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Experts Urge Increase In Oil Reserve

China is currently facing an oil shortage as a result of its rapid economic development over the past two decades, and rising international oil prices. Chinese energy experts have suggested increasing the nation's oil reserve, to ensure the country's energy safety. 
 
Recently, the Shanghai Academy of Social Sciences, a think-tank for the Chinese government, submitted an annual report on China's international stance. One of their suggestions is increasing the nation's oil reserve.

Dr. Wang lingyi, a specialist on energy with the academy, says the increase is imperative.

"Nearly half of our country's oil consumption now relies on imports. If there comes a war, blockade or even just a rise in international oil prices, oil reserve will play an important role in maintaining social stability and growth. "

Last year, China's need for oil soared by more than 11 percent year on year, making it the world's second largest oil importer, following the United States. Statistics from the Ministry of Commerce show that consumption of crude oil will reach 270 million tons this year, with imports exceeding 100 million tons.

Taking into account the current situation, Dr. Wang Lingyi notes much needs to be done to ensure sufficient oil reserves.

"Firstly, our import strategy should have multiple points, not only looking to the Middle East. Secondly, relevant departments should take measures to ensure the safety of oil import transportation. Thirdly, the government should establish a special fund for oil reserves."

Dr. Wang adds the money could be collected through issuance of treasury bonds, financial allocation, and taxation. He points out even a tiny increase in oil tax, for example, one cent per liter, could mean an increase in annual tax revenue of 2.7 billion yuan.

To that end, Dr. Wang and his colleagues suggest that the country's top legislature enact a law on oil reserves, including establishing a special fund that supervises the use of oil reserves.
 
(CRI April 9, 2004)

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