I'm expecting considerable disharmony in the Australia-China relationship. Coal industry analysts suggest that China will be calling for increased imports (overtaking Japan and South Korea)within the next few years. That will put Australia in the awkward position of posturing about climate change but in reality aggravating it. I'd suggest we either carbon tax coal exports or levy an equivalent tariff on finished goods imports. Vast as they are even Australia's coal reserves must deplete, then what? Both countries should steadily wean themselves off coal rather than face an abrupt crisis.

The same goes for iron ore, LNG, uranium and other finite resources. One day we will realise we have little to show for years of cheap imports, many of them frivolous or now consigned to landfill. I'd suggest the next PM devise a resource depletion protocol (and a serious climate change policy) so China knows where we stand.

Chinese energy policy has long pursued both supply and demand. There was actually a brief decline in gross energy supply from 1996 to 1999 due to strong demand-reduction policy; exceedingly rapid economic growth (thanks partly to the foreign-investment liberalisation provisions of China's accession to the WTO, and partly to the absurdly low international market price which oil reached in 1999, prompting partial deregulation of the internal Chinese oil market) has swept demand up again with it since, but the average energy intensity of Chinese industry has remained in decline, without demand management policy even having touched on transportation, and has a long way stlil to go.

Unfortunately the government's target does not aim to actually reduce energy use; merely to cut demand growth and double economic energy intensity by 2020. Perhaps soaring oil prices (and a consequent fall in demand for Chinese exports) will force a change in priorities in the coming years.

http://china.lbl.gov/publications/ee-policy-update.pdf
http://www.energybulletin.net/3566.html
http://www.iea.org/textbase/papers/2006/StandbyPowerChina19Sep06.pdf
http://www.oecd.org/dataoecd/58/28/36321399.pdf

China has the power of a strong central government to require all vehicle production to be emission free within 10 years. Implementing such a deadline could begin as soon as designs for advanced electric cars get approval by the Chinese leadership.

China is an excellent place to establish large scale electric car production, making car costs affordable. The benefits in terms of clean air and reduced oil consuption would be dramatic.

China is also well placed with its massive manufacturing base to produce wind turbines and solar cell farms for both domestic use and export markets to the world. Again, large scale production will make unit costs affordable to all countries.

By taking bold investment decisions in renewables now, China will not only address its own effective response to peak oil, but the Chinese will be regarded by many as amongst the word's best in sustainable development.

The wild card in the Rise and Rise of China may be climate change.
They may have just jumped on the band-wagon 50 years too late.
The band-wagon being the avaricious extraction of resources to be converted into unneeded consumer junk to fuel the money-go-round of modern capitalism.

A new ethos is developing and China could be left with being the Master of an obsolete game of last century.