It is based on a combination of market regulation, government planning and targeted industrial policy.
The speakers were asked about the “Made in China 2025” program, which officially ends in 2025, but there is no official information about its results.