China Limits Fuel and Fertilizer Exports to Neighbors
China restricts fertilizer and fuel exports to prioritize domestic security. Regional neighbors face shortages as Beijing focuses on its own energy reserves.
As energy stress spreads across Southeast Asia, governments across the region are calling on China to fulfill its pledges of closer energy security cooperation by lifting bans on the export of fertilizer and fuel. Despite the rhetoric of the Belt and Road initiative, Beijing has focused on insulating its own economy from global shocks, including the ongoing war in Iran. Analysts suggest that China's commitment to its own growth targets currently outweighs its ambition to serve as a regional energy backstop.
The impact of these export restrictions is being felt acutely across the continent. Bangladesh recently requested that Beijing honor existing fuel contracts to mitigate domestic shortages. Similarly, diplomats from Thailand are engaging their Chinese counterparts to ensure that fertilizer shipments remain steady. In Malaysia, officials warned that the Chinese export ban would exacerbate fertilizer rationing, dealing a significant blow to the nation's oil palm industry, which is the second-largest globally.
Even the Philippines has sought assistance despite persistent territorial disputes in the South China Sea. Following a visit to the Chinese embassy in Manila, agricultural officials claimed that Beijing had agreed to maintain fertilizer supplies, though the official Chinese readout remained characteristically vague. Meanwhile, Australia, which sourced a third of its jet fuel from Chinese suppliers last year, has also entered discussions to secure future exports.
Industry experts believe that major producers, such as China XLX Fertiliser Ltd., will remain subject to state-mandated export controls as long as domestic demand is a priority. Eric Olander, co-founder of the China-Global South Project, expressed skepticism regarding any significant shift in policy.
"China may offer some ceremonial assistance, but its highly unlikely, if not wholly improbable, that it will share any substantive amount of its food, energy, or other reserves with other countries," said Eric Olander.
Strategic foresight appears to be the driving force behind Beijing's current stance. Since the early 2000s, Chinese policymakers have prioritized stockpiling resources, a move that now allows the country to maintain a sense of energy security while its neighbors struggle. Ruby Osman, a senior policy adviser at the Tony Blair Institute for Global Change, noted that Beijing is likely following a familiar pattern of imposing broad curbs and only selectively resuming trade.
"Beijing has no desire to be a regional energy backstop for an indefinite period of disruption," according to Ruby Osman.
The current situation highlights a transactional approach to regional diplomacy. Max Zenglein, a senior economist at the Conference Board Asia, suggested that support would only be forthcoming if China felt secure in its own domestic exposure.
"Only if China gets more comfortable with its own exposure, then I would expect meaningful support," said Max Zenglein.
The lack of alternative suppliers has left many nations with few options. Unlike previous crises where a regional rival like Japan might have stepped in to provide aid, there is currently no major donor filling the gap. This dynamic is reminiscent of the COVID-19 pandemic, when India was forced to halt vaccine exports to prioritize its own population during a surge in infections. Without external pressure or a shift in its own economic comfort, Beijing appears content to keep its energy lifeline firmly in its own hands.
