Exclusive Question to Zheng Yongnian: China's energy diversification and pragmatic approach are more comprehensive and more stable than the outside world imagines.

Ask AI · Why Zheng Yongnian emphasizes energy diversification to avoid economic structural dependence?

By Yuan Xiaoli

Edited by Liu Peng

On March 25, during the 2026 Annual Meeting of the Boao Forum for Asia, Zheng Yongnian, President of the School of Public Policy at The Chinese University of Hong Kong, Shenzhen, and Chairman of the Board of Directors of the Guangzhou Greater Bay Area Research Institute, shared in-depth insights on changes in the global energy landscape and China’s energy strategy during an exclusive Q&A session with Tencent Finance. He believes that energy issues should adhere to a pragmatic, fact-based approach, avoiding the extreme politicization of ideology. China should pursue a diversified, practical, and steady energy development path—its direction is correct and its results are significant.

Zheng Yongnian noted that, from a global perspective, the world does not lack energy, nor does it lack energy-producing countries. He said that the United States was once the world’s main energy-consuming country for a long time, but it has since transformed into a major energy exporter, while China has now become one of the world’s largest energy-consuming countries.

He believes that the “energy curse” concept proposed by economics circles in its early days still carries real significance today. He pointed out that Russia, Iran, and some Middle Eastern countries, despite sitting on abundant energy resources, have seen their economic structures increasingly depend on the energy sector. The structural challenges brought about by this resource-dependency development model are issues that all countries should take seriously and reflect on in depth. He said that although the goal of diversifying energy structure was put forward years ago, in real-world implementation it still faces many difficulties.

When discussing long-term energy development, Zheng Yongnian emphasized that although the world is not yet facing an urgent crisis of energy depletion, in the long run energy will eventually be depleted—so it is crucial to lay out new energy in advance. “In this regard, I think China has done the right thing, and it has done it well.” He said that China has planned new energy ahead of time, promoted energy diversification, and also established a large-scale petroleum reserve system, which gives China strong, controllable capacity to respond to risks in the short term.

Zheng Yongnian further used the example of Zhejiang Yuyao’s plastics industry to illustrate that the impact of energy on a country’s economy and society goes beyond transportation and travel. Plastics and many chemical products are derived from petroleum refining, fully demonstrating that energy is tightly, inseparably linked to manufacturing.

He said that China is both a major country that imports energy and a major coal-producing country, and it is also seeing rapid development of new energy. Therefore, he believes that in addressing energy crisis issues, the key is still to follow a diversified path and establish a diversified, secure energy development route.

He also cited Elon Musk’s viewpoint, saying that Musk also believes China’s energy development direction is correct. For example, offshore wind power and solar power have huge potential. The total amount of energy that solar power could provide may even far exceed the world’s current total energy amount.

But Zheng Yongnian also stressed that the important role of traditional energy must never be ignored. He used Europe as an example to point out that Europe previously imposed strict restrictions on Russian energy, but recently, due to changes in the situation involving Iran, it has had to loosen controls. “This shows that their previous goals were overly idealistic, even tinged with utopian colors—in reality, they are not sustainable.”

Regarding the energy policy of former U.S. President Donald Trump, Zheng Yongnian said that although he holds reservations about the scientific validity of some of Trump’s statements, on the point of “not giving up traditional energy,” he believes Trump’s thinking is correct.

“We need to look at problems in a practical, fact-based way, and we should not get trapped in ideological extremes on energy issues.” Zheng Yongnian emphasized that regardless of whether the ideological stance is left-leaning or right-leaning, completely denying traditional energy is not the right approach.

Zheng Yongnian also specifically mentioned the China–Iran 25-year strategic cooperation agreement. He said that many in the outside world believed China would be the first to bear the shock from fluctuations in the international energy landscape, but the facts have shown that China’s energy strategy is far more complex and more practical than outsiders imagine. “Some foreigners’ understanding of China is wrong. The path China is taking is far more comprehensive and more稳妥 than they think.”

In addition, Zheng Yongnian addressed the issue of how geopolitical tensions in the Middle East have led to large amounts of capital flowing into Hong Kong. He said that capital values certainty the most. Under the current international situation, Hong Kong has relatively more certainty, and thus it attracts the concentration of international capital including from the Middle East. But if capital exists only in the form of “hot money,” without a real-economy base, then despite being highly liquid it will have poor stability, which poses challenges to Hong Kong.

He believes that Hong Kong should broaden its horizon, form a linkage with Hainan Free Trade Port, and take on the landing of part of the capital. In terms of its positioning as a financial center, Shanghai mainly serves the real economy and financial stability, while Hong Kong can benchmark London and New York to develop a venture capital function, making up for shortcomings in the mainland’s institutional and policy mechanisms. Relying on historical experience, Hong Kong can guide foreign capital into patient capital that supports innovative real-economy entities.

Capital can only stabilize when it is implemented in the real economy. Zheng Yongnian said that industries around the fourth industrial revolution—such as innovative pharmaceuticals and artificial intelligence—have broad room for implementation in the Greater Bay Area, Hainan, and Hong Kong. Hong Kong should strengthen cooperation with the mainland, and actively develop new industries, such as the yacht industry with huge potential.

He also mentioned how to expand domestic demand. He believes that expanding domestic demand cannot rely on directly handing out money or expanding welfare. The fundamental way out lies in developing. He said that the current issue is not whether people should consume, but what they should consume. The middle-income group, which accounts for 30% of the population, is not lacking consumption capacity; rather, it lacks new areas for consumption. Meanwhile, the other 70% of people who have just escaped poverty do not have sufficient consumption capacity, and their consumption must be fueled by developing the economy to increase incomes, thereby releasing consumption. He proposed that this can be approached from two aspects:

First, appropriately loosen regulation and develop incremental (added) economic activity. For example, developing the yacht economy can bring innovative products such as innovative pharmaceuticals, gaming products, and artificial intelligence into the market. By creating incremental economic activity, not only can it meet the new consumption needs of the middle-income group, but it can also bring more lower-income groups step by step into the ranks of the middle-income group—this is a feasible path to boost consumption.

Second, promote enterprises’ overseas expansion. Zheng Yongnian pointed out that Chinese companies have entered a new stage of globalization and internationalization. Issues concerning overseas expansion and the protection of overseas interests should be put on the agenda.