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China’s Crude Imports Rise 17.6% in First Half of 2006; Refined Product Imports Up 48.3%

People’s Daily. China’s net import of crude oil rose to 70.33 million tons (about 2.9 million barrels per day) and of refined oil products to 12.03 million tons (about 500,000 barrels per day) in the first half of the year, according to the country’s General Administration of Customs.

That represents an increase of 17.6% in imported crude, and 48.3% in product, year-on-year.

China imported 73.33 million tons of crude oil and exported 3 million tons in the first half of 2006, said Zhang Bingzheng, a statistical analyst under the department of statistics of China Customs, at an industrial forum held in Taiyuan, capital of north China’s Shanxi Province.

As for the refined oil, the country imported 18.23 million tons and exported 6.2 million tons in the January-June period, Zhang said.

Angola, Saudi Arabia, Iran, and Russia are the top four oil suppliers of the country in the first half year, said Zhang.

China produced 91.66 million tons (3.7 million barrels per day) of crude domestically , up by 2.1% over the same period last year, and 84.82 million tons (3.5 million barrels per day) of refined products, representing a year-on-year increase of 5.6% in the first half of the year, according to the China Petroleum and Chemical Industry Association.

The rapid growth of Chinese economy as well as its booming auto ownership contributes to the surging demand for oil in the country, said experts. According to data released by the National Bureau of Statistics, China’s GDP surged a year-on-year 10.9 percent in the first half of 2006, 0.9 percent higher than the same period of 2005.



I've read articles on Bloomberg every now and again about how the Chinese economy is essentially too good. They've completely lost control of their banking sector and have a growing number of Non-Performing Loans, and massive overinvestment in factories.

The Chinese economy will crash at some point. The analysts think they're starting to teeter. We will see.


Economical science as we know it in developed countries does not nearly applicable to emerging economies, especially professionally operated semi-government one represented by China. It is just classical example of apples vs. oranges.
BTW, classical economics is lagging way off accurate analysis of emerged internet-based economies, such as in US/Canada. Do not hold your breath on traditionally-based economic analysis in these cases.


Andrey, I am with you to a certain extent, but as we saw in the dotcom bubble, the old orthodoxy can be ignored, but only at your peril. China is in a very tight spot and their banks are at the center of the problem. Bad loans have been the downfall of many an 'unstoppable' national economy, and bad banking practices combined with a more restive labor pool, the inefficiencies of a semi-planned economy and an increasing poisoned environment are going to have their impact, and probably sooner rather than later. That having been said, the chinese work ethic, i.e. work hard and smart, may delay the crisis by a few years, but if it does, I think it will simply make the problem worse. I have spent only a little time in China, but a lot of that was on foot and on a bike in areas that were out of the tourist areas, (by a bit) and it just doesn't look healthy. The Communist Party can use nationalism to keep most of their people in line but that only works so long, and then the wheels come off.


If Chinese oil demand continues to grow at this pace then it will only be a year or two before demand outstrips production (pollitical/millitary disruptions to supply aside). I believe world oil production grew at between 1 and 2 percent last year. When this happens we're really going to see some high prices. The fallout will be interesting (nobody really wants to live in interesting times). Good thing I'm used to riding a bycicle. Go Tesla go.


I think there's more to this issue than meets the eye.

It's important to note that Chinese oil demand is artificially inflated in 2006 by a combination of two factors:

1. The Chinese government raised fuel prices, making it more profitable for refiners to produce fuels from their crude. In 2005, the price of fuels was still artificially low and it made production of refined fuels unprofitable; refiners ran as little as possible and reduced purchases of crude to try and reduce their losses. However, in early 2006 those controls were raised and refiners began to run more crude as the prices balanced out. That has pushed demand artificially upward as refiners not only increase production but are producing at levels artificially higher than 2005.

2. China is building its own SPR, which means imports of crude oil (mostly from Saudi Arabia) are going to be elevated until their SPR is filled. Purchases of that crude started in the first half of 2006 and probably have been accelerating throughout the year.

In fact, oil demand might start slowing as the power grid improves and the need for diesel generators to manage summer blackouts declines. They're also developing a lot more resources in their own waters and building out a lot of alternatives to try and manage demand. If China's economy slows down, either via soft landing or a crash, its oil demand is going to fall to more manageable levels.

allen Z

Heck, the PRC might have someone who has heard of the new process that improves extraction of kerogen from oil shale.
___Power problems that are being rectified are being done with mega hydroelectric projects. We all know of Three Gorges on the Yangtze, but other proposed projects on the Mekong, and other Yunnan/Tibet sourced rivers will dwarf it.


I see China's 10% growth as something the west wants them to slow and they would want this too except that unless they keep growing at a rapid pace they get "run over" by the process they started.


By the "run over" comment, I meant that they might implode if they did not keep up an above average growth.
The economic projections depend on growth projections. If they take drastic steps to control growth, investment would find another place to bargain. It may seem like a Mad Hatter world, but that is capitalism.


I agree with you but would add that it is also politics. They have set expectations in motion for their citizens, and Communist or not, they still have to maintain a level of satisfaction with the growth, or there could be social disruptions as well as economic. They will use whatever energy is necessary to accomplish this, recesion or not.


China surely spicing up the world market, steel up, crude up, and their exports down and basically killing off many manufacturers.


Interesting what happens when the developing world careful what you wish for.


Their exports may be down but there is still a trade deficit between the US and China of close to $10 (or was it $20?) billion dollars annually...with China exporting more to us then we do to them. (I guess we can't get enough of low cost electronic components?)


The U.S. trade deficit was more than $725 Billion in 2005 and I believe more than $200 Billion of that was with China.
"Some $201.6 billion of the nation's trade deficit was with China alone.."

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