Analysis On Risks And Diversification Strategy Of China’s Oil Import

As one of the most important source of industry and strategic materials, oil plays a quite significant role in promoting our country’s economic development as well as achieving the state’s strategy. Whether or not can we obtain adequate oil supply directly concerns our country’s political, economic and martial security. The demand of oil manifests high-speed expansion alongside of the rapid growth of the economy. The domestic oil’s supply and demand gap becomes yearly increase, which makes importing oil from overseas as one of the most efficient methods in solving this gap. Since1993, China has transferred from oil net exporter to net importer, and the foreign trade dependence has boosted year after year, definitely, it’s a hard situation for current China. All social circles pays enormous attention to Chinese oil security, besides which, they call on all relevant departments to establish strategic petroleum reserve and make full use of two kinds of resource, on one hand the domestic resource, the foreign resource on the other. Optimizing allocation of worldwide resources, bringing down the energy consumption as well as implementing diversification strategy of oil import are extremely urgent. The diversification strategy of oil import, of which, is the most frequently used method to reduce the risks of importing oil.The diversification strategy of oil import, which means synthetically using different kinds of ways to carry the oil purchased, the quota oil from all over the world, the oil obtained from the world spot and future market, back to country. Through the implementation of this strategy, oil importer will decrease the degree of trade dependence on a certain region in order to guarantee a safe supply of oil demand, also will lower the risks of oil shortage or interruption caused by unpredictable emergency (For example:the war, natural disasters) occurred in some places, or by diplomatic or economic disputes with our own country. Broadening the choice range and flexibility of oil import will help a country prevent being enslaved by others due to the oil factors. A country, at the same time, should consider the economic cost, transport risks, geographic factors, the exporter’s political factors and so on, which will probably happen at any part of oil import.China puts the energy security at strategic height. Putting the diversification strategy of oil import into action is extremely urgent. In2003, China has already overrun Japan and become a second largest oil consumption country, which was only second to the America. The degree of oil import dependence ran up to as much as35%, even more difficult to believe is in recent two years, this number has rocketed up to over55%. Obviously, the situation of Chinese oil import is rigorous. For the present, Chinese oil import security has to be confronted with duel matters—"inside and outside". In respect of inside, increasingly broadening is the gap between production and consumption associated with high speed growth of national economy. Chinese average annual growth of national economy and consumption of crude oil have soared up to9.79%and5.77%respectively since1920s, the supply of oil, however, only increased by1.67%. The supply of energy seems unable to meet as much as the high speed growth of national economy. On the other hand, the system of oil strategy is set up late, and there are many shortcomings existing in this system, for instance, inside of Chinese oil system, the integrated reserve day is just21.6.In reference to the outside, China, exceedingly, throws herself on the Middle East. And unfortunately, this area is a "concentration camp" of international conflicts. The paradox is that as much as80%Chinese oil has no choice but to go through Strait of Malacca, which is the heart of "concentration camp" full of pirates and jumbled orders. From which can we see how concentrate of oil import resource, how sole of the transport channel, how imperfect of oil strategy and its spot and future markets. Oil import in China is just served to meet the emergency originated by the gap between oil supply and demand, due to which the phenomenon of buy in high price, sale in low price arises. In addition, oil import in China gives an impact to the international oil market, and "Chinese Oil Threat Theory" is also deep-rooted in overseas. Our country’s oil import security will bring up against unprecedented challenges from the rest of the world.Thus, how to evaluate our country’s oil import risks in a right way, and then evade the risks, in order to ensure the oil trade security has become one of most urgent theoretical and practical problems that we have to envisage and concern. This article starts with analysis on the world’s energy configuration, especially the oil current overall situation, then details Chinese oil import situation. Based on which, I further expound the risks encountered by oil import in China with the help of statistical data and formulas. Next, I introduce the diversification of oil import strategy and elaborate feasible plans. In sum, this is my article’s trait of thought.