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Foreign trade affects domestic energy demand, and developed countries are reliant on developing countries for resources, and increasingly goods and services, in a globalised economy. Oil and coal exports embodied in the production of finished products bound for foreign shores—the "Made in China" phenomena—is the big story. In 1987, it appeared that China's foreign trade was finely balanced, but then the proportion of net exports increases rapidly. From both domestic and global perspectives, China's increasing demand for coal, and the subsequent imports that demand sucks in, will pose significant problems. Additional pressure will be brought to bear on domestic energy security, creating greater competition and uncertainty in global coal markets. China's coal consumption intensity has increased considerably, helping China reduce embodied coal exports to some extent. China also exports a lot of embodied resources, including oil products, to reduce the economic development costs of other countries.

China’s current national policies promote high levels of economic growth, transforming China into a “world factory”, but at a high cost in terms of energy and the environment. At the same time, this growth and transformation also forms the backbone of China’s economy, underpinning social stability. China faces a dilemma to reconcile its economy, energy system and environmental security. Each aspect of this triad is discussed in this study to illuminate the challenges faced by China, and China’s dilemma in energy, economy and environment is analyzed from the perspective of its participation in current global supply chains. While China must import a significant proportion of its energy and a large proportion of primary materials, a large share of these imports are returned to the global market as industrial exports. China is bound by its own course of action and unable to radically change its position for the foreseeable future as the road to economic development and employment stability is through policies built on exports and shifting development models, presenting a tough socio-economic trade-off. China’s growth challenges are discussed as an example of challenges more broadly faced in the developing world. China’s success or failure in achieving a sustainable developmental pattern will inevitably have a significant influence on the global environment.