China's Energy Demand May Start to Recover End 2008

By Wang Ying and Winnie Zhu

Nov. 18 (Bloomberg) -- Energy demand in China, the world's second-biggest oil consumer, may begin to ``pick up slowly'' at the end of this year or the start of 2009 because of the nation's 4 trillion yuan ($586 billion) economic stimulus plan.

The country's power demand will probably rebound at about the same time, Han Wenke, the head of energy research at the National Development and Reform Commission, the nation's economic planner, said in Beijing today.

Fuel demand has contracted ``sharply'' since September because of the global credit crisis, China National Petroleum Corp., the country's biggest oil company, said Nov. 15. China will invest the equivalent of almost a fifth of its 2007 gross domestic product by the end of 2010 after the economy expanded at the slowest pace in five years in the third quarter.

China's oil demand may rise 5 percent this year from 2007, Liu Keyu, deputy research head of China National, said today. The nation's oil demand growth may slow next year, especially in the first half, he said.

Han and Liu commented during a conference in Beijing organized by the International Energy Agency, the Paris-based adviser to 28 oil-consuming nations.

China's power production fell 4 percent last month, the first decline since March 2005, the National Bureau of Statistics said Nov. 13.

The country's oil demand is forecast to rise 3.7 percent to 8.2 million barrels a day in 2009, lower than last month's estimate of 8.4 million barrels a day, the IEA said in its November report. Consumption this year will increase 5.2 percent to 7.9 million barrels a day, which is about 60,000 barrels lower than a forecast last month.

To contact the reporter on this story: Wang Ying in Beijing at wang30@bloomberg.net; Winnie Zhu in Shanghai at wzhu4@bloomberg.net;