Oil Shortage Could Derail Chinese Economy

BEIJING (Kyodo) — A government minister has admitted that China faces a significant shortage of oil and other natural resources which could limit the country's future economic development, state media reported Monday.

 

Wang Min, vice minister of land and resources, said the country will increase efforts to develop its own mineral resources to make up the shortfall, the China Daily reported.

 

Wang said China faces a shortfall of 6 billion tons of oil, 600 million cubic meters of natural gas and 3.5 billion tons of steel in the coming years, despite an aggressive policy of Chinese investment in oil and minerals production overseas.

 

''An insufficient supply of resources has become a major bottleneck for the country's development,'' he said.

 

Wang added that the need for China to further develop its own mineral resources has been increased because of the rising cost of oil and other commodities on the international market, the report said.

 

''Given that the global mineral market is increasingly controlled by global monopolies, with prices soaring under the influence of political, military and economic factors, we will have to mainly rely on the domestic market for further demand,'' he said.

 

China's economy expanded by 11.4 percent in 2007, the fifth year in a row it has achieved double-digit growth.

 

Much of that expansion was due to exports from China's manufacturing industries, which analysts say are massively increasing demand for energy and minerals.

 

Wang said that in 2006 China used 39 percent of the world's coal production and 33 percent of its steel.

 

It also consumed 22 percent of the world's copper production that year, he said.

 

More than 200 foreign companies have invested in mineral surveying in China, the China Daily reported, including projects to find oil, natural gas, coal, copper and gold in the nation's vast western regions.