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The soaring international oil prices provoked by the imminent US
war on Iraq have put Chinese lawmakers and political advisors on
the alert to the security of oil supply in the country.
Some deputies now attending the annual sessions of the 10th
National People's Congress (NPC) and the 10th National Committee of
the Chinese People's Political Consultative Conference (CPPCC)
called for the building up of strategic oil reserves and the
seeking of alternative energy.
"If oil security is at stake, it will restrict China's rapid
economic development," said An Qiyuan, member of the 10th CPPCC
National Committee.
"It will take China 50 more years to accomplish modernization,"
said An, who is in charge of China's oil exploration. "Without
enough energy, modernization would have become an empty word."
It
was learned that crude oil futures jumped to nearly US$40 per
barrel last week on the New York Mercantile Exchange. Many
industries in China including aviation, automobile, toy and clothes
processing have been affected by the sharp rise of oil prices. Even
the ordinary Chinese citizens are feeling the pinch oil price
fluctuations in their daily life.
Statistics from the General Administration of Customs show that
China imported 69.41 million tons of crude oil in 2002, 15.2
percent more than in 2001 and nearly 60 percent of the imported oil
comes from the Middle East.
According to the speed of China's economic development and energy
consumption, especially the rapid growth of the number of private
cars, there will be bigger shortages in the oil supply.
China became an oil-importing country 10 years ago. Experts predict
that the oil demand in China will increase by 3-4 percent in 2003,
and the consumption of oil products will reach 125 million
tons.
An
Qiyuan suggested that oil reserve should be built to ensure oil
security so as to gain more leverage on international issues and
increase economic efficiency and competitiveness of China's energy
industry.
Huang Ligong, an NPC deputy and general manager of the Qinghai
Oilfield of the China National Petroleum Corporation (CNPC), said
that, "The possible war on Iraq will not have much impact on China
directly, because China doesn't import oil from Iraq."
What are the biggest deciding factors influencing oil prices are
big western powers and international capital, said Huang.
The fluctuations of oil prices once tested the bearing capacity of
China's economy. In 2000, when oil prices soared, China spent an
additional US$8 billion on importing more than 70 million tons of
crude oil.
It
is calculated that if the oil price rises US$10 per barrel and the
situation lasts for a year, it will chop 0.5 percentage points off
the annual growth of the world economy and 0.75 percentage points
off the annual growth of developing countries. If oil imports of a
country exceed 50 million tons, the international market price will
affect the economic operation of that country. If oil imports
exceed 100 million tons, it would become necessary to ensure oil
supply security by diplomatic, economic and military means.
Building up oil reserves is an effective means to steady supply and
demand, keep the prices stable, cope with breaking events and
ensure the security of the national economy. All large oil
consuming powers like the United States and Japan, and even some
developing countries as Brazil, South Africa and India, have built
their oil reserves, said An.
Building oil reserves is only part of the strategy to ensure oil
security, said Huang Ligong. It is also necessary for China to
diversify its sources of oil imports and encourage petroleum
enterprises to develop oil overseas.
In
addition, he said, China should set aside resource reserves such as
sealing up some oilfields with verified oil reserves.
Xia Honghui, another NPC deputy and general manager of the
Southwestern Oilfield of CNPC, said that China should further
adjust its energy structure to reduce dependence on oil and
continue to develop nuclear power and gasify and liquefy coal.
The proportion of nuclear energy in China's energy structure should
be raised from the current 1 percent to 4 percent by 2004, Huang
said.
Some experts proposed trading of oil futures so as to end, step by
step, the passive situation of accepting oil prices of the
world.
It
was learned that the Shanghai Oil Exchange would be restored under
the sponsorship of CNPC, Sinopec and CNOOC together with the
Shanghai municipal government.
(People's Daily March 10, 2003)
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