The international oil price has now leapt to a record breaking $70 per barrel from a comparatively paltry $29 back in 2003. Some blame China's huge energy demands for this price hike.
China defended these assumptions during the 7th Sino-US Petroleum and Gas Industrial Forum held in Hangzhou from September 10-12. Officials from the Chinese Government and business leaders from the oil companies argued that, in today's market, oil has become a major commodity for international speculators chasing a fast profit. China is not the cause for the spike in price they chorused.
As the world's second largest energy consumer and the third largest oil importer, China has seen rapid economic growth for three consecutive years, above 10 percent year on year. However, its imports merely account for 6 percent of the world total, much less than that of the United States and Japan. This means China is not a big influence on the floating world oil price. Statistics show us the facts that in 2005, China used 317 million tons of oil, showing a net import of 136 million tons, less than the previous year.
If China is the main reason for the soaring oil price, China's declining imports would cause a drop in the price and not an increase, said Zhang Guobao, Vice Minister of China's National Development and Reform Commission, the top economic planning body.
China's per-capita gas and petroleum reserves is only 7 percent of the world average, meaning it relies on 40 percent of oil imports. On the other end of the scale, China is rich in coal resources, making it the world's second largest energy producer and the top coal and coke exporter. In the future energy development plan, China will adopt an energy strategy of diversification based mainly on coal.
"Hampered by increasing oil prices, China is exploring its coal resources to safeguard energy supply. Meanwhile, China's developing new resources, renewable resources, substitutes for petroleum, and optimizing its energy producing and consuming structure. At present, it has shown some effect," said Zhang Guobao.
Ultimately, the price hike is harmful for the world economy. At the forum, both sides agreed to strengthen Sino-US cooperation to stabilize the world oil market.