China’s oil imports fell in 2005 for the first time in four years, Chinese government officials announced in January. But industry analysts say these figures tell only a part of the story behind China’s energy demand.
On Jan. 25, Li Deshui, director of China’s National Bureau of Statistics, released results for 2005 that left observers puzzled.
Although the economy had surged ahead with gross domestic product growth of 9.9 percent, the government said that overall oil imports had dropped 5.3 percent.
These figures represent the first decline in imports—both of crude oil and of refined fuels—since 2001. This would be a remarkable drop in light of the sky-high 34.8 percent rise in crude oil imports in 2004.
In interviews with Radio Free Asia, experts raised doubts about the accuracy of the oil data and argued that comparisons with 2004 may give a false impression of China’s consumption.
Sam Dale, the Singapore bureau chief for Petroleum Intelligence Weekly , said imports and demand were both high in 2004.
Let’s remember, 2004 was an astonishingly unusual year with extremely and unprecedentedly high growth rates,
“Let’s remember, 2004 was an astonishingly unusual year with extremely and unprecedentedly high growth rates.”
To compare figures from 2005 against 2004 is “accurate, but it’s not necessarily fair,” Dale said.
For much of last year, China’s government effectively discouraged China’s biggest refiner, Sinopec, from importing oil by refusing to allow increases in fuel prices.
The government made up the difference with a subsidy of 10 billion yuan (U.S. $1.2 billion) to cover its losses, the company announced in December.
Though total oil imports into China did decrease last year, Dale said, demand for oil did not contract. “Oil demand in China last year grew, let’s say, 5 to 6 percent.”
Jason Feer, the Singapore bureau chief for the weekly newsletter Petroleum Argus , said reports of a decline in oil demand may be hard to reconcile with China’s huge growth in GDP. “There are real problems with transparency in the Chinese energy markets,” Feer said.
Feer noted that China’s government does not report how much oil Chinese companies keep in stock or how these inventories change.
“So I think there’s obviously some questions that need to be answered regarding the figures and regarding what’s happening in China these days.”
Original reporting by Michael Lelyveld. Edited for the Web by Richard Finney.