Page 188 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
2.4 Resources and Industrial Material
Background controls and a broad effort to encourage domestic use of
natural gas. That includes building additional pipelines
The National Bureau of Statistics said China and shipping networks and pushing industry to run
consumed less energy per unit of GDP in the trucks, trains and ships on natural gas (Vanderkippe). The
first quarter of 2017, a decrease of 3.8 percent YoY. The biggest energy consumer on earth wants to use more of
decline was earlier than the target set by the government. the cleaner burning fuel in place of the coal that’s choking
China’s energy consumption per unit of GDP fell by 5 its skies and causing pollution. China has the ability
percent in 2016. China’s total energy consumption will to increase imports and is seeking to raise domestic
be capped at 5 billion metric tons of coal equivalent by production, but high prices risk overpowering demand
2020, according to a government plan for 2016 to 2020. growth and endangering the country’s determined
This will amount to a 15 percent reduction of energy use targets. The challenge is that producers, importers and
per unit of GDP by 2020 (Song, China Energy). China’s distributors in China need the government-controlled
energy structure continued to improve in the second prices to be high enough to make money. Cutting
quarter as the country consumed more clean energy them too much would hurt their margins, threatening
amid a government campaign for greener growth. investment in future production and the country’s
Meanwhile, U.S. exports of crude oil and liquefied natural energy security; however, the nation’s health is at risk if
gas have increased since China-U.S. 100-Day Action Plan the government is too generous to the industry. “It’s a
was signed, and several Chinese entities are reportedly in balancing act for the government that requires on one
negotiations with U.S. liquefied natural gas suppliers such side stimulating gas demand to increase the percentage
as Cheniere for signing long-term contracts, according to of clean fuels,” said Miaoru Huang, a Beijing-based
Dezan Shira & Associates. Although the trade deal did not energy analyst. “On the other hand, it needs to ensure
change any rules concerning U.S. liquefied natural gas reasonable returns for upstream players and transmission
exports to China, it appeared to give the green light to and distribution companies that are needed to ensure
Chinese state-owned enterprises like Unipec to sign long- sustained investment so China can maintain its growth in
term contracts with U.S. suppliers. China is projected to domestic gas production” (Vanderklippe).
be an almost US$30 billion liquefied natural gas market
by 2030 as the country shifts to cleaner energy sources. As the world’s sixth-biggest producer of gas, China
In 2016, China’s liquefied natural gas (LNG) imports grew gets about 64 percent of what it needs domestically.
by 35 percent (Koty). It imports the rest by pipelines from Central Asia and
Myanmar, as well as on seaborne tankers as liquefied
Natural Gas natural gas. Though consumption growth has been slow
for several years, in 2017 it increased to a rate of 13.2
A joint directive issued by 13 Chinese government percent. (Vanderklippe). The Chinese government’s goal
agencies in 2016 specifies that natural gas should rise in its current Five Year Energy Plan is to receive as much as
to roughly 10 percent of total national energy use by 10 percent of its energy from gas by 2020 and 15 percent
2020, and to 15 percent by 2030. Natural gas is currently by 2030. To achieve this, demand will have to grow by
just over 6 percent of the total energy mix. According about 15 percent a year through the rest of the decade,
to calculations by global resource consultancy Wood according to UBS Group AG.
Mackenzie, if China succeeds, it will raise its natural gas
demand from 210 billion cubic meters in 2016 to about Meanwhile, China National Petroleum announced that
360 billion in 2020, an increase in four years equivalent a new strategically important natural gas pipeline running
to its total demand growth in the past ten years. The from southern Kazakhstan to China began operating in
Chinese directive calls for strengthened Chinese pollution May 2017. China National Petroleum Corporation (CNPC)
188
2.4 Resources and Industrial Material
Background controls and a broad effort to encourage domestic use of
natural gas. That includes building additional pipelines
The National Bureau of Statistics said China and shipping networks and pushing industry to run
consumed less energy per unit of GDP in the trucks, trains and ships on natural gas (Vanderkippe). The
first quarter of 2017, a decrease of 3.8 percent YoY. The biggest energy consumer on earth wants to use more of
decline was earlier than the target set by the government. the cleaner burning fuel in place of the coal that’s choking
China’s energy consumption per unit of GDP fell by 5 its skies and causing pollution. China has the ability
percent in 2016. China’s total energy consumption will to increase imports and is seeking to raise domestic
be capped at 5 billion metric tons of coal equivalent by production, but high prices risk overpowering demand
2020, according to a government plan for 2016 to 2020. growth and endangering the country’s determined
This will amount to a 15 percent reduction of energy use targets. The challenge is that producers, importers and
per unit of GDP by 2020 (Song, China Energy). China’s distributors in China need the government-controlled
energy structure continued to improve in the second prices to be high enough to make money. Cutting
quarter as the country consumed more clean energy them too much would hurt their margins, threatening
amid a government campaign for greener growth. investment in future production and the country’s
Meanwhile, U.S. exports of crude oil and liquefied natural energy security; however, the nation’s health is at risk if
gas have increased since China-U.S. 100-Day Action Plan the government is too generous to the industry. “It’s a
was signed, and several Chinese entities are reportedly in balancing act for the government that requires on one
negotiations with U.S. liquefied natural gas suppliers such side stimulating gas demand to increase the percentage
as Cheniere for signing long-term contracts, according to of clean fuels,” said Miaoru Huang, a Beijing-based
Dezan Shira & Associates. Although the trade deal did not energy analyst. “On the other hand, it needs to ensure
change any rules concerning U.S. liquefied natural gas reasonable returns for upstream players and transmission
exports to China, it appeared to give the green light to and distribution companies that are needed to ensure
Chinese state-owned enterprises like Unipec to sign long- sustained investment so China can maintain its growth in
term contracts with U.S. suppliers. China is projected to domestic gas production” (Vanderklippe).
be an almost US$30 billion liquefied natural gas market
by 2030 as the country shifts to cleaner energy sources. As the world’s sixth-biggest producer of gas, China
In 2016, China’s liquefied natural gas (LNG) imports grew gets about 64 percent of what it needs domestically.
by 35 percent (Koty). It imports the rest by pipelines from Central Asia and
Myanmar, as well as on seaborne tankers as liquefied
Natural Gas natural gas. Though consumption growth has been slow
for several years, in 2017 it increased to a rate of 13.2
A joint directive issued by 13 Chinese government percent. (Vanderklippe). The Chinese government’s goal
agencies in 2016 specifies that natural gas should rise in its current Five Year Energy Plan is to receive as much as
to roughly 10 percent of total national energy use by 10 percent of its energy from gas by 2020 and 15 percent
2020, and to 15 percent by 2030. Natural gas is currently by 2030. To achieve this, demand will have to grow by
just over 6 percent of the total energy mix. According about 15 percent a year through the rest of the decade,
to calculations by global resource consultancy Wood according to UBS Group AG.
Mackenzie, if China succeeds, it will raise its natural gas
demand from 210 billion cubic meters in 2016 to about Meanwhile, China National Petroleum announced that
360 billion in 2020, an increase in four years equivalent a new strategically important natural gas pipeline running
to its total demand growth in the past ten years. The from southern Kazakhstan to China began operating in
Chinese directive calls for strengthened Chinese pollution May 2017. China National Petroleum Corporation (CNPC)
188
