China's blistering economic growth has made access to adequate energy supplies an increasingly important priority. It is the world's second largest consumer and third largest producer of primary energy. From 2000 to 2005, China's energy consumption rose by 60 percent, accounting for almost half of the growth in world energy consumption. The country is able to meet more than 90 percent of its energy needs with domestic supplies—largely because of abundant coal reserves and a coal-based economy. However, it imports almost half of the oil it consumes.
Self-sufficient in oil as recently as 1993, China became the world's second largest consumer of oil behind the United States in 2003. A year later it was the number three importer of oil after the United States and Japan. Between 2000 and 2005, China was responsible for about one quarter of the growth in world oil demand, but only accounted for less than 8 percent of global consumption. However, imports are projected to account for 60-80 percent of China's oil consumption by 2020.
China is grappling with its new role as a major importer of oil. The country's loss of selfsufficiency, substantial increases in the volume and cost of its oil imports after the turn of the century, and its emergence as an important factor in the world oil market and accompanying international scrutiny all caught China's leaders by surprise. For the past decade, Beijing has been struggling to cope with the domestic and foreign consequences of rapid demand growth.This report, a study of China's oil policies and policymaking, was written by Erica Downs, the China Energy Fellow at the John L. Thornton China Center at the Brookings Institution.