China and the United States have ample room to step up energy cooperation, which is the best option for the US to reduce its trade deficits with China, said China Petroleum and Chemical Industry Association Vice-President Fu Xiangsheng.
While China is a manufacturing powerhouse, its petroleum-and-chemical industry is still at the middle and lower end of the industry's value chain. Therefore, China has tremendous demand for high-end petroleum products imported from the US - the world's largest producer of petroleum and natural gas -Fu told the two-day forum "US-China Trade and Economic Relations: What Now, What Next" in Hong Kong on Tuesday.
China is the world's largest importer of petroleum products and natural gas, imports of which jumped 10.1 percent and 31.9 percent, respectively, last year. In 2017, China was already the second-largest market for US petroleum exports.
At the same time, US exports of petroleum products and natural gas saw the fastest growth rateworldwide. The International Energy Agency predicts that, in the next five years, new petroleum production in the US will account for 70 percent of the world's total new production; while its new natural gas production will make up 75 percent of the world's total new production in the same period.
"The two countries have tremendous space in complementing energy collaboration, and strengtheningcooperation in the petroleum and natural gas sector is the best option for the US to slash its trade deficits with China," Fu argued.
Both countries also have plenty of opportunities to cooperate in the new materials and high-end chemical products industries.
"Although China's petroleum-and-chemical industry is the world's biggestin terms of production volume and product value, the industry, nevertheless, is still at the middle and low end of the value chain of the sector compared to the US," Fu pointed out. "Most of the petroleum and chemical products in China still belong to the category of basic chemical products, while high-end products still need to be imported."
As China is the world's manufacturing powerhouse, it has huge demand for high-end chemical products sourced from the US so that these could complement the basic chemical products at the lower end of the value chain of the Chinese petroleum and chemical industry.
"As China-US trade frictions linger on, the growth rate of Chinese imports of petroleum products and natural gas from the US had both slumped tremendously in 2018. Hence, the Chinese and US petroleum and chemical industry players are eager that both countries can reach a mutual beneficial trade deal as soon as possible," Fu said.