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China's dependence on imported oil increases

By Du Xiaoli (chinadaily.com.cn)
Updated: 2007-06-22 14:03

China's crude oil dependency will soon exceed 50 percent, said Dai Yande, deputy director-general of the Energy Research Institute of the National Development and Reform Commission. In his opinion, this won't have great impact on the international oil price.

"China's demand for oil is expanding steadily and it is an inevitable trend for oil dependency to exceed 50 percent," said Dai, adding that the increased oil imports may last for a long time due to China's rapidly growing economy.

In May, China imported 12.97 million tons of crude oil, which was less than the 13.86 million tons in March, and 14.82 million tons in April. The country exported 520,000 tons of oil last month, and the net imported amount of crude oil in May was 12.45 million tons. China's crude oil dependency reached 48 percent in April.

From January to May, China imported 67.43 million tons of crude oil, up 9.6 percent year-on-year. Meanwhile, it exported 1.6 million tons, down 36.6 percent. China's total oil consumption reached 320 million tons last year and around 150 million tons were from imports. Experts predict China's crude oil imports will increase to over 160 million tons this year.

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Growth of domestic oil output can't meet rising demand. China became a net importer of oil 10 years ago and became the world's second largest oil consumer in 2002 following the United States, Dai said.

It is predicted that China's oil dependency will reach 50 percent by 2010 and around 60 percent by 2020, according to the Energy Development Report of China 2007 published by the Social Sciences Academic Press under the Chinese Academy of Social Sciences.

In Dai's opinion, people shouldn't be fussy about where China gets its oil from, despite its crude oil dependency reaching 60 percent to 70 percent. "China's oil output is insufficient and it's not a bad thing to use foreign resources to support China's economic development," he said.

"Furthermore, there is no question that this will promote the development of the world's economy, especially in oil producing countries," he added. "Oil imports to the United States reached 60 percent a long time ago and most Japan's oil depends on imports."

China is accelerating its oil strategic reserve as crude oil imports continue to climb. Key measures to optimize China's energy structure, reduce environmental pollution and achieve a sustainable development should be the development of new energy and renewable energy, said experts.

The increased oil dependency leads to a focus on China's energy safety problem, Dai said. The average annual growth rate of China's energy consumption approached 10 percent in recent years. So China must accelerate development of new and renewable energy.

"The country's policy will focus on new energy development this year," said Dai. The Chinese government is taking many measures to speed up the development of new energy and sustainable economy.