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Last Updated: May 8, 2008 - 10:17:56 AM |
China has changed from a net oil exporter to a net oil importer. In recent
years, 40 to 50 percent of the oil that China consumes is imported. Of that 60
percent comes from the Middle East. Saudi Arabia, Iran, Qatar and Sudan are the
main suppliers.
Therefore China has a significant interest in the Middle East, and any changes
in the situation there will affect China's energy security. It is only natural
for energy factors to play a role in China's policy toward the Middle East.
Although China's opposition to the Iraq war and to the use of force to resolve
the Iranian nuclear issue is not purely based on considerations of energy
security, this is a key factor. In a word, energy diplomacy constitutes an
important part of China's diplomacy.
Similarly, energy security is also regarded as a strategically significant part
of China's national security. China's energy security strategy comprises a
number of requirements, of which the first is to increase domestic oil
production. At the end of March last year, China announced that a new oil field
with an estimated reserve of 2200 million barrels had been found in Bohai Bay.
The daily output of this field is expected to reach 200,000 barrels in three
years. At present, the oil yielded in China satisfies about 50 percent of
domestic need; in future, China's oil self-sufficiency rate should remain no
lower than the present level.
A second requirement is to restructure the energy mix. From now on, China will
give priority to the development and exploitation of coal, wind power, water
energy and bio-energy.
Third, China must establish a national system of energy reserves. China's
current oil reserve mainly depends on the business reserves of three
government-owned oil companies, China Petrochemical Corporation, China National
Petroleum Corporation and China National Offshore Oil Corporation. Their
reserve capacity is equal to only 21 days' consumption of the entire country.
Added to the newly-established national energy reserve bases, the total reserve
capacity in China can meet only 30 days' consumption needs. The petroleum
reserve capacity of China is only one-sixth that of Japan, one-fifth of the
United States, one-fourth of Germany and one-third of France. Thus, in this
field China still has a lot of work to do.
Fourth, China needs to conserve energy more efficiently. According to the
International Energy Agency, the energy consumption per unit GDP in China is as
high as nine times that in Japan, 5.6 times that of the European Union, 3.3
times that in the US and 2.7 times that in Korea. So there is much room for
China to develop energy conservation.
Finally, China needs to explore overseas energy resources so as to realize the
multi-model approach to petroleum supplies.
In recent years, oil prices have been rising steadily. This is the product of a
number of factors such as the growth of the world economy, a decline in oil
production, a reduction of oil reserves, the devaluation of the US dollar, the
impact of geopolitics and unexpected events and speculating in oil trading.
Another factor worthy of mention is that the economy is developing very fast in
some major petroleum-exporting countries, such as Indonesia, Mexico and Russia.
In these countries, increased domestic energy consumption results in a decrease
in exports. Some petroleum-exporting countries provide their citizens with
plentiful gasoline allowances and offer prices as low as seven cents per
gallon. Such policies unfortunately foster waste. The consumption per capita in
some Middle Eastern petroleum-exporting countries has even exceeded that of the
US.
Another phenomenon that merits keen attention is that in the current round of
oil price rises, one power has taken no measures to control the price of oil as
before but rather has added fuel to the fire and is enjoying the financial
result. Some critics assume that the short-term strategic energy target of this
power is to raise the oil price rapidly in order to strike at China's economy,
lure China into capital outlays for overseas petroleum industries and then
suppress the oil price to create a dilemma for China's economy.
It is unfair to ascribe the increase in oil prices to the economic rise of
China. China's oil imports account for only six percent of the total volume of
oil trade in the world. China's oil consumption is only eight percent of the
world total. Energy consumption per capita in China is only three-fourths of
the world average, one-fourth that of Japan and one-seventh that in the US. Yet
China to a large extent shares much of the burden of high oil prices insofar as
it has replaced the West as the world's factory and the prices of exported
goods from China remain the same as before the rise of oil prices. This means
that China is in effect granting a subsidy to consumers of goods made in China
all over the world.
Although the multi-model approach to petroleum resources is one of the key aims
of China's energy strategy, China is likely to depend even more on oil imports
from the Middle East in the coming years. According to the Institute for the
Analysis of Global Security in Washington, 70 percent of China's imported
petroleum will come from the Middle East by 2015. Therefore, it will remain the
basic posture of China's diplomacy for a long time to come to pay more
attention to the development of the situation in the Middle East, to be more
concerned with Middle East affairs and to establish closer relations with
Middle East countries.
Source:Ocnus.net 2008
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