Prior to the 1974 world energy crisis, little attention had been paid in the West to the Chinese energy potential. The energy crisis and subsequent Chinese claims of the discovery of huge offshore resources in the continental shelves of the Yellow and the South China Seas generated excitement in the West. Various business groups and energy experts in the West have since projected Mainland China’s crude oil output and probable exports in the 1980s. Based on groundless rumors and speculations, these guesstimates produced the strong expectation that Mainland China might become a new, major oil producer and exporter in the 1980s.
Despite the optimistic claims and projections, energy output in Mainland China peaked in 1979. During the following two years, all major energy production declined. At the beginning of 1983, not only had the rosy prospect of Mainland China becoming a major oil exporter vanished, but the government also encountered an acute energy crunch. The shortage of energy caused the industrial sector to operate at only 70 percent of its existing capacity.
This radical change in Mainland China’s energy scene has invalidated the conclusions and projections of many earlier studies on the subject. This study attempts to review new information in order to predict the demand and supply of primary energy in Mainland China in the benchmark years 1985, 1990, and 2,000.
The study is divided into seven chapters: Chapter One serves as an introduction; Chapter Two discusses the scope and methodology of the paper, including the data base and the conversion factors of various forms of primary energy; Chapter Three examines the aggregate supply of primary energy. It discusses its growth, composition, and regional distribution. Chapter Four looks at the 30 plus major production centers for oil, coal, natural gas, and hydroelectric power. Although this study is designed as a general survey focusing on aggregate supply and demand, a discussion of these centers is included because a solid understanding of these production centers is necessary for accurately estimating the aggregate supply; Chapter Five although hampered by a limited data base, discusses changes in the energy-output relationship. It also gives a rough sectoral analysis of energy composition, which is followed by a projection of future energy demand through the year 2000; Chapter Six takes up the energy commodity trade in Mainland China. Here, it is shown that in the years ahead Mainland China’s energy trade may become more commercially oriented, subject to the demand and supply of the international energy market, and regulated by its domestic requirements and its export capacity; Chapter Seven concludes the paper by pointing out a widening gap between the production and the consumption of Mainland China’s energy. Slow growth in the energy sector will be the most serious constraint to economic growth in the 1980s.
In total, the paper emphasizes that the current energy crisis in Mainland China did not evolve overnight. Rather, it is the cumulative product of many flaws in the developmental policies adopted during the past 30 years.