To expand crude oil and natural gas imports from the US will optimize China’s energy structure, said Wang Zhongying, deputy director of the Institute of Energy Research under the Chinese Academy of Macroeconomic Research.
Wang made the remarks after China and the US issued a joint statement last Saturday following economic and trade consultations, agreeing to meaningfully increase the export of US agricultural and energy products.
The US is an emerging supplier on the international energy market with sufficient oil and gas supplies. It has achieved energy independence after the subprime mortgage crisis.
Meanwhile, China sees a large energy demand to keep up with its rapidly developing economy. However, its domestic energy output cannot satisfy such a huge need.
According to the National Bureau of Statistics of China, the country imported over 400 million tons of crude oil in 2017, which was more than twice the amount of that produced domestically.
In addition, the country’s gas import also experienced substantial growth in the same period, reaching 94.63 billion cubic meters.
“China-US energy cooperation enjoys natural advantages,” said Zhong Wei, director of Beijing Normal University’s center for financial studies.
On one hand, southeast coastal regions of China see most of the country’s energy demand, and the broad seaway on the west Pacific guarantees smooth transportation, he explained, adding that China is also capable of building mega ships to carry crude oil and liquefied gas.
In Wang’s opinion, China is a country that highly relies on crude oil import, and most of that currently comes from the Middle East. As a result, to further expand import sources will also improve the country’s security.
In addition, increasing the energy import from the US will help stabilize energy supply as China transits its economy from a phase of rapid growth to a stage of high-quality development.
Furthermore, to expand imports in energy is also one of China’s major moves to improve its people’s livelihood.
So far, the US has grown into the world’s largest natural gas producer. The International Energy Association predicted that the natural gas production of the US will take up to more than 20% of the world’s total in 2020, and the country is expected to be the largest gas exporter by 2022.