APPENDIX B SYNTHETIC OIL PRODUCTION IN 1974 Almost all of China's synthetic oil is produced in Fu-shun, Liaoning Province and at Mao-ming in Kwangtung Province. The Fu-shun No. 1 plant produces at most 2 million tons of oil from shale each year; Fu-shun No. 2 plant produces another 800,000 tons.2 Mao-ming has a refining capacity of 2.5 million metric tons,' but it processes only a nominal amount of shale oil-perhaps only 200,000300,000 tons yearly. Thus China's total production of synthetic oil in 1974 probably did not exceed 3-3.5 million tons. PETROLEUM CONSUMPTION By Agriculture Jen-min jih-pao, Apr. 14, 1960* indicates that 5 million horsepower of internal combustion engines in the agricultural sector would consume 2.4 million tons of gasoline and diesel oil. Each standard unit of tractor shown in table 4 is equal to 15 horsepower. Expressing the tractor units given in table 4 in horsepower (a total of 0.369 million horsepower in 1957 and 7.275 million horsepower in 1973) and multiplying by 0.48 tons gives the petroleum consumed by tractors in those 2 years-177,000 tons in 1957 and 3.492 million tons in 1973. Applying the 0.48 ton figure to the data for pumps gives consumption figures of 110,000 tons in 1957 and 7.2 million tons in 1973. Assuming that tractors and pumps together accounted for almost all of the petroleum consumed by agriculture in 1957 and 1973, then total petroleum consumption in agriculture was 287,000 tons in 1957 and 10.7 million tons in 1973. This was 8.7 percent and 17.8 percent of total petroleum consumption in 1957 and 1973, respectively. By Households Niu Chung-huang, Wo-kuo ti-i wu-nien chi-hua shih-ch'i sheng-ch'an ho hsiao-fei kuan-hsi, Peking, Ts'ai-cheng ching-chi she, 1959, p. 57 gives household consumption of kerosene in 1957 as 190,000 tons-5.8 percent of total petroleum consumption in that year. By Transportation and Industry Yuan-li Wu, in his Economic Development and the Use of Energy Resource, in Communist China, New York, Praeger, 1963, p. 193, estimates that transportation and industry consumed approximately equal shares of the total petroleum supply in 1960. If we arbitrarily assume that the military consumed 5 percent of the petroleum supply, then the shares of transportation and industry can be estimated at approximately 40 percent each in 1957. By Military Arbitrarily assumed to be 5 percent in 1957. REFINING CAPACITY The Chinese have never given an absolute figure for total refining capacity. Some recent statements are: (1) "The oil-refining capacity added during the period 1960-69 was 8 times that (added) for the previous decade.” (2) "... China's oil-refining capacity in 1973 reached 3.7 times that of 1965. (3) "The present oil-refining capacity is nearly 4 times that of 1965."" 1 FBIS. Mar. 18, 1974, G-3. 2 Hydrocarbon Processing, April 1974, p. 107. Kwang-ming jih-pao, Oct. 19, 1971, p. 2, reported a 150 percent increase in capacity at Mao-ming. Initial capacity was 1 million tons (Yuan-11 Wu, op. cit., p. 183) and no further expansion occurred until the early 1970s. Translated in JPRS: 6389, Dec. 12, 1960, pp. 58-59. FBIS, Sept. 5, 1973. B-11. FBIS, Sept. 20, 1974, E-5. FBIS, Jan. 3, 1975, E-10. Assuming that 2 million tons of refining capacity were added in 1950-59, capacity at the end of 1969 can be estimated at approximately 18 million tons.* Given the nature of the data, this is no more than an approximation. Capacity estimates for 1973 and 1974 can be derived by taking the latter two statements and assuming (1) that China possessed the capacity to refine the 11.1 million tons of crude oil produced and imported in 1965, (2) that transportation and handling losses were 4 percent, and (3) that refineries ran at 89 percent capacity. The figures derived are 44.4 million tons of capacity in 1973 and 47.4 million tons in 1974 (where "nearly 4" is 3.95). 1 Data for 1950-54 were derived from data in M. I. Sladkovskiy, "Ocherki Ekonomicheskikh Otnosheniy SSR s Kitayem" (Moscow, 1957) translated in JPRS: 1384-N, Mar. 23, 1959, pp. 26 and 56. Those for 1955-59 are from K. C. Yeh, "Communist China's Petroleum Situation," Rand Corp. memorandum RM-3160-PR, May 1962, p. 43. The remaining data were taken from various issues of the U.S.S.R. "Trade Handbook." 2 "Petroleum Press Service," March 1965, p. 89. 3 Republika Popullore e Shqiperise, Drejtoria e Statistikes, "Vjetari Statistikor i R. P. Sh 1965" (Tirane, 1965), p. 318. No data are available for Albania after 1964. The closing of the Suez Canal in mid-1967 sharply curtailed both Albanian and Romanian exports to China. For the years 1968-73, I assume that Albanian crude exports regained their previous peak in 1968 and increased by 5 percent annually in subsequent years. "Suez Canal Report," 1963. "Suez Canal Report," 1964. 7 Republica Socialista Romania, Directa Centrai 1973," p. 76. Statistica, "Comertul Exterior al Republicii Socialiste Romania • Romania's exports to China during 1967-69 and 1973-74 are unavailable. The figure shown for those years is the average of the figures for 1970-72. United Arab Republic, Central Agency for Public Mobilisation and Statistics, "A.R.E. Foreign Trade 1970," p. 240. 10 United Arab Republic, Central Agency for Public Mobilisation and Statistics, "A.R.E. Foreign Trade 1971," p. 240. 11 China apparently stepped up imports from the Middle East in 1974. In July an African tanker unloaded oil at Ch'anchiang in South China (FBIS, Sep. 24, 1974, H-1); in August the newly purchased T'ai-hu (formerly the Beauregard) unloaded 60,000 tons of oil at Ch'an-chiang (FBIS, Sept. 12, 1974, H-6). Assuming that China imported Middle Eastern oil at the rate of 60,000 tons a month, imports from the Middle East would have been 720,000 tons in 1974. I have rounded this up to 800,000 tons. 12 United Arab Republic, Central Agency for Public Mobilisation and Statistics, "Monthly Bulletin of Foreign Trade, January/December 1968," p. 366. 13 Following the closing of the Suez Canal, China began to import small but growing quantities of crude and products from the Middle East. I have arbitrarily set these unknown imports at 100,000 tons in those years when no other data are available. Note: Since the 1950's, China has also imported negligible quantities of various petroleum products from countries not listed in the above table. 8 The Lan-chou refinery, which accounted for almost all of the capacity added in the 1950s, was planned to reach a capacity of 2-3 million tons in 1959 (Wu, op. cit., p. 186). However, in June 1957, it was reported that "Two years from now, when production goes into full swing, the Lan-chou refinery will process 1 million tons of crude oil annually" (Chinese International Service, Peking. June 28, 1957). Hence, it would appear that no more than 2 million tons were added to capacity in 1950-59. 1957: "Ti-li Chih-shih," 10, 1958, p. 458. NCNA, Peking Oct. 25, 1957, gives daily output at 1,800,000 m3 (657,000,000 m3 on an annual basis); I assume this to be the rate as of the end of the 3d quarter and use 600,000,000 m3 for the year. 1962: NCNA, Ch'eng-tu, Oct. 7, 1963, in SCMP, 3078, p. 18, reported output in Szechwan as 17 times that of 1957. 1963-65: Estimated to grow at 17 percent annually, the average rate reported for 1965–72. 1972: NCNA, Ch'eng-tu, Sept. 16, 1973, reported that output in 1972 was 3 times that of 1965. 1973: Estimated to grow by 3.3 percent, the average rate for 1972-74. 1974: JMJP, Jan. 15, 1975, p. 3, reported that output (in 1974) was 3.2 times that of 1965. Other: The estimating procedure for 1974 is somewhat convoluted; it should, however, give a minimal reasonable production figure for production outside Szechwan. National production of natural gas grew by "nearly" 15 percent in 1974 (FBIS, Jan. 3, 1975, E-10). If we assume that all of China's natural gas in 1973 was produced in Szechwan, then national output in 1974 would be at least 58.15 bcm (50.61 bcm growing by 14.9 percent-nearly" 15 percent). Since we have an output figure for Szechwan in 1974, we can subtract it from estimated national output to obtain production outside Szechwan. This gives a figure of 5.87 bcm--a minimal figure, since we assumed no production outside Szechwan in 1973. To derive a more reasonable figure, we proceed as follows: National output in 1974 was reported as more than 3 times that of 1965 (FBIS, Jan. 3, 1975, E-10). Arbitrarily assuming this to be 3.3 times, the average annual rate of growth for 1965-74 was approximately 14 percent or roughly the same rate of growth as in Szechwan. If growth (outside Szechwan) was 14 percent in 1974, then output (outside Szechwan in 1973 was 5.15 bcm (5.87 bcm divided by 1.14). Adding 5.15 bcm to the 50.61 bcm produced in Szechwan gives us a national total of 55.76 bcm for 1973. Since national output grew by 14.9 percent ("nearly" 15 percent) in 1974, output in 1974 would be 64.07 bcm. From this figure, we arrive at a figure of 11.79 bcm for areas outside Szechwan. This appears to be a more reasonable figure than the 5.87 bcm which assumes no production outside Szechwan in 1973. Actual output outside Szechwan in 1974 may lie between 5.87 bcm and 11.79 bcm, making national output between 58.15 bcm and 64.07 bcm. These estimates raise several questions. They imply that Szechwan produced, from natural gas alone, 15.2 percent of the primary energy produced in all of China. None of this is shipped outside the province. Szechwan industry produces only 5 percent of the national industrial output; its population, on the other hand, accounts for about 11 percent of the national total. Since Szechwan also produces some coal and hydroelectric power, and a small quantity of oil, by implication a considerable portion of the gas "produced" is lost through leakages during transportation. The share of natural gas of primary energy consumed, versus produced, probably is much smaller. CHINA'S IRON AND STEEL INDUSTRY By ALFRED H. USACK, JR., and JAMES D. EGAN 1. China: Major Iron and Steel Resources and Facilities _ _ TABLES Page 264 265 266 268 270 272 273 273 274 277 278 278 278 280 282 284 285 267 1. China: Production of Iron Ore, 1949–74_- 2. China: Estimated Requirements for Coal and Coke by Iron and Steel Industry, 1949–74. 6. China: Foreign Trade in Iron and Steel Products, 1950-74 279 7. China: Production and Consumption of Finished Steel, 1949-74- 283 285 I. SUMMARY AND CONCLUSIONS In its first 25 years, the People's Republic of China has made rapid progress in developing the key iron and steel industry. With the help of the Soviet Union, a number of large iron and steel bases were developed in the 1950's. Since then, advances have been made on the basis of China's own efforts and selective help from non-Communist countries. Some new technology has been introduced-particularly the basic oxygen furnace which has increased production efficiency-and the quality and variety of steel products have improved. Annual production of crude steel is now in the neighborhood of 25 million metric tons, making China the sixth largest producer in the world. China has the potential for a much larger iron and steel industry. Three factors have been holding back development: China's domestic resources of iron ore and coal, although plentiful, are of a low quality and must be given special treatment. Beneficiation technology, now in use in foreign countries, will enable the PRC to treat native materials and to ultimately operate a large steel industry entirely on its own resources. However, China has been very slow to invest in beneficiation. This has seriously retarded iron production capabilities. The Chinese had not yet trained a fully competent work force when the Soviet technicians were withdrawn in 1960. They still lack the organizational and technical expertise to provide a balanced structure to the industry and to develop new techniques on their own. Technical assistance has been provided by Western countries and Japan but the unwillingness of the Chinese to accept large numbers of foreign technicians has reduced its effectiveness. Capital shortages in the general economy have led to imbalance in the iron and steel industry. For example, the mining sector has been allocated a minimum of capital forcing it to operate in a labor-intensive fashion. That was adequate while the industry was small but the industry has grown until the demand for ore cannot be met without an infusion of capital. In fact, substantial amounts of iron ore and pig iron have been imported in recent years to meet demand. Finishing facilities also have not kept pace with crude steel output, and a large tonnage of finished products must be imported. The Chinese are moving to correct these deficiencies, mostly through imports of modern capital equipment. Mining and ore beneficiating equipment and a large steel finishing facility have been purchased in the last few years. Installation of this equipment will take several years, and demand for steel products will meanwhile continue to rise. Therefore, the present imbalances probably will persist through the 1970's, with output rising at only a moderate rate. Beyond 1980, progress in the industry will depend on how rapidly the PRC improves its own capability to produce the needed machinery and equipment and how willing it is to devote large amounts of foreign exchange to pay for steelmaking equipment and technology. II. INTRODUCTION Although the Japanese and West Europeans had built iron and steel plants in China, most of these were damaged or destroyed by the time of the Communist takeover in 1949. More important, the facilities had been built and managed by outsiders, so the Chinese had practically no experience when they undertook the task of building an integrated iron and steel industry. The USSR provided a lot of help in the 1950's but the premature withdrawal of Soviet technicians in mid-1960 set the Chinese back a number of years. Since 1960, Mao's great political and social campaigns have continued to interfere with development of the industry. Analysis of the industry is complicated by a dearth of information, especially since 1960. We are particularly short of solid information on the extent of resources and their development. Before 1958, Peking released statistics on most economic sectors in various publications but nowhere provided a comprehensive set of statistics or precise definitions of the statistics presented. The exaggerated statistics of the Leap Forward era (1958-60) help to confuse the picture. Output during this period, especially the product of the small plants, simply is not comparable in quality to output before or after. The Chinese con 51-174 O-75 - 18 |