The International Market Power Of China's Oil Market:Theoretical And Empirical Research

As sustained and rapid development of domestic industry,China has became a major country of oil consumption and imports gradually.Nowadays,the world is living through close economic and trade exchanges increasingly,the importance of China's oil trade is continuously strengthened.This paper uses lots of tables to show that the imports of China grows quickly,external dependency is increasing year by year.At the same time,oil exploration technology and energy utilization became inefficiency.Besides,other domestic factors and complicated international oil market environment lead the future of China's petroleum import trade to be a big "hidden trouble" of China's energy security.What's more,Our nation's risk of oil import is increasing with the growing oil import.It pushed us to disperse risk by using Scientific and reasonable method.It turns out that a country with market power will be more proactive in pricing power,and in import market,a stronger price maker will protect the security of oil import(a powerful engine that drives economic growth)better.This paper is full of significance,on one hand,it makes the measurement of Chinese oil import market power.On the other hand,it can enhance the international competitiveness of China oil industry,insure the safety of oil import and obtain more and more China's oil trade interests.From the point of distribution,the regional distribution of oil markets are very unequal,which contributed to the degree of frequent oil import and export trade between countries.In the Middle East,Africa,South America and the former Soviet union,those districts are major oil exporter whit huge profits.North America,Europe and the Asia-pacific region are main oil imports,especially in Asia,excess oil demand intensified year by year.Based on the supply and demand of economics theory and the theory of market power theory,combined with the current status of China's oil import market,this paper tried to use the method of empirical analysis to measure market power on the current China's oil import market.In constructing econometric model,analyzed by China's crude oil imports in 2014 statistical data,China's crude oil import sources are mainly concentrated in six countries below,Saudi Arabia,Angola,the Russian federation,Oman,Iraq and Iran.Combined above countries with China,the panel date presented in this paper,and such the exquisite selection of oil imports,exchange rate,the consumer price index,explanatory variables,help us to measure the import market power accurately.Expected as a negative number,elasticity of demand for the remainder of the model,the basic econometric model of regression coefficient for the rest of the elasticity of supply,can be used to represent China's market power of buyer in China's oil import.Thus from the regression analysis results,four regression results of econometric model shows the six countries of China's oil remaining supply of regression coefficients were significantly positive,all the coefficients are significant at the 1% confidence level.It shows that the explanatory variables(petroleum imports)changes with oil import prices in significant positive correlation,the empirical results show that the increase of oil imports will cause a higher oil import prices in oil import market.From the results of regression analysis,China's oil import demand exists significantly rigidity.Oil import market power obviously is at a disadvantage situation in the international market.Lack of market power means China's oil trade is aphasic,and the lack of that kind of voice will most likely lead to the international position of China's oil industry become missing when our nation contact with others.The paper holds,to some extent,it is mainly influenced by the domestic situation and international environment on many aspects,but in essence it is mainly caused by the result of all game stakeholders around the world.In addition,the empirical results show that there is no market power(or market power is weak)on international oil import market in China.Compared with western oil power market,obviously China is at a disadvantage position.Besides,Oil imports deviates with other industries on the so-called "big nation effect".The abnormal phenomenon " more to buy more expensive" is existence.This suggests that the current market is a twisted and controlled market,and in terms of the market system itself,it need to be improved in emergency.We thought factors like the insufficiency of China's strategic oil reservation,the demand for high rigidity and oil financial system of the yuan is not perfect enough caused the deficiency of China's oil import market power.Based on this,this paper puts forward a series of effective promotion strategies,such as the oil trade using local currency settlement,reducing the domestic oil demand rigidity,establishing a diversified pattern of oil imports,improving the strategic oil reservation,improving the oil futures market.All this is to improve the market power of China's oil imports.