Oil market reforms and pricing policy evolution in china

Crude oil is a key part of modern industry, and the establishment of the oil sector has significantly contributed to economic advances in China. Building from scratch, China established a comprehensive system, serving the massive demand arising from the country's phenomenal economic growth. The current system is the consequence of a series of reforms and the reforms continue. In this chapter, we review the history of China's crude oil market, paying special attention to the evolution of pricing policies. The current challenges in China's oil sector and possible solutions are also discussed, in view of the ever-increasing dependence on the international oil markets and complexity of the global oil system. A systemic perspective is needed in reviewing and evaluating the pros and cons of oil and gas market reform policies. The evaluation should be based on four major criteria: efficiency, social welfare, risk, and sustainability. Although most extant studies focus on only one of those criteria, a sound policy evaluation system should cover all these dimensions and assess major strategic decisions from a systemic perspective.