Foreign investment

The report in the Financial Times on Tuesday that the Chinese government is inviting international companies to directly involve themselves in its plans to develop shale gas could be of huge significance for the global energy market over the next decade and beyond.

China has huge shale deposits, perhaps double the US levels, and as yet zero production. Bold plans to produce 6.5bn cubic metres of shale gas by 2015 and 60bn by 2020 have generally been dismissed as fanciful given China’s limited technical base in shale and the challenges of infrastructure and water supply.

But never underestimate Beijing’s determination. The resistance to dependence on outside sources of supply is as strong as ever. Indigenous resources will be given priority and China is now rich enough to absorb the costs of bringing supplies from the north and west to the cities on the eastern seaboard. Read more