China predicts a sharp increase in oil imports as growth surges

PEKING (Reuter) - China is destined to become a large importer of crude oil as rapid economic growth continues and the country's coastal refining industry expands, a senior industry official was quoted as saying.

The China Daily quoted Li Yizhong, executive vice-president of China Petrochemical Corp, as saying that crude imports would rise sharply in 1995, with demand staying buoyant for a long time.

Customs figures show that in the first seven months of 1994 China imported 6.08 million tonnes of crude.

Exports totalled 10.26 million tonnes in the same period, down from 10.62 million.

In 1993, when economic growth reached 13 per cent, China imported 12.8 million tons of oil products and exported 3.4 million tons.

Mr Li said China had 20 per cent of the world's population but only 3.7 per cent of its crude processing capacity.

'China needs to spend at least 100 billion yuan ( pounds 7.8bn), some of it in the form of foreign investment, to boost capacity.

'Utilising foreign capital, especially direct investment, would be our long-term strategy,' Mr Li said. He did not specify how much foreign capital China planned to try to attract.

Priority will be given to renovating refineries in coastal areas, where imported crude oil can be processed close to the highly industrialised areas where it is used.

Domestic oil production lags far behind growth in industrial production. In the first seven months, industrial output grew 18.69 per cent over the same 1993 period, but crude output rose only 0.88 per cent to 85.7334 million tonnes.