Since 1980, China's economy quintupled. This growth brought about considerable welfare gains for the population. However, this also lead to challenges for China's energy security (e.g. increasing oil-imports) and severe regional environmental problems (e.g. SO2- emissions and acid rain). Thus, the environment is gaining an increasing role on the political agenda and environmental considerations are likely to play a much more important role in China's future energy security policy. Until 2020, GDP and energy consumption will further increase. Taking this into account, future Chinese energy security strategy constitutes an inter-temporal welfare optimisation problem under domestic resources availability and environmental constraints. In this study, a dynamic inter-temporal optimisation model of energy resources consumption and SO2-emissions is build up and taken as a yardstick for the efficiency of different energy security policy measures. As a result, optimal control theory gives a normative answer to the question how the utilisation of the fossil resources and the environment has to be chosen to maximise inter-temporal welfare in China.