ABSTRACT
By 1997, the structure of China’s oil and petrochemical industry was divided
into four sectors, each of which was designated a major company in charge of its
own businesses. CNPC and CNOOC had dominant positions in onshore
exploration and production, and offshore exploration and production, respec-
tively. Sinopec was the principal refiner and petrochemical producer. Sinochem
was responsible for the import and export of crude oil and chemical products.
Petroleum sales companies at provincial and county levels were in charge of
selling petroleum products, especially retailing, in the domestic market. In 1998,
the Chinese government decisively supported the creation of two new vertically
integrated oil and petrochemical companies, the new CNPC and Sinopec. In the
following year, CNPC and Sinopec each undertook a fundamental internal
restructuring. The core productive assets were separated from the non-core
businesses. The core businesses were then grouped together into a joint-stock
company for international listing. From industrial reorganisation to company
restructuring, the whole process was completed in less than two years and
involved intense debate. This was a dramatic and immensely significant step in
the evolution of China’s industrial policy.
