China economic focus April 2026: navigating the energy crisis

As the closure of the Strait of Hormuz continues in April, 55% of China’s crude oil imports and 30% of the country’s LNG imports are at risk. In the April 2026 China economic focus, we discuss how the energy crisis will impact the Chinese economy and what reactions the Chinese government will have. •The Chinese economy experienced limited turbulence in the first two months of the energy crisis sparked by the Iran war. Crude oil reserves, gas-to-coal switching in power generation and retail fuel subsidies have helped cushion the immediate impact of the energy shock. •The negative impact on growth will surface over time. Exports to the Middle East will contract sharply, coastal provinces may see power shortages during the summer months and domestic inflation will rise gradually. •With the Strait of Hormuz remaining closed, the government will be left with fewer policy choices.