Recent Development of the Petroleum Industry in China
The petroleum industry was believed to be a strategic sector for the Chinese government. In the early years after establishment of the People's Republic of China, the industry was under control of the Bureau of Petroleum, a division of the Ministry of Fuel. With the accession to the World Trade Organization (WTO), China's oil prices will be more closely linked to those of the international markets, provoking a more urgent need for price reform. The restructured oil enterprises would implement a balanced development strategy by fully utilizing and improving the existing refining capacity as well as securing the long-run stability of crude oil. The 1998 restructuring made the oil industry one of the best-prepared sectors for the WTO accession, which required China to open its market to foreign competitors. The government intended to use market liberalization as an impetus to improve the efficiency of the oil industry. The central government believes petroleum is a strategic commodity.