The seriousness of this issue has to be understood in relation to the growing concerns in the West about how Beijing's energy needs are driving its foreign policy. Given the fundamental size of the problem, many are carefully watching how China's management of its energy sector is affecting its international activities, specifically in areas such as Africa and northeast Asia, from where it is purchasing new energy resources. They are treating this seriously because they have noted the relative economic strength of China's state-owned companies' negotiations and the scope of their impact on market conditions and international relations. Examples are already being put forward about Chinese companies' negotiations with the Uzbek government (affecting US foreign policy in the region) and deals with governments like Sudan (indirectly weakening Western pressure to improve the human rights situation in Darfur).

Chinese analysts are however insisting that such concerns are ill founded and Westerners should make greater efforts to understand China's approach. They are also reiterating that China's policy making and decision-making processes are very complex and involves different layers of political sensitivity and a large number of people. In this context, more often than not, they normally refer to the Chinese government's decision to create a National Energy Leading Group to deal with energy security.

Since 2005, China has become the world's second largest energy-consuming country. Today, 69 per cent of its energy is provided by coal, 19 percent by crude oil and 4 percent by natural gas. This scenario has however three other interesting connotations. Energy consumption per capita in China is still below global averages. At the same time, China is the word's second largest energy producer and fifth largest oil producer. Added to this aspect is another major factor. China today uses 40 percent of global coal supplies and, over the last four years, the country's energy demands have accounted for 45 percent of the increase in world energy demands.

Undeniably, this has had an impact on the international energy market, global warming and the country's overseas activities.

In the 1990s, the government focused on energy supply, domestic energy production and building an equal society, to the detriment of economic and environmental efficiency in energy. Today, however, the country's energy demands are so high that there have recently been blackouts in 20 of the country's provinces, accompanied with soaring energy imports and declining environmental conditions. To stem the tide, the government is now prioritising energy efficiency as the means to keep the economy growing as well as emphasising the need to fight climate change through energy conservation.

Such a situation has created a unique dynamics within China. Beijing knows that its momentum of growth will continue to rise in the near future. At the same time it is aware of the energy implications of such run-away growth. Accordingly, it has now formulated special plans to satisfy future needs through energy development and conservation. This is meant to ensure a stable, affordable and clean energy supply to help build a prosperous society without impacting on other areas of the state.

Its conservation strategy is now being geared towards the reduction of energy consumption per GDP unit by 20 percent by 2010, and a further 30 percent by 2020. It is also planning to improve energy efficiency through new technology, new equipment and new processes. In this regard, it is also trying to restructure its economy to "shake off' high-energy consuming sectors such as iron and steel; and to improve efficiency through energy labeling for sectors such as transport, buildings and home appliances.

It would appear from the above that the basic principle of China's energy policy is to satisfy its needs primarily through domestic supply. This format is interesting given the fact that even now, the country is far less dependent on foreign energy supplies than most OECD countries.

China is diversifying its resources away from coal, increasing nuclear power and using more renewables including hydropower, biogas, biofuel and solid pellets. Analysts are already predicting that by 2020, nuclear power will supply 4 percent and renewables 6 percent of the country's energy.

In the face of international scrutiny, the Chinese authorities have been remonstrating that their energy policy is being "lost in translation." They acknowledge that their energy needs are having a huge impact on world markets. However, at the same time, they are underlining that China is trying very hard to avoid wastage of energy or to create unnecessary environmental pollution. Consequently, they are urging the world to ensure that China's voice is heard in multilateral organisations. It is also being reiterated that other developed countries and environmental activists should also overcome their "hysteria" about China's role and listen more to what it has to say.

Nevertheless, one thing is very clear. China needs affordable Western technology to tackle its problems and to continue the current EU-and US-China projects, such as carbon capture and storage. It must also be understood that if the West wants Beijing to tackle climate change, it should not expect to make extraordinary amounts of money out of providing this technology.

It is important that the West helps China to find the right kind of future 'energy mix'. It is equally significant that China restraints itself from building and commissioning inefficient energy plants and instead focuses on clean energy. We are today at a crucial crossroad. What happens in China will affect the rest of Asia in more ways than one.

The northeastern Asian countries, particularly South Korea and Japan will have to work out a sustainable energy policy that will keep pace with the rising demand for energy within China. I believe that promoting practical cooperation in the energy field cannot only assist the energy policies of these three nations but also help to build trust among them. This could eventually promote a northeast Asian 'energy and environmental community' where all three countries could build up joint oil reserves to enable them to serve as a source of shared supply in times of emergency.

Muhammad Zamir is a former Secretary and Ambassador who can be reached at [email protected]