China's foreign exchange reserves, the largest in the world, fell more than expected in September, with the dollar regaining strength, Chinese central bank data showed on Wednesday.
Reserves reached $3.400 trillion last month, compared to $3.438 trillion the previous month, and less than economists’ expectations of $3.420 trillion, according to a Reuters poll.
During September, the yuan rose 0.22 percent against the dollar, while the dollar rose 2.06 percent against a basket of major currencies.
Hong Kong shares decline
Hong Kong stocks fell on Wednesday, tracking broader weakness in Asian markets, with oil prices rising, while major internet companies and biotechnology companies led the decline.
The Hang Seng Index in Hong Kong fell 0.5 percent by the noon trading break.
The Hang Seng Index of Chinese companies fell 0.7 percent, while the Hang Seng Technology Index fell 0.9 percent.
“Chinese markets remained weak despite policy support, as weak consumer demand and mixed industrial data offset selective interest in the technology sector,” Basil Khatoon, head of research at Templeton Global Investments, said in a note.
Chinese technology companies listed in Hong Kong were exposed to selling pressure.
Shares of Mini Max, which specializes in developing artificial intelligence, and the giant technology company Alibaba, fell by 5 percent and 3 percent, respectively.
Shares of biotechnology companies fell 2.7 percent, after rising in the previous session.
The slowdown in economic activity pushed the Standard & Poor's Purchasing Managers' Index in Hong Kong to fall 0.3 points to 49.2 in September, further weakening market sentiment.
The index fell below the 50 level that separates contraction from expansion for the second month in a row.
It is noteworthy that local Chinese financial markets are closed during the period from October 1 to October 7, on the occasion of the National Day holiday, and trading will resume on October 8.
The recent disruptions in oil trade have demonstrated the importance of multiple access routes to markets and infrastructure capable of absorbing shocks, at a time when geopolitical risks and bottlenecks facing the global energy system are increasing.
This was confirmed by the Secretary-General and CEO of the World Energy Council, Angela Wilkinson, in an exclusive interview with Asharq Al-Awsat, days before her participation in Energy Week in Riyadh, explaining that the system’s ability to deal with disturbances is not related to the volume of production alone, but also to the infrastructure, transportation networks, and relations between producers and consumers.
The activities of “Riyadh Energy Week,” which hosts the 25th session of the World Energy Conference, will begin in Riyadh, Sunday, for the first time in Saudi Arabia, with the participation of more than 70 ministers, more than 300 CEOs of major international energy companies, and leaders of more than 25 international organizations.
The conference, which is held under the slogan “Paths to an Energy Future for All,” includes more than 30 ministerial, strategic and leadership sessions, covering energy security, global oil and gas markets, investment and finance, artificial intelligence and digital transformation, critical minerals, carbon management, natural gas, and the future of the energy mix.
Hormuz tests the flexibility of the energy system
Wilkinson believes that energy “underlies every aspect of life in the modern world,” and therefore the global priority is to reduce the escalation in the regional conflict that leads to a crisis in the global energy and economy. She said that energy sector leaders today are working in a new geopolitical context, while communities in different regions face multiple shocks and bottlenecks extending from transportation and refining routes to liquefied natural gas, electricity networks, and critical minerals.
She explained that the trade-offs between energy security, equitable access and affordability, and environmental sustainability have not disappeared, but they have changed and become more acute, which makes rebalancing them in real time essential for achieving sustainable progress. This was based on the results of the “Global Energy Trilemma 2026” report, which was prepared by the Council after dialogues with more than 275 energy sector leaders in 65 countries.
She added that the longer-term impact of the crisis, whatever its duration, may be how sector leaders cooperate to enhance resilience, integration and operational compatibility, and build systems capable of absorbing today’s disruptions and better preparing for future shocks and transformational opportunities.
Saudi Arabia and multiple access paths
Wilkinson said that Saudi production capacity and alternative export infrastructure play an important role in global energy markets, especially when existing paths are exposed to disruption. She explained that recent developments have shown that “there is no single path that eliminates all risks,” and that energy security depends on a strong infrastructure, multiple paths to access markets, and greater cooperation between producers and consumers.
She added that the flexibility of the energy system in the Gulf region cannot be measured only by the amount of energy that the region can produce, but also depends on its ability to transfer that energy reliably through ports, pipelines, electricity networks, and international markets.
She pointed to investments in new infrastructure, strengthening networks, and increasing diversity of partnerships as factors that increase the options available to the system. She summarized the concept of flexibility as “building a degree of choice within the system,” through diversification of energy sources, multiple paths to market access, strong infrastructure, and strong international relations.
From supplies to “capabilities”
Wilkinson does not believe that the crisis changes the need to balance energy security, equity and affordability, and environmental sustainability. But she explained that what is changing, sometimes very quickly, is where pressures are increasing and new bottlenecks are emerging.
She said that the trade-offs managed by energy sector leaders have moved with geopolitics, technological innovation, the effects of climate change, increasing demand activity and industrial competitiveness to new parts and locations of the global energy system.
She believes that the biggest transformation may be the transition from a world in which the energy system was organized around supplies to a world that is increasingly moving toward organizing around “capabilities.” The Council is responding to this shift by developing the “global energy trilemma” from a measurement framework into a leadership dialogue that addresses systems integration and resilience, energy security, and industrial competitiveness.
She emphasizes that integration is not limited to a technical challenge related to setting standards, but is also related to the institutional, financial and human capabilities necessary to make the components of the energy system work together efficiently.
Geopolitics and new dependencies
Wilkinson expects that over the next five to ten years the importance of geopolitics in decisions related to interdependence in the energy sector will increase. Electricity, artificial intelligence, new technologies and growing demand will remain important factors, but they are evolving in a more fragmented and competitive world.
She explained that countries are discovering that reducing a certain dependence may lead to the emergence of another dependence, whether on critical minerals, technologies, manufacturing capabilities, or infrastructure.
She believes that how leaders manage these interconnected dependencies, and bridge the growing capacity gaps, will contribute to shaping the energy system over the next decade.
A “super cycle” of electrification
As demand for electricity accelerates, Wilkinson believes that the biggest constraint on the electrification “supercycle” is not a specific technology, policy or infrastructure, but rather the ability to make the entire energy system operate efficiently.
She explained that this requires generation, electricity networks, storage, and investment, while expanding each of these elements leads to the emergence of new dependencies on supply chains, critical minerals, aging infrastructure, and a skilled workforce.
She stressed that the dissemination of energy technologies remains necessary, but making these technologies work together represents an increasing challenge and requires new capabilities.
There is no single universal path to transformation
Wilkinson rejects the idea that there is a single global path for transformation in the energy sector, explaining that there are multiple paths and transformations that are shaped according to resources, infrastructure, and different economic and social needs.
The work of the Global Energy Trilemma shows that sector leaders are having to rebalance energy security, equity, affordability, and environmental sustainability more frequently and dynamically.
She said that the challenge is to push these multiple priorities together, because neglecting any of them may create weaknesses in another aspect of the system. The question is not whether the transition should be faster or slower, but rather how it can be phased in to build reliable, affordable and sustainable energy services capable of meeting the growing demand for clean electricity and future fuels.
Between sovereignty and independence
Wilkinson believes that one of the risks that may not be sufficiently appreciated until 2030 is the confusion between “energy sovereignty” and “energy independence,” or the assumption that demand will remain predictable and passive, while becoming more active and influential in shaping the energy system.
She said that modern energy systems are inherently based on interdependence. A country may reduce its dependence on fuel imports, but in return, it increases its dependence on critical minerals and technologies needed to build clean energy systems.
Therefore, energy security does not simply mean moving all elements of the system within national borders, but rather understanding and managing interdependencies. As the global energy system grows, this also requires looking beyond generation capabilities, to include the flexibility of electricity networks, stations, supply chains, and the links between them.
