Is China going to be addicted to oil?

The article on the Wall Street Journal website of the United States on March 29, the original title: Does China have to suffer from oil addiction? Last week, China's gasoline price hike was intended to curb the growing demand for oil. The continuous introduction of such adjustment measures and huge investment in renewable energy shows that China attaches great importance to controlling its dependence on fossil fuels. But if you want to avoid similar American oil addiction experience, I am afraid it is too late.

The culprit? In the course of development, China has produced a fanatic car culture similar to that of the United States. This culture had forced the United States to cast its arms on overseas oil-producing countries. According to the International Energy Agency, from 2000 to 2010, China’s average annual fund for oil imports was US$66 billion. However, the agency predicts that this figure will climb to 251 billion U.S. dollars in 2012, equivalent to 60% of China's oil consumption. Given that China has just entered the era of large-scale car purchases, the sharp increase in gasoline prices this month may have limited impact on China’s oil demand.

After all, the Chinese auto market is young, and the current trend of slowing down has more to do with Beijing’s control of inflation, rather than the sharp drop in car demand. Even if the growth of car sales slows down, Chinese people eager for cars will still be able to purchase 20 million cars this year. According to data recently provided by the authoritative automotive industry rating company, Jediball, 80% of car buyers in China are buying cars for the first time, and only 10% of car buyers need **. In other words, the Chinese have a lot of cash for buying cars. In addition, China's oil price after the increase is still much lower than Tokyo or Berlin.

Beijing's policy makers are well aware of the overreliance on imported oil's suspicions. However, they found that they were almost helpless. The main reason was that Chinese car owners, like American car owners, had become accustomed to less expensive fuels. Raising the price of oil too quickly will trigger strong opposition from the people. The slow price increase will only deepen China's reliance on oil and make it even more troublesome on issues such as Iran and the Nansha Islands.

To reduce pressure, the Chinese government is encouraging the automotive industry to develop electric vehicle technology. However, the expensive price of electric vehicles, coupled with limited endurance capacity, its annual sales only maintained at the level of thousands of vehicles. At the same time, the United States Economic Advisory Agency Global Sightseeing Co., Ltd. issued a report this month that China's total auto demand in 2020 is expected to increase to 30 million vehicles per year. Even if oil prices only grow at a moderate rate, the cost of China's annual oil imports will still exceed 500 billion U.S. dollars.

This dependence on petroleum troubles will only intensify. As the United States has profoundly realized, addiction often causes trouble. The world should prepare for the intensification of conflicts in areas with oil reserves. (Author Michael Dunn, Wang Hui Cong)