(Bloomberg, Oct 19, 2006)-- China's spending on crude oil, gas and coal production jumped in the first nine months as the world's fastest-growing major economy expanded 10.7 percent.

Spending on petroleum and gas extraction rose 19.3 percent from a year earlier while investment in coal mines soared 36.4 percent, the National Bureau of Statistics said in a statement distributed in Beijing. Coal output rose 11.7 percent.

Demand for fuels to run power plants and metals for use in cars, buildings and machinery has soared, prompting China to intensify the search for resources at home and abroad. The nation's oil demand has almost doubled in a decade, contributing to record global prices as China increases crude imports.

``Supplies of energy resources remain constrained,'' Li Xiaochao, the bureau's spokesman, said in today's statement. ``Natural disasters were more severe during the period,'' Li said, after typhoons disrupted transportation links.

Retail oil and oil-product sales soared 37.1 percent during the nine months in the world's second-biggest energy user. Energy raw material prices rose 6.3 percent in the 9 months and 6.9 percent in September alone.

The nation spent 16.1 percent more on power, city gas and water provision between January and September, contributing to a 12.9 percent gain in electricity production.

`Good News'

The drop in global oil prices ``is good news for the Chinese economy,'' Li said at a briefing. ``Production costs would decline, and this also eases the burden of costs on consumers. It's good for the global and Chinese economies.''

Crude oil prices in New York dropped 25 percent since the record $78.40 on July 14. Oil is down 5.2 percent this year.

Oil consumption in China, the world's biggest user of oil after the U.S., will increase 6.4 percent this year to 7 million barrels a day, the International Energy Agency said in its October forecast. The nation imports about 40 percent of its oil.

Output of pig iron, or crude iron cast in blocks, increased 18.4 percent during the nine months and steel product output gained 23.7 percent.

China's summer crop output rose 7 percent from a year earlier to 113.8 million metric tons. Pork, beef and poultry output rose 4.1 percent to 56.7 million tons, the statistics bureau said.

Source:Bloomberg
tag:China energy oil