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    April 30

    Competitve Intelligence: Presentation of Our Team and the Work

    Acknowledgement 

    Hereby we would like to express our great gratitude to our tutor in Competitive Intelligence, Professor PINTE, who imparted much technical and advice on our blog construction.

    Furthermore, we are most grateful for the learning opportunities offered by the director of Master Global E-Business, Mr. Olivers SIRVEN, at Université des Sciences et Technologies de Lille.  

     

    Team Presentation 

    We are proud to present our team members, all of which are Master (2nd year) student on Global E-Business at Université des Sciences et Technologies de Lille (France).  

     

    Job Designation

    LUO Zhiqi: Team Lead and editor. 

    XU Fan: Information researcher and web designer.

    WU Ji:  in charge of information filtering, categorizing, and editing.

     

    Justification of Selecting this Subject

    This blog is dedicated to the China’s Energy Policy and Strategy.

    We are from China, the largest developing country on the way of modernization and great renaissance.  

    The goal of this blog is not only to create a catalogue or an inventory of the latest news, but also we will try to give you a general history and an analysis of the possible trend on China’s energy problems and solutions. The selected articles and synopses will illustrate a multiple angles of view on this subject.

    This blog is worked on following one of our courses, Competitive Intelligence, coached by Professor Jean Paul PINTE. Mr. PINTE imparted us many useful methods, instruments and techniques in this area all along these three months. And it shall be finished before the end of April, with all the necessary information requested by Mr. PINTE.

     

    Methodology: 

    The method we have used to accomplish this job,

    1. Definition of the key words

    This is our first step to begin this blog, we seek for every single word of our name of blog to see their own and related meanings. This Brainstorming workshop offered us the first relative complete image of our subject! After this step, we finally got a list of key words in order to better continue the real “blog job”.

    To find the related key word of our subject, we used Kartoo to see the definitions around our subject.

        2.   Software Tools using

     For all these different tools that were given by our teacher during the class, we choose some of them for our blog. For the Catalogue Tool we sit, we choose Gosheme and Kartoo; for the news all over the world, we choose Webdopresse to complete the information in the web modality; for the other blogs, we choose BlogDigger to add the information in the blog area; we also use search to see the invisible webs in order to offer a better work.

        3.    Information research  

               Using all those tools in the Competitive Intelligence List, we were very competent to seek the very “in” information for our blog.

     

    What, When, Why, Who, Where and How Update

    We have done a very complete job of choice and summarize; since information is not all good neither fitful so that we need to keep in mind that our exact subject to get the information pertinent neatly to it. Every week our group does a group meeting to discuss about our blog and the actual evaluation.

     

    April 28

    China Premier Minister Wen Jiabao appeals to reform the energy-consumption policy

    April 28, 2007
     
    The premier minister Wen Jiabao said that China should take more steps to confine energy consumption so as to control the environmental pollution. He appeals to the legislative authority for revising the state policy on the highly energy-consuming industries.
     
    Government officials should reconsider land and taxation policies for favored industries. With respect to environment protection, China is
    be exigent of economizing energy consumption and reducing pollution emission to respond to the severe threat of green house effect.
     
    While burning, coal emits carbon dioxide that is generally believed to be the primary gas warming the earth.
     
    China is largest coal producer and consumer in the world. And it is estimated that this year China will outdistance USA to be the No.1 gas emission country.
     
    Translated and summerized by LUO Zhiqi
     

    Pakistan considers building gas pipeline to China

    April 24th, 2007
     
    The planned natural gas pipeline, Pakistan to China,  allows oil transport from Arabic Sea and Iran to Pakistan and China without Strait of Malacca.
     
    China aids Pakistan in harbor construction
     
    Last year, China and Pakistan agreed to cooperate on oil refining and reserve facilities in costal area of Pakistan, aiming at the oil and natural gas from Middle East and Central Asia.
     
    The Gwadar Harbor, located in Balochistan, southwest of Pakistan, is the crossroad of Middle East, Central Asia, and South Asia, as well as the transport / energy / trade corridor connecting East Asia and Middle East.
     
    This harbor will allow the continental oil transport to China, by means of highways in the northern Pakistan and western China.
     
    The cooperation interest for Pakistan
     
    Regardless of the traditional friendship between China and Pakistan in terms of the common containment policy on India, the natural gas transport project benifits Pakistan's economy for that Pakistan might share part of natural gas on way and recieve pipeline rent revenue.
     
    Opposition from Washington
     
    Anther project intended to transport natural gas from Iran to India, natural gas pipeline 1620 miles from Iran, Pakistan to India with capacity of 5.2 Billion m³  per day, has been opposed by the White House as it would undermine Washington's effort of  embargoing Iran. However, it is believed that Pakistan will insist on its national interest and continue its project  in spite of the counter-terrorism alliance with USA.
     
    China is Pakistan's 2nd largest trade partner
     
    Following USA, China is the most important business partner of Pakista with the bilaterral free-trade agreement signed on November 2006 and started effective from July 1st, 2007.
     
    China Mobile tookover the oldest mobile operator in Pakistan with 0.7 Billion US dollar investment. Besides, China will help Pakistan to construct an automobile factory and an airport in Gwadar. 
     
     
    Translated and summerized by LUO Zhiqi

    China seeks international suppliers for national Uranium reserve

    April 18th, 2007
     
    China is determined to reinforce the strategic reserve of natural Uranium by the year 2020 and carry out protective exploitation policy on local resource.
     
    The natural uranium in China is believed to be employed as:
     
    1. fuel of nuclear power which is reletively clean and safe to ecologic environment.
    2. fuel of nuclear weapons
    China has to resort to global procurement as the existing reserve of natural Uranium in China is finite.
     
    Meanwhile the recently published <11th national five-year nuclear industry plan> announced the National Natural Uranium Reserve System, which is the 3rd national reserve system following National Food Grain Reserve and National Petroleum Reserve.
     
    According to the agenda, China will annually build 3 new nuclear units in the next 10 years. It is estimated that the production capacity of nuclear fuel would be 4 to 6 times as much as that of today, i.e, 7 Million KW.
     
    The factor of environmental protection in nuclear power development
     
    At present nuclear electricity only accounts for 1% to 2%, up to 10% in predictable future, of electricity supply in China. To optimize the power structure, Chinese government hopes that the neclear electricity would partially substitute unregeneratable and non-clean coal.
     
    Thus Beijing resorts to international uranium provision to replenish nuclear fuel.
     
    Fuel for nuclear weapons
     
    International procurement is more than important to China's next generation nuclear armory.
     
    Australia possesses 40% of world probed Uranium reserve. In compliance to the nuclear collaboration agreement with China on April 2006, Australia has the obligation to annually export 10,000 tons of uranium mine to China, doubling the Australian uranium export after the ratification of the contract by both sides.
     
      
    Translated and summerized by LUO Zhiqi

    China and Japan reach the agreement on gas and oil, yet 2 oil fields remain controversial

    April 12th, 2007
     
    The Tianwaitian and Chunxiao oil-gas fields situated in uncontroversial sea area of East China Sea aggravated the energy diplomatic friction between China and Japan since Japan is anxious for the China's eventual expanding exploitation radius and absorbing gas resourse from Japanese proprietary economic area.
     
    The CNOOC (China National Offshore Oil Coporation) reported that the Tianwaitian daily produces 4 Million ft³ of oil-gas, these two gas fields will contribute 600 Million m³ every year.
     
    Translated and summerized by LUO Zhiqi

    China might win the 1st oil contract from Iraq Government

    April 9th, 2007
     
    The new legislation, which empowers Iraq government to sign oil prosepcting and production contract with foreign companies, is expected to be retified on July 2007, henceforth China and other Asian countries are most likely to win the 1st batch of contracts. 
     
    Western companies are supposed to have the priority for these contracts in that USA and its allied forces subverted Saddam Administration. Actually, the western oil companies are not prepared to enter Iraq due to:
     
    1. unceasingly deteriorated security situation: risks outweigh returns, large-scale investment seems to be infeasible.
    2. deficiency of governmental support and long-term target.

    The advantages of Chinese companies

    Chinese companies, with strong support from their principal shareholder - Chinese government, are surprisingly competitive in respect that they are willing undertake any venture wherever there is energy resource.
     
    Moreover, Chinese collaborates with local partners in a wide range of economic domains in addtion to energy projects. The long-standing amity leads to less security threat. Nonetheless whether Chinese will subject to assaults from resistance forces is yet to be observed.
     
    China appreciates long-term objectives
     
    China is expected to get the production quota of 70.000 barrels per day out of 2 Million barrels, which is current capacity of Iraq's output, whereas the daily output was 3 Million barrels before Iraq War.
     
    Chinese perceives that long-term  interest outvalues 70,000 barrels of oil, and Chinese would undertake life danger to establish strategic relation with Iraq, which has 3rd largest prospected oil reserve - 115 Billion barrels. The number of real reserve possibly doubles if not for the poor prospecting technology.
     
    The revivification of Iraq's oil production depends on the political situation and the resistant activities in regions full of commotion.
     
     
    Translated and summerized by LUO Zhiqi
     

    Australia helps China to develop cleaner technology of coal

    April 5th, 2007
     
    Australia will provide cleaner coal technology along with 21 Million US dollars to China.
     
    Background
     
    China is world's largest coal producer and consumer, while Australia is the largest coal exporter. Except USA, Australia is the only developed country which refused to sign the Kyoto Protocol.
     
    It was reported that China would take the place of USA to be the largest carbon dioxide emitter between 2009 and 2010. Industrilized countries including Australia encourage China to reduce carbon dioxide emission. It is estimated that 30% of China's energy would still be powered by powerstations using coal fuel in 2030.
     
    Beijing puts priority on economic development over environment protection
     
    Considering the employment issues in the poverty-stricken regions, Chinese government is reluctant to shut down old powerstations and plants, the closure of which would probably result in social disturbance.
     
    Translated and summerized by LUO Zhiqi  

    China starts paying EURO to purchase Iran oil asset

    March 29th, 2007
     
    Compliance to Iran's requirement of decreasing US dollar holdings
     
    It was said that Zhuhai Zhenrong Company from China, No.1 client of Iran's raw oil in the world, shifted to EURO to pay the 24,000 barrels per day, which represents 1/10 of Iran's daily oil export.  
     
    Now Iran requires all its clients to stop payment in US dollar. The president of Iran Central Bank claimed that almost half of Iran's oil revenue was paid by EURO. Neverthelesss, the Zhuhai Zhenrong Company is actually the 1st concrete case confirmed by foreign media.
     
    Background
     
    Along with the Iran Nuclear Issue disputed by Teheran and Washington, UN Security Concil imposed sanction on Iran's weapon export and frozed the property of 28 Iran individuals, institutions and companies.
     
    In response to the hostility from USA, the Central Bank of Iran has decided to lower the proporation of US dollor in foreign exchange reserve to 20%, and plan to abolish the US dollar valuation for petroleum.
     
    Other countries won't imitate China
     
    It won't be a precedent for the other oil importers to follow. The Japanese oil refining plants, which purchase 500, 000 barrels of crude oil -  1/4 of Iran's export, assure of US dollar payment and promise to shell out Yen if required.
     
    China enlarges oil investment in Iran 
     
    The Petro China determines to double its investment budget, on an Iran oil field, to 150 Million US Dollars. Chinese dare take the risk to invest in Iran because the American records implies that no companies doing business in Iran have been punished since the sanction.
     
    US officials express their concern
     
    Bush Administration warned Beijing of the "wrong signal" in the light of the weapon transaction between China and Iran.  Meantime, White House would keep its eyes open on China's investment in Iran's natural gas and crude oil.
     
    International monetary system won't be affected
     
    The monetary total of Euro transaction between China and Iran is inadequate to influence the international currency regime or US dollar, neither the other countries will pay in non-dollar currencies.  
     
    China is diversifying its foreign exchange reserves step by step. The procedure won't disorder the international financial market.
        
     
    Translated and summerized by LUO Zhiqi

    Oil<->Finished industrial products: Trade-off between China and Russia

    March 27th, 2007
     
    President Putin and Chairman Hu Jintao signed 4 Billion US dollar contract to exchange russian oil and chinese industrial products.
     
    Analysts believe that Moscow caters to Beijing's energy demand in exchange for the High-Tech support from China.
     
    Translated and summerized by LUO Zhiqi

    The oil export from Venezuela to China is expected to increase by 6 times

    http://www.voanews.com/chinese/w2007-03-27-voa18.cfm
    March 27th, 2007
     
     
    With the oil reserve of 285 years' sustainable exploitation, Venezuela is 5th largest oil producer and exports half of its oil to USA. At present, Venezuela is the 4th largest oil origine of America, after Canada, Mexico, and Saudi Arabia.
     
    And China is 2nd largest consumer behind USA.
     
    President Chavez expects to diversify the the oil export risk by decreasing the dependency on USA and increasing export to China from 120,000 barrels now to 1,000,000 barrels per day by 2012.
     
    China and Venezuela agreed to set up a joint-fund valued 6 billion US dollars to develop certain local projects.
     
    Translated and summerized by LUO Zhiqi

    CNPC reports new profit record

    March 26th, 2007
     
    China National Petroleum Coporation, the largest chinese oil enterprise, reports 18 billion of net profit in 2006, thanks to the record of 830
    million barrels of raw oil.
     
    Translated and summerized by LUO Zhiqi
    March 18

    China's Rising: Energy Demand and Policy

     
    March 16th, 2007
     
    The soaring China's economy enhances the China's economic and military power, and highlights the China's energy problems. Concerning the China's effort in global oil supply, western countries believe that the new competition would reduce international oil supply thus drive up the oil price. However, some American experts showed their doubt upon this concern.

    In 2003, China, instead of Japan, became the 2nd largest energy consumption country, following USA. Consequencely, China has to enlarge the oil import at the very moment when the oil price is on the upsurge worldwide. This strong demand increases the international anxiety on the oil price rising trend.

    Autarchy for 90% energy

    It's not true that China heavily depends on imported energy. 

    The latest figure from chinese government indicates that 94% of consumped engergy is from domestic supply in that China heavily depends on coal fuel, while China has the largest coal reserve in the world.

    But yet the oil is the only fuel which is imported in large amount by China.

    Neglectable impact on the oil market

    Western observers show their solicitude for the Chinese national oil companies' overseas investment especially on stock capital.

    The oil fields in Sudan and  Kazakhstan acounts for 2/3 of China's national oil companies' exploration. Furthermore, most of the this oil is sold locally.

    Therefore, China does import what it directly produces in foreign place of oil origin, instead of what China has to import from other suppliers.

    Besides, China is not capable to reserve oil in large scale for the moment although China is establishing its strategic oil reserve in addtion to its existing commercial reserve.

    Lastly, the inverstment in marginal oil field of Chinese coporations helps to stablize and increase global oil supply.

     Translated and summerized by LUO Zhiqi

    China's 2nd Largest Natural Gas Field Found in Sichuan Province

     
    March 18, 2007
     
    Confirmed by National Territory  Resource Minister, the discovery of the 2nd largest gas field located in north-east of Sichuan Province, is believed to be an exiting breakthough as the first time for Chinese  to find large-scale gas field in Haixiang Layer (Geographical Term).
     
    Engineers said that they conquered a variety of world-class technical problems in such complicated geographic structure. All of the 20 wells already exploited was proven to be successful.
     
    356.072 billion M³ reserve represents the 2nd largest gas field, what's more, upon this achievement Chinese scientists get more confidence in finding more huge gas field in China's 4.5 million KM² Haixiang Layer.
     
    Chinese energy expert proclaimed, furthermore, there could be more and more reserve to be found in West China - Talimu Basin, Sichuan, Eerduosi, even North China Flatland, and Chinese ocean territory.
     
    Translated and summarized by LUO Zhiqi
    March 16

    Jack Pump Made In China

     URL: http://www.youtube.com/watch?v=zQt8GEsGYMc

    Electric Bikes in China

     

     

    URL: http://www.youtube.com/watch?v=A6wQcIGx5Ew

    March 12

    China response on energy use

    It is criticized that China’s growing appetite for energy was the main reason of the rising of global prices. China yesterday officially dismissed this judgment and respond that its economy is mainly based on the local reserves of coal and oil, which helped to stabilize the resource markets. 

    Mr Ma, the head of the National Development and Reform Commission, the chief economic planning agency, said such criticism was “unfair” and misrepresented China's use of resources. China, mainly through the use of coal, was able to meet about 90 per cent of its own energy needs – 20 per cent higher than the Organisation for Economic Co-operation and Development average and 30 per cent more than the US.

    Although China remains a relatively small per capita energy consumer, a result of the relative poverty of its 1.3bn population, its greatest impact on global markets has been its increasing share of raw materials consumption.
     

    Source: http://www.ftchinese.com/sc/story.jsp?id=001009934
    Original article was published by Financial Times and written by Richard McGregor. The summary was edited by XU Fan

    March 08

    China’s Energy Policy: Strategic Implications

    When the People’s Republic of China was founded in 1949, this country was well able to se provide the energy; even the first two “oil shocks” (1973-74 and 1979-80) had little impact on the Chinese energy sector. But since the early 1980s, China se developed economically in a super speed, which evidently makes China run short of energy. This sparsity situation will continuer and indeed exacerbate in the future.

    The paradox between the limit of the local energy and the dilation of need obliges China adopt a multi-faced energy strategy.

    ?          Reform Of Energy Sector

    China’s government agrees that they have to ameliorate the actual Energy Department to face for the future expanding the high economic growth. In fact since 1955, China keeps changing the form of national energy agency, on changing the name, the organization and even the function. These continuing changes suggest that China lacks a strong national mechanism to oversee its energy sector.

    ?          Vulnerability To Attacks

    The country’s vulnerability to attacks by terrorists or pirates turn into a real problem in the case that China imports more and more foreign oil. Actually Chinese-own conveyance transports only very little part of the imports products; China begins to construct its own transport capacity in the subject to ship more imports by it self.

    ?          Diversification Of Energy Mix

    As the first consumer of carbon, all these fossil fuels bring large numbers of problems such as serious environmental pollution, threatens the sustainable energy supply, etc. Nowadays the natural gas takes more places in the energy used, and China plans to decline the consumption of coal; but this tendency can’t be the real solution, the imports more important and the brand new strategy in future can be predict!

    If we take a look outside of the country, certain politic is also being practiced to meet the needs of energy. The Middle East and Africa provide sequentially more than half of China’s oil needs, China has already diversify import sources; secondly Chinese companies have sought to establish a presence mostly in countries where US and European companies are absent.

     The dramatic political situations between China and some countries play an important role in the China’s energy strategy.

    ?          China and Russia

    Geographically they really should make cooperation; they are both against “American hegemony”, they have commendably ameliorated their relationship since years; above all these, the most important are that, Russia is a big provider of energy and China is a big customer.

    ?          Central Asian & African and China

    For them, China is a country who has the power to help them in UN; in other words China is viewed as a potential protector and ally on the international scene. They’re the ideal energy suppliers for China.

    ?          The Middle East

    Middle Eastern oil producers share significant commercial and strategic interests with China; with the rupture of the relationship between USA and the Middle East, and the dramatic improvements between Beijing and Riyadh, China has secured and developed this side of its suppliers.

     We bring up the conclusion in the text:

    Several conclusions can be drawn from this discussion of China’s energy outlook. First, China’s demand for oil will continue to grow in order to satisfy its high economic growth and the needs of its large population. Given the country’s stagnant domestic production, China’s dependence on imported oil will further deepen. Second, like other major energy consumers (ie, the EU and the US), China has sought to diversify its oil sources. Supplies from Russia, Central Asia, Latin America, and Canada are likely to contribute to Beijing’s energy security. However, Africa and the Middle East are likely to continue to be the main suppliers.

    Third, a key challenge to China’s energy security is how to control and regulate the rising demand for energy and create the appropriate governing mechanism to achieve this goal. Fourth, China’s energy security is increasingly an international concern. The nation’s rising demand is pushing prices higher and is raising serious concerns regarding global pollution and other environmental issues. Fifth, securing energy supplies has become a major aim of China’s foreign policy. China is likely to play a stabilizing role in international policy to ensure the non-interruption of oil supplies. Finally, Beijing’s rising demand for energy should not be seen at the expense of the US or other major consumers. Today’s energy markets are well-integrated. The source of energy matters less than its availability.

    Source: Written by  Gawdat Bahgat, who is Director of the Center for Middle Eastern Studies, Department of Political Science, Indiana University of Pennsylvania from   VOL. XLIX No 3 15-Jan-2007

    The summary is edited by WU Ji