China re-embraces LNG as southern power demand surges

Chinese LNG imports have grown rapidly in 2023 after their unprecedented fall in 2022 (see figure 1). The drop in import volumes last year reflected the country’s economic travails, which resulted in large part from zero-COVID policies, the war in Ukraine and a depressed domestic property market. The Chinese economy grew by only 3% in 2022, well below both the 8.4% posted in 2021 and the official target for last year of at least 5.5%. As a result, total primary energy consumption grew by less than 1%. Growth was also well below trend in the electricity generation sector (see figure 2). According to data from the National Bureau of Statistics (NBS), Chinese power production grew by only 2.2% last year. Double-digit growth in solar and wind generation, a 2.5% jump in nuclear output and a 1% increase in hydropower meant that thermal power generation.