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Economy | Time: Mar 28 2019 3:47PM
Energy cooperation can be among BRI's mutual benefits
 
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China needs to reduce its dependence on imported crude oil, which reportedly stood at nearly 70 percent in 2018, because energy security is a matter of national security.

If the ratio keeps rising, internal and external policies adopted by the Chinese government will be constrained by an excessive dependence on foreign oil. China must prevent that from happening.

China's dependence on imported crude oil is forecast to increase to about 72 percent in 2019, said a report jointly released by the China Petroleum Enterprise Association and a research center of the University of International Business and Economics.

It's too soon to say what will happen this year, but the report has set off alarm bells regarding China's crude oil imports.

With domestic crude oil output stable, China may have to reduce its oil consumption to safeguard its energy security. The National Development and Reform Commission (NDRC), China's top economic planner, said in 2017 that domestic oil production would have to reach more than 200 million tons to guarantee the oil consumption level of 590 million tons in 2020. However, apparent oil consumption - that is, domestic production plus net imports - in China hit 648 million tons in 2018, according to the new report, greatly exceeding the target given by NDRC.

This means China must strictly implement curbs on oil consumption and take more stringent measures if needed to meet its goals.

First, China must accelerate the development of clean energy. The electric vehicle sector is being developed as a way to reduce the public's increasing demand for oil, and it is likely to receive more fiscal and policy support. This means business opportunities for foreign companies such as US premium electric car producer Tesla.

Second, China must invest more in urban electric-powered rail transit. The development of mass transport infrastructure will be another engine of China's economic growth.

Third, China must improve energy efficiency to curb oil consumption.

All these measures are in line with China's efforts to reduce pollution.

To safeguard energy security, China will not only need to reduce oil demand but also diversify oil import sources as the country pushes forward the Belt and Road Initiative (BRI). Such moves are likely to affect the international energy market and the geopolitical landscape.

Increasing oil imports from countries along the routes of the BRI can reduce China's dependence on certain countries to enhance China's energy security. Energy cooperation is part of the mutually beneficial cooperation under the BRI, which will also bring tangible benefits for countries and regions along the routes.

Source: globaltimes
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