An empirical analysis on China´s oil vulnerability

In recent years, insufficient reserves, growing gap between domestic production and consumption, late implementation of strategic petroleum reserves and so on have made China more dependent on oil import and more exposed to uncertain developments in international oil market. Based on the illustration of detailed aspects of oil vulnerability facing China, this paper selects eight quantifiable individual indicators to comprehensively measure oil vulnerability of China for the duration of 1997-2008 by means of principal component analysis. Our empirical results demonstrate the following: (1) China´s oil vulnerability has been generally increased in recent years. (2) There are different relationships at different levels between China´s oil vulnerability and eight indicators. Finally, aiming at reducing China´s oil vulnerability, it suggests some corresponding policies and recommendations.