Further, through the bilateral WTO agreements signed in 2000, China has agreed to increase foreign access to its energy markets in a phased series of reforms that will be implemented over a five-year period after WTO accession. Still, despite these significant improvements, there remain important obstacles to the effective development of Chinese energy industries and to the foreign investment that will be required to speed this development. Second, despite this increased openness, foreign access to local capital markets for energy and infrastructure projects still lags. Third, major new initiatives at reform and liberalization in the energy sector are incomplete. Looking to the future, the government will also have to strengthen impartial supervision and regulation of China's newly privatized and privatizing energy companies, which have enormous market power in their respective principal markets.
China is the world's third largest oil consumer after the United States and Japan.
Over the next decade, China will be the world's fastest growing regional oil market, with average annual demand growth of 4.7 percent between 2000 and 2010. Natural gas will also see dramatic growth, averaging 9 percent demand growth per year to 2010. China already has the world's second largest installed base of electric power generation capacity, and electricity demand is set to rise at an annual average rate of nearly 7 percent over the next decade. In the midst of this rapid development, China is also attempting to put its energy sector on a commercial footing. The twin goals of development and reform will be greatly facilitated by increased foreign investment.