Economic growth feeds China's insatiable appetite for foreign oil

China's national oil companies are increasingly visible in the Middle East. Here's why:

China is the world’s most populous country and largest energy consumer. It is the second largest economy in the world. From 2001 to 2011, it experienced annual GDP growth of about 10 per cent.

The recent slowdown in the Chinese economy is planned and calculated, as indicated in the government’s 12th Five Year Plan, in the hopes of restructuring the economy, boosting private consumption and relying less on exports. Those are the main Chinese lessons of the recent financial crisis.

Since 2000, China's needs for energy have grown rapidly. Continuous economic growth coupled with structural change in energy consumption before and after the country joined the World Trade Organization in 2001 have been behind this dramatic increase in energy demand.

Also, the change in energy consumption trends has had a huge effect on the country’s environmental records. According to the US energy information administration, from 1980 to 2002 China was responsible for about 28 per cent of the net growth in the world’s carbon emission. However, the country accounted for more than 50 per cent of the growth in emission from 2002 to 2005.

The recent shift in the country’s energy consumption has been a result of two main changes in the economic structure. The two changes were in the way the Chinese government kept up the country’s GDP growth. According to some economists, investment went up exponentially after 2002 and surpassed private consumption to become the largest slice of China’s GDP pie in 2004.

Investment, especially in energy-intensive fixed assets, reached about 44 per cent of real GDP by 2008.

The second change was in the share of net exports, which leapt from about 2 per cent of GDP in 2002 to around 8 per cent in 2008.

Essentially, Chinese economic growth since 2002 has been sustained by this growth in investment and net exports.

Looking forward, McKinsey Global Institute expects that some 350 million people will be added to the urban population in the next decade. That will present a new set of challenges ranging from availability of social services to availability of energy supply.

In terms of energy consumption, there is a huge difference between urban lifestyle and that of the suburbs; urban living is more energy-intensive. Those living in cities are more likely to use cars, trains, washing machines, fridges, TV, lights, heaters/air conditioners and many other devices that consume energy. This trend makes it imperative for the government to invest heavily in the energy industry. The widening gap between energy consumption and production makes this investment an even more urgent matter.

According to BP, China's gap between gas production and consumption was about 2 per cent in 2007, but had jumped to around 22 per cent by 2011. Gas consumption represents 4 per cent of the total primary energy consumption, but its share is expected to increase to 8 per cent by 2015, as predicted by the International Energy Agency (IEA). This is normal when considering the country's aim to reduce its carbon emission intensity rate by 17 per cent by 2015 – gas emits half the carbon dioxide of coal.

Similarly, the gap between crude oil production and consumption was 4 million barrels per day (bpd) in 2007, but grew to 5.7 million bpd in 2011. The country’s oil reserves-to-production ratio is 10, indicating that at the current production rate and with no major future reserves expansion, the country has only 10 years before it runs out of oil.

Many factors influence China’s energy strategy, but the one that keeps the decision-makers awake at night is the country’s insatiable thirst for oil, about 60 per cent of which is imported. More critically, according to the IEA, the country is expected to import 77 per cent of its oil requirements by 2020.

With expected GDP growth of at least 7.5 per cent a year, little expansion opportunity in domestic oil production (a great deal of which comes from ageing fields) and challenges in reducing energy intensity, the gap between oil production and consumption is expected to increase for years, if not decades, to come.

The statement of Zhang Guobao, former head of the country’s National Energy Administration, succinctly and clearly describes China’s situation: “Oil security is the most important part of achieving energy security ... preparations for alternative energies should be made as soon as possible.”

Ebrahim Hashem is a senior adviser in business strategy and corporate governance at an Abu Dhabi-based company.

Cinco in numbers

Dh3.7 million

The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown

46

The number, in kilograms, that Swarovski’s wedding gown weighed.

1,000

The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]

50

How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday

3,000

The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.

1.1 million

The number of followers that Michael Cinco’s Instagram account has garnered.

The%20specs

%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%20Twin%20electric%20motors%20and%20105kWh%20battery%20pack%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E619hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E1%2C015Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3ESingle-speed%20auto%0D%3Cbr%3E%3Cstrong%3ETouring%20range%3A%20%3C%2Fstrong%3EUp%20to%20561km%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%20%3C%2Fstrong%3EQ3%20or%20Q4%202022%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh635%2C000%3C%2Fp%3E%0A

The rules on fostering in the UAE

A foster couple or family must:

be Muslim, Emirati and be residing in the UAE
not be younger than 25 years old
not have been convicted of offences or crimes involving moral turpitude
be free of infectious diseases or psychological and mental disorders
have the ability to support its members and the foster child financially
undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially

Brief scores:

Southampton 2

Armstrong 13', Soares 20'

Manchester United 2

Lukaku 33', Herrera 39'

What is hepatitis?

Hepatitis is an inflammation of the liver, which can lead to fibrosis (scarring), cirrhosis or liver cancer.

There are 5 main hepatitis viruses, referred to as types A, B, C, D and E.

Hepatitis C is mostly transmitted through exposure to infective blood. This can occur through blood transfusions, contaminated injections during medical procedures, and through injecting drugs. Sexual transmission is also possible, but is much less common.

People infected with hepatitis C experience few or no symptoms, meaning they can live with the virus for years without being diagnosed. This delay in treatment can increase the risk of significant liver damage.

There are an estimated 170 million carriers of Hepatitis C around the world.

The virus causes approximately 399,000 fatalities each year worldwide, according to WHO.

Cryopreservation: A timeline

Keyhole surgery under general anaesthetic
Ovarian tissue surgically removed
Tissue processed in a high-tech facility
Tissue re-implanted at a time of the patient’s choosing
Full hormone production regained within 4-6 months

Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013

Kamala Harris: who is Joe Biden's running mate?

NO OTHER LAND

Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal

Stars: Basel Adra, Yuval Abraham

Rating: 3.5/5

RESULTS

West Asia Premiership

Thursday
Jebel Ali Dragons 13-34 Dubai Exiles

Friday
Dubai Knights Eagles 16-27 Dubai Tigers

Results:

5pm: Maiden (PA) Dh80,000 1,400m | Winner: Eghel De Pine, Pat Cosgrave (jockey), Eric Lemartinel (trainer)

5.30pm: Maiden (PA) Dh80,000 1,400m | Winner: AF Sheaar, Szczepan Mazur, Saeed Al Shamsi

6pm: Sheikh Zayed bin Sultan Al Nahyan National Day Cup (PA) Group 3 Dh500,000 1,600m | Winner: RB Torch, Fabrice Veron, Eric Lemartinel

6.30pm: Sheikh Zayed bin Sultan Al Nahyan National Day Cup (TB) Listed Dh380,000 1,600m | Winner: Forjatt, Chris Hayes, Nicholas Bachalard

7pm: Wathba Stallions Cup for Private Owners Handicap (PA) Dh 70,000 1,400m | Winner: Hawafez, Connor Beasley, Ridha ben Attia

7.30pm: Handicap (PA) Dh 80,000 1,600m | Winner: Qader, Richard Mullen, Jean de Roaulle

COMPANY%20PROFILE

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While you're here

David Powell: Thanks to Brexit, support for independence is growing among Scots

Damien McElroy: Johnson must take heed to Churchill's comments on Irish divisions

Gavin Esler: For British territories, Brexit will amount to being cut off from Westminster

All%20The%20Light%20We%20Cannot%20See%20

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