China is the world's second largest consumer of primary commercial energy, accounting for 12% of the global total. Its demand in 2003 was equivalent to that of Japan, South Korea, India and Indonesia combined, or some 80% of the EU-15 states, and it increased by 14% in that year. In 2002 China overtook Japan to become the second largest consumer of oil. China 's demand for oil rose by a further 11% in 2003, when it accounted for 7.5% of global oil consumption. The same year oil imports rose nearly 30% to 128 million barrels, some 5.5% of globally traded oil. Net oil imports were 108 million barrels, or 40% of China 's total oil consumption.
In the twenty-five years of economic reforms since 1978 China 's annual economic growth has averaged 8-10% and its consumption of both primary commercial energy and of oil has risen three-fold. Yet it was only in 2003 that the impact of this growth on international commodity markets started to significant across a wide range of materials, from steel to coal and from soy beans to crude oil.
Though China 's rising demand has been only one of many factors driving up oil prices, it is likely to remain a major influence on global oil markets for the foreseeable future. China 's impact on oil prices will depend not only on actual levels of demand but also on the perception by the markets of the government's policy for its oil sector.
This paper provides a brief review of trends in China 's oil sector over recent years, before reviewing the countries strategy for oil imports and identifying some key issues to watch over the coming years.