China’s petroleum and chemical industry posted rapid growth in 2017, official data showed.
The sector’s profit amounted to 846.2 billion yuan ($121.7 billion) during the year, an increase of 51.9 percent year-on-year, according to the CNPC Economics and Development Research Institute.
Revenue of core businesses in the industry expanded 15.7 percent during the year, reaching 13.78 trillion yuan.
During the past 40 years of reform and opening-up, China’s petroleum industry has been participating in that process, in part by establishing a new management system and market operation mechanism with Chinese characteristics, said Qian Xingkun, Party chief of the CNPC Economics and Development Research Institute.
A number of petrochemical enterprises with global competitiveness have mushroomed, making crucial contributions to the national economic and social development, Qian said.
Through the establishment of the new market economic system, the market’s role is becoming more decisive in the allocation of resources and price fixing, according to Qian, and the improvements are mainly manifested as follows:
First, the pricing mechanism of the refined oil and natural gas, which has undergone a series of reforms, is becoming more sensitive to market performance.
In addition, a large number of enterprises in the sectors have established modern management systems. In 2017, China National Offshore Oil Corporation was restructured from a wholly State-owned enterprise into a company with limited liability, as did the China National Petroleum Corporation in the same year.
Through the restructuring of the company properties, those companies will gradually set up an efficiency-oriented and market-oriented operating system and become independent subjects to
face market requirements, Qian said.
The reform and opening-up also encouraged investment in the sector and enhanced the companies’ participation and competitiveness in the global market.
By the end of 2017, China’s petroleum enterprises were operating more than 200 projects in nearly 60 countries around the world.
The scale of oil and gas with CNPC overseas equity production hit 190 million metric tons in 2017. The annual scale of crude oil refining capacity reached 30 million tons.
In the same period, China imported more than 400 million tons of crude oil, becoming the largest crude oil importer in the world.
Chinese petroleum companies are also becoming pioneers in exploring those parts of the global market involved in the Belt and Road Initiative. The cooperation with the BRI countries and regions dates back to 20 years ago, Qian said.
The accumulated investment in those countries and regions has exceeded $200 billion in those years, covering the exploration of oil and gas fields, construction of high-end steel tunnels and complex pipelines on complicated land surface, as well as oil refining technology and equipment.
Thanks to the policies, the competitiveness of China’s petroleum enterprises has been greatly enhanced over the past decade, represented by the three major State-owned oil companies, Qian said.
According to the Forbes magazine, the market value of PetroChina reached $204.5 billion in 2017, ranking among the worldwide leading petroleum companies.
Thanks to the industrial upgrading, the productivity of China’s petroleum industry also achieved dramatic growth over the past 40 years, according to Qian.
From 1979 to 2017, crude oil production increased by more than 2 percent annually, significantly higher than the global average growth rate of 0.8 percent.
Crude oil production output in China increased 81 percent in 2017 compared with that in 1979, and China has become one of the top five largest oil producers in the world.
Natural gas production has also increased rapidly. From 1979 to 2017, its production increased by more than 6 percent annually, 2.2 times the global average growth rate in the same period.
A large number of new oil refining basements have been completed. And the crude oil processing capacity in China increased by 780 percent in 2017 compared with that in 1979.
In the past years, the spirit of competition has taken hold in China’s petroleum industry, inspiring its workers to brave difficulties and create miracle one after another, Qian said.
It is a significant step for China to elevate the supply capacity of oil and gas resources amid the increasing dependence upon imported crude oil, the rise of unilateralism around the world and the intensification of geopolitical turbulence. In order to ensure the domestic energy supply, it is very likely we will see the implementation of institutional reform and an increased degree of opening-up. The policy support for the oil and gas industry will be further stressed. In China, there are sufficient deposits of unconventional oil and gas resources. ... If a breakthrough can be made in their exploitation, the nation’s energy supply will undergo a major change. (Luo Zuoxian, a senior researcher at Sinopec Economics and Development Research Institute)
The global economy is undergoing a profound transformation. At the moment, the only way that leads to mutual benefit, shared prosperity and sustained development is opening-up. As the second largest economy in the world, China is making an effort to promote a higher level of opening-up, which is constructive to the recovery of the world economy, to solve the deep-seated structural problems and accelerate the upgrade of the driving force in the world economy, and inject new blood into its future development. As China has implemented the reform and opening-up policy for 40 years, the country has made remarkable achievements in establishing an open economy …We should pay more attention to the quality-oriented and innovative development instead of the quantity-oriented ones. (Quan Heng, deputy director of Shanghai Academy of Social Sciences)
Now, China has the potential and ability to bring investment to the entire world with its increasing development in overseas markets. China’s economy has changed significantly in the past 40 years, its market has become larger and more diverse and it has more business opportunities. Singapore has the advantages in finance and law, and could cooperate with China to develop the long-term investment projects in the third-party markets involved in the Belt and Road Initiative. To us, the development of Belt and Road Initiative to the south is the trade channel across land and sea and is an important connection to link China with the ASEAN economies. (Chan Chun sing, head of the Ministry of Trade and Industry in Singapore)
China has continued to deepen reform and opening-up and has reached great achievements with the leader of the Communist Party of China in the past 40 years. It is willing to share the benefits in its reform and opening-up with the world and shoulder its international responsibilities with the proposal of the Belt and Road Initiative. Its speed of development and achievement have exceeded my expectations and I’d bet China’s future will be brighter with the continuous reform and opening-up. (Syed Hasan Javed, director of the Chinese studies center of the National University of Sciences and Technology in Pakistan)
Cooperation in the energy field is part and parcel of the construction of the Belt and Road Initiative. It not only promotes countries’ economic development but provides effective solutions to problems of energy development. More than 10 countries including Pakistan, Sudan and Turkey have joined hands with China to release a declaration recently to build a formal partnership in the cooperation in energy as part of the Belt and Road Initiative, which could create a huge international energy market.( Wang Yichen, journalist of Economic Daily)