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China's economy turns out to be vulnerable in
dealing with challenges posed by soaring international oil price
fluctuating around US60 per barrel.
According to Zhang Guobao, vice minister of
the National Development and Reform Commission, the best ways to cope are
by improving energy efficiency and developing alternative energy
resources.
China consumed much more energy resources
than Japan in producing one unit of GDP.
Experts estimate that if it could use energy
as efficiently as Japan, China would not have to increase its energy
demand in the next 60 years.
Chen Mian, professor of the prestigious
University of Petroleum, said that depending on the market force, energy
efficiency can only be improved by 20 percent.
So the government should take the crucial
leading role in improving energy efficiency by taking a series of policies
in production, consumption and technologies to ensure energy will be used
efficiently by both producers and consumers, he said.
Ethanol gasoline, coal-liquefied oil and
methanol gasoline are all alternative choices under experimentation in
China. However, owing to the lack of financial, taxation or subsidy
supporting polices, those new energy resources could not get accepted
widely in the country.
Experts said a monopoly system in the
petroleum market constitutes the fundamental reason preventing China from
improving its capability in meeting challenges from soaring oil price.
According to the China Chamber of Commerce
for Petroleum Industry, being held by several large state-owned petroleum
corporations, the market does not leave space for competitors.
With the maturation of China's capital
market, an increasing number of entities have the ability to invest in oil
exploitation and development. In northern Shaanxi Province, private
petroleum companies have raised the annual oil output from less than
800,000tons to nearly 7 million tons in ten years.
Nevertheless, incapable of obtaining the
mining competency, those small and medium-sized private enterprises have
to enter the sector as joint ventures and find it is hard for them to
develop.
Moreover, lacking the effective supervision
and management, those enterprises also have such weaknesses as
indiscriminate mining.
According to China's commitments to the World
Trade Organization (WTO), China will open its oil products market to
foreign capital at the end of 2006.
Without forming a real market, China,
however, will always find itself in a passive role in regional
cooperation.
Under the current system, the three major
petroleum corporations, namely, the China National Petroleum Corporation,
the China National Petrochemical Corporation and the China National
Offshore Oil Corporation, do not share their geological materials, which
has caused a large amount of waste and repetition.
China has begun to learn from the experiences
of other countries in their petroleum industrial system and is trying hard
to reform. | 
