Recent analysis of global energy and minerals markets has focused heavily on China’s role as an importer of extractive resources, and China is certainly a major net importer with an increasingly influential role in world markets.  But China is also a sizeable minerals producer in its own right—as would be expected of a country of such immense landmass—and has a striking diversity of resources.

With 14.8 billion barrels of proven reserves, China holds just over 1% of the world’s oil and ranks ahead of such recognized producers as Mexico, Brazil, Algeria and Angola.  Its 2.46 billion cubic meters proven gas reserves are a comparable percentage of world totals and place China just ahead of Malaysia, Norway and the European Union, and just below Australia. China’s share of global coal supplies (13.9%, or 114.5 billion tons) place it behind only the United States and Russia.

While these reserves figures are significant, China accounts for an even greater share of the production of these resources, with 4.9% of the world’s oil production, 2.8% of natural gas production, and an enormous 45.6% of total coal production.¹  In addition to coal, China was also the leading producer of aluminum, antimony, barite, bismuth, fluorspar, gold, graphite, iron and steel, lead phosphate rock, rare earths, talc, tin, tungsten and zinc in 2008, and it ranks among the top three producers in many other minerals.

China's oil imports in 2009 averaged 5.127 million barrels per day, and gas imports averaged 7.63 billion cubic meters. Imports of mined minerals in 2008 were $231.1 billion, an increase of 59.2% from 2007, and mineral exports increased 43.8% to $14.7 billion.  Natural gas still represents a relatively minor share of China’s energy consumption (3.7% in 2009, according to BP), but the Chinese government plans to expand the role of natural gas in China’s energy mix.

Mining in China is dominated by state-owned companies (which are either owned by the central government or provincial governments), but a number of international and privately-held Chinese companies are also active, and their relative share of Chinese extractive activity is increasing.

With respect to petroleum extraction, China’s National Oil Companies (NOCs) hold near absolute control over onshore development, but foreign companies have entered a number of Production Sharing Agreements for offshore deposits, including Conoco Phillips, Shell, Chevron, BP, Eni and others.  Private investment is generally only allowed in the context of highly complex operations where Chinese NOCs are unable to mobilize needed investment and technology, but foreign companies must partner with a domestic firm—generally one of the major NOCs.  Many offshore projects and some gas projects fit into this category, but the bulk of the Chinese industry is dominated by its NOCs.

China’s two major NOCs, China National Petroleum Corporation (CNPC) and the China Petroleum and Chemical Corporation (Sinopec) exercise a great deal of influence over China’s oil sector as a whole, both upstream and downstream, and CNPC, Sinopec, and China National Offshore Oil Corporation (CNOOC) together are responsible for 90 percent of China’s oil and gas production.²  In recent years, they have increasingly turned their attentions overseas in an effort to meet growing demands for imports of oil, a development that has been the subject of much interest and debate within the international community.³

1. This implies, of course, that China is depleting its resources at a faster clip than the rest of the world, on average.
2. Sinopec was created from assets of the Ministry of Chemical Industry and the Ministry of Petroleum Industry in 1983, while CNPC was created from the Ministry of Petroleum Industry in 1988. The two companies became vertically integrated firms through an asset swap in 1998.
3. Report sources include BP Statistical Review, 2009; USGS, 2008; OECD, 2009; EIA, 2009 (all pdf); and Shi, D. (2005). "Energy Industry in China: Marketization and National Energy Security." China & World Economy 13(4): 21-33.