China Informed: a news service focused on China, Taiwan and Hong Kong

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Mon, Mar 17, 1997
PRC's Quest for Oil

also: news on Korean defector; web sites on Xinjiang and Uighurs; Taiwan buys missiles on the cheap; research information resources; and more . . .

Please read the statement of purpose.

Vietnam: an Inside China article reports that Hanoi has lodged a formal complaint with the Chinese embassy in protest against the presence of a Chinese oil surveying ship and support vessels in waters along the Vietnamese coast. Hanoi said, on March 7 the ships entered Vietnamese territorial waters along the continental shelf in what it characterized as its "exclusive economic zone" and moved down the coast, ignoring requests that they leave. Hanoi protested to the Chinese embassy on March 10. "Vietnam demands the Chinese side stop the operation of the Kan Tan III oil rig and withdraw it from the exclusive zone and the continental shelf of Vietnam," the paper quotes the official Vietnamese news agency.

A Chinese official quoted by the paper admitted that the boats were operating in the area and said that the problem stemmed from a lack of agreement in both countries on the actual definition of the border.

The whole area may be rich in petroleum, and like the disputed Spratlys islands---claimed by China and Vietnam as well as four other nations---the issue is a reminder of how dangers lurk not far below the surface of what is suppose to be a dynamic but peaceful sea of trade and commerce between the nations of Asia.

China currently produces 150 million tons of crude oil a year and is the sixth largest petroleum producer in the world. The major petroleum centers are the Daqing fields in Heilongjiang province, the Liaohe fields in Liaoning province and the Shengli ("victory") fields in Shandong province. Together the three produce 90 percent of China's petroleum output; other fields are located throughout north China, Xinjiang and elsewhere. It was in 1964 China declared itself self-sufficient in oil, and exports of the black gold brought in one quarter of the country's foreign exchange in those years.

But with the onset of economic reforms in the late seventies demand for energy far outpaced its supply. By 1993 China became on balance a net importer; oil is still exported to other nations, including Japan, which has been diversifying its sources of petroleum and looking to the mainland for supplies; Japan has even converted its refineries to handle the high-paraffin content of China's crude. Unless China can develop new sources of energy, it risks starving the motors of its economic progress.

Developments in the Tarim basin in Xinjiang have produced viable sources of oil and ongoing exploration hopes to locate more. But transportation problems in the region hinder these efforts, as oil from there must be trucked to refineries in China proper. Off-shore oil fields have proved disappointing, because they are quite fragmented and have poor geological structures. Of course efforts in these areas continue, as we can see from today's spat with Vietnam.

``The area where the Chinese prospecting vessel operates is located within the sphere of the continental shelf and exclusive economic zone in the northern part of the South China Sea which is upheld by China,'' the Hong Kong Standard quotes a spokesman for the Foreign Ministry in Beijing. The paper notes that the area in question lies between "the central Vietnamese city of Hue and the Chinese island of Hainan."

"China's oil operations legal" is a rather terse article by the official China Daily. "According to the United Nations Convention on Maritime Law, China is entitled to utilize such an area of the continental shelf and exclusive economic zone," writes the paper.

Korea: a report in the Korea Herald speculates North Korean defector Hwang Jang-yop may have been moved to the Philippines, where he will be kept until it is safer for him to move to Seoul. Inside China reports, however, Beijing and Seoul are keeping quiet on the whole matter. The paper also reports these rumours and suggests that Hwang may be moved to Subic Bay, home of an international free trade zone and airport and former home of a US navy base.

It is interesting Beijing has mounted a military presence outside the South Korean embassy in Beijing. Heavily armed guards vigilantly patrol and scrutinize anyone in the area and armored personnel carriers stand in waiting. Is Beijing afraid of a North Korean 'incident'?

Ethnic problems: we have some information today on a couple internet sites related to Xinjiang:

Taiwan: due to what might have been pressure from Beijing, a deal by Taiwan to purchase French shoulder-launched surface to air missles soured but the defense ministry was still able to purchase American ones at a significant savings over their 'list' price, reports Inside China.

Poland: the PRC and Poland are improving relations based on the Five Principles of Peaceful Coexistence, reports the China Daily.

Environment: new advances in cloning may prove important to the efforts by Chinese scientists to save the panda bear from extinction.

Research: the Asian Studies WWW virtual library is an excellent resource of information on all aspects of Asia, including China and greater China, and all types of information.

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China Informed

a news service focused on China, Taiwan and Hong Kong
©1997 Matthew Sinclair-Day