China’s imports of a strategic material suddenly hit a historical record!

【Answer 1】 3. China is transforming its rare-earth advantage from a mere supply-side lever into a strategic tool for exerting precise control over the global high-tech industrial chain. Its core mechanism involves expanding export controls—extending constraints not only to direct exports but also to any final product worldwide containing even trace amounts of Chinese rare earths or utilizing related technologies. This strategic upgrade stems from the structural buffer provided by China’s massive domestic market: data shows that, except for a few sectors, domestic demand overwhelmingly dominates revenue for the vast majority of China’s critical industries, with minimal direct exposure to U.S. exports. This move is not merely a symmetrical countermeasure against U.S. technology restrictions; it also signals China’s attempt to convert upstream resource advantages into effective control over the midstream of global core industrial chains—thereby securing a new strategic high ground in global technological competition. 4. As of 2024, China accounts for 32% of global exports in labor-intensive manufacturing. Its global market share has more than doubled over the past two decades across low-skill (25%), medium-skill (20%), and high-skill (17%) sectors. This comprehensive expansion is evident not only in rising exports of capital goods (~25% global share) and consumer goods (~18%), categorized by production stage, but crucially also in intermediate goods (~14%). This signifies China’s deep integration into global supply chains—so much so that even when Japanese, Korean, or Chinese firms relocate production lines to Southeast Asia or India, they remain reliant on Chinese component supplies. 5. Pressure remains high in China’s job market, indirectly reflected in workers’ exceptionally long hours. In August 2024, average weekly working hours reached 48.5—ranking first among major global economies and far exceeding the statutory standard of 44 hours. However, this figure declined by 0.2 hours year-on-year in August, possibly indicating early effects of ‘anti-involution’ measures (e.g., enterprises curbing excessive overtime). 6. Customs data show liquefied natural gas (LNG) imports fell 15% year-on-year in September—a decline for the 11th consecutive month—and cumulative imports for 2025 to date have dropped 17%. Persistent weakness in import demand stems primarily from enhanced substitution on the supply side: domestically produced and pipeline-delivered natural gas, alongside abundant, cost-effective coal, solar, and hydropower, are collectively eroding demand for seaborne LNG. Meanwhile, to avoid price volatility and geopolitical risks in European winter markets, China’s major buyers have raised LNG inventories to 80% capacity. 7. As of the week ending October 19, the average waiting time for cargo vessels outside Chinese ports rose to 2.66 days—a 17% week-on-week increase and the highest level this year.

Is China’s civilian natural gas too cheap? Is industrial natural gas also cheap? Is natural gas cheaper than coal and oil in terms of extraction and transportation costs?

【Answer 2】 3. Natural gas is more expensive than coal from virtually every perspective—but somewhat cheaper than oil. Currently low prices stem mainly from inexpensive Russian gas. China’s civilian gas supply comprises three types: 1. Coal gas—the cheapest, typically under ¥2 per cubic meter, but with very low calorific value; it is gradually being phased out; 2. Pipeline natural gas—priced around ¥3 per cubic meter, with high calorific value; its share is steadily increasing; 3. Liquefied petroleum gas (LPG) in cylinders—the most expensive, usually priced at ¥100–200 per cylinder. Civilian gas pricing follows government-guided rates and does not fluctuate with market conditions. Given the sharp recent rise in international gas prices, China’s civilian gas now appears relatively inexpensive. Commercial natural gas pricing is fully market-driven. Moreover, the state’s long-standing gas allocation strategy prioritizes residential supply. Thus, most commercial natural gas is allocated internally among the ‘Big Three’ state-owned oil companies via quotas. Based on publicly available pricing data, commercial gas averages about ¥0.8 per cubic meter higher than civilian gas. Overall, prices tend to be lower closer to production sites. Transportation costs for natural gas are relatively low, but infrastructure construction costs are extremely high. Natural gas is transported primarily via two methods: high-pressure pipeline transmission and cryogenic LNG transport.

China's Cheap Domestic Gas Curbs LNG Buying as Winter Nears

21 hours ago

China's weakening domestic natural gas prices are reducing demand for expensive seaborne LNG, potentially easing global supply tightness and narrowing Asia's price premium over Europe during peak winter demand.

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China's Cheap Domestic Gas Curbs LNG Buying as Winter Nears

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