China and its energy - some perspective within the long term outlook

In 2004, China consumed over 6 mb/d of oil and imported some 2.5 mb/d, in each instance exceeding 2000 levels by 1 mb/d. This reflects rapid growth in all areas of energy demand, in turn linked to economic growth more rapid and more energy intensive than assumed by a number of international energy experts. Markets, however, have already integrated these developments, perhaps going overboard in the process. To provide of framework and to introduce the other articles on China contained in this issue, the author examines China's economic growth potential for the remainder of this decade and sets it at a solid 8% p.a. Given this fast pace, if the IEA's latest projections of China's energy consumption in 2010 are to be realized, then energy intensity per unit of GDP will have to be reduced by some 4% p.a., instead of the 2.6% p.a. assumed by the IEA. Also, China will have to limit its rising dependence on oil. These challenges may well be taken up, judging by the findings in the articles. True, the IEA projections or 2010 and beyond look to be consensual. But in the fields gelds of transportation and electricity generation, there is huge potential for fuel and power economy. China will be able to mine a lot more of its main energy source, coal, if it continues with structural reforms. In these circumstances, getting gas to China is not yet urgent. (author)