Page 190 - 2017 White Paper
P. 190
7 White Paper on the Business Environment in China
in 2015, according to the National Energy Administration percent is a globally recognized energy security alert level”
(China Daily 2010b). (Wang 2010).
Despite international fashion, China’s use of biofuels By May of that year, an article in the same publication
can be expected to be much more sparing than other more casually reported Sinopec officials stating that “The
nations, as China’s arable land and food supply demands country may have to rely on imports to meet as much as 70
leave little surplus to—literally—burn. percent of its crude oil needs in the next decade”, although
no mention was made of energy security risks (China Daily
“Chinese agricultural products will continue to increase 2010a).
yields and efficiency, but the lack of water and arable
land will limit China’s future in grain output”, said Wang Over the course of 2010, the nation reportedly
Xiaohui of the China Grains and Oils Information Center, consumed 440 million tons of oil, 200 million tons of which
a government think tank. “With a rising population and were imported (Wang and Li 2011).
increased standard of living we must ask who will feed
Chinese people in the future” (Hochard 2009). “Some analysts expect China to overtake the United
States as the world’s biggest crude oil importer as soon as
It is been noted that due to these pressures, China’s 2017” (Reuters 2013a).
adoption of biofuels will be contingent on so-called
“second generation”products which are derived from non- Similarly, it was reported that “China bought 42.5
grain sources such as cellulose (Hochard 2009). Accordingly, billion cubic meters (bcm) of gas from overseas [in 2012].
the Ministry of Finance and the State Administration of That was up more than 30 percent compared with 2011
Taxation co-issued the “Circular to Clarify the Application and a nearly 10-fold increase from 2007” (Reuters 2013a).
Scope of Consumption Tax Exemption for Pure Biodiesel
Made from Waste Animal and Plant Oils” (Caishui [2011] As part of an effort to blunt that reliance on foreign
No. 46), which is expected to both incentivize legitimate sources and increase domestic capacity, the government
biodiesel production while also preventing the illegal announced in September 2013 that it was set to have
‘recycling’ of restaurant waste oil: in 2010 it was reported invested “80 billion yuan ($13.07 billion) in oil and gas
that two to three million tons of swill-cooked dirty oil were exploration [over the course of the year]” (Reuters 2013a).
returned to dining tables every year in the PRC, seriously
threatening the country’s food safety and public health Historically, total investment in the sector was reported
(China Briefing 2011b). by Xinhua to have “risen from 19 billion yuan in 2002 to
67.3 billion yuan in 2011” (Reuters 2013a).
Oil’s importance to China’s development and the
inevitable increase in fuel consumption as more consumer Li Shousheng, Vice-Chairman of the China Petroleum
purchase in automobiles remains a far more immediate and Chemical Industry Federation warns that “China’s
concern than biofuels. According to Xinhua, the PRC strategic petroleum reserve is a key to addressing the
ranked fifth among oil producing nations as of 2008 issues of the national economy and energy sufficiency
(Xinhua 2008a), and remains the world’s second-largest oil during the 12th Five-Year Plan period. There is a huge
consumer (Energy Information Administration 2010). gap between the supply and demand for energy. Energy
shortage could become a very prominent problem if an
As of December 2008, the building of the second phase emergency occurs” (Wang and Li 2011).
of China’s strategic oil reserves (rumored to hold up to
approximately 170 million barrels, but still dwarfed by the More recently, China Petrochemical Corporation
U.S. Strategic Petroleum Reserve, with its capacity of 700 Chairman Fu Chengyu warned that “China must embrace
million barrels of crude oil) was confirmed (Bai 2008). domestic resources besides oil, such as coal, in a bid to
curtail rising crude imports, which hit about 254 million
The importance of this strategic reserve is highlighted tons in 2011, up 6% from a year earlier” (Spegele 2012).
by the PRC’s heavy reliance on imports for consumption:
a January 2010 article in China Daily noted that “Imported According to Mr. Fu, “China [will] require 600 million
crude oil accounted for 52 percent of the country’s total oil tons of crude annually by 2020” if demand continues at its
consumption last year”, and that “Importing more than 50
190
in 2015, according to the National Energy Administration percent is a globally recognized energy security alert level”
(China Daily 2010b). (Wang 2010).
Despite international fashion, China’s use of biofuels By May of that year, an article in the same publication
can be expected to be much more sparing than other more casually reported Sinopec officials stating that “The
nations, as China’s arable land and food supply demands country may have to rely on imports to meet as much as 70
leave little surplus to—literally—burn. percent of its crude oil needs in the next decade”, although
no mention was made of energy security risks (China Daily
“Chinese agricultural products will continue to increase 2010a).
yields and efficiency, but the lack of water and arable
land will limit China’s future in grain output”, said Wang Over the course of 2010, the nation reportedly
Xiaohui of the China Grains and Oils Information Center, consumed 440 million tons of oil, 200 million tons of which
a government think tank. “With a rising population and were imported (Wang and Li 2011).
increased standard of living we must ask who will feed
Chinese people in the future” (Hochard 2009). “Some analysts expect China to overtake the United
States as the world’s biggest crude oil importer as soon as
It is been noted that due to these pressures, China’s 2017” (Reuters 2013a).
adoption of biofuels will be contingent on so-called
“second generation”products which are derived from non- Similarly, it was reported that “China bought 42.5
grain sources such as cellulose (Hochard 2009). Accordingly, billion cubic meters (bcm) of gas from overseas [in 2012].
the Ministry of Finance and the State Administration of That was up more than 30 percent compared with 2011
Taxation co-issued the “Circular to Clarify the Application and a nearly 10-fold increase from 2007” (Reuters 2013a).
Scope of Consumption Tax Exemption for Pure Biodiesel
Made from Waste Animal and Plant Oils” (Caishui [2011] As part of an effort to blunt that reliance on foreign
No. 46), which is expected to both incentivize legitimate sources and increase domestic capacity, the government
biodiesel production while also preventing the illegal announced in September 2013 that it was set to have
‘recycling’ of restaurant waste oil: in 2010 it was reported invested “80 billion yuan ($13.07 billion) in oil and gas
that two to three million tons of swill-cooked dirty oil were exploration [over the course of the year]” (Reuters 2013a).
returned to dining tables every year in the PRC, seriously
threatening the country’s food safety and public health Historically, total investment in the sector was reported
(China Briefing 2011b). by Xinhua to have “risen from 19 billion yuan in 2002 to
67.3 billion yuan in 2011” (Reuters 2013a).
Oil’s importance to China’s development and the
inevitable increase in fuel consumption as more consumer Li Shousheng, Vice-Chairman of the China Petroleum
purchase in automobiles remains a far more immediate and Chemical Industry Federation warns that “China’s
concern than biofuels. According to Xinhua, the PRC strategic petroleum reserve is a key to addressing the
ranked fifth among oil producing nations as of 2008 issues of the national economy and energy sufficiency
(Xinhua 2008a), and remains the world’s second-largest oil during the 12th Five-Year Plan period. There is a huge
consumer (Energy Information Administration 2010). gap between the supply and demand for energy. Energy
shortage could become a very prominent problem if an
As of December 2008, the building of the second phase emergency occurs” (Wang and Li 2011).
of China’s strategic oil reserves (rumored to hold up to
approximately 170 million barrels, but still dwarfed by the More recently, China Petrochemical Corporation
U.S. Strategic Petroleum Reserve, with its capacity of 700 Chairman Fu Chengyu warned that “China must embrace
million barrels of crude oil) was confirmed (Bai 2008). domestic resources besides oil, such as coal, in a bid to
curtail rising crude imports, which hit about 254 million
The importance of this strategic reserve is highlighted tons in 2011, up 6% from a year earlier” (Spegele 2012).
by the PRC’s heavy reliance on imports for consumption:
a January 2010 article in China Daily noted that “Imported According to Mr. Fu, “China [will] require 600 million
crude oil accounted for 52 percent of the country’s total oil tons of crude annually by 2020” if demand continues at its
consumption last year”, and that “Importing more than 50
190
