Gas Industry in China
Like most industries in China the oil and gas sector is dominated by a few companies all of which the government is a major shareholder in. This means that in large part the government has control over the industry. This partnership arrangement has worked well for them as they have been able to manage the countries energy resources very efficiently in order to allow for significant economic development.
In terms of oil China is currently the world's second largest user and also one of its largest importers. The oil reserves in China are not all that large so it is unlikely that they will be able to increase the amount that they produce. This will present a problem for the Chinese as more and more people move into the middle class. For the most part electricity can be produced in other ways however there is currently a huge demand for cars in China, they are the symbol that you have made it to the middle class. This has greatly increased the demand for oil.
Most of the oil that is imported into China currently comes from the middle east or Africa. In order to acquire this oil China has taken a different approach than that used by other countries, they are simply buying up the producers. The Chinese government is buying large stakes in the oil companies of most of the major producers in Africa and the middle east. They are doing this in an attempt to ensure that they will have access to supplies of oil. This strategy has been helped by the fact that the Chinese government are also providing both foreign aid and technical expertise to many of these countries.
While China is pursuing a strategy of buying up oil producers in other countries they are also working to reduce their demand. One way in which they are trying to do this is by using natural gas as an alternative. China has fairly large reserves of natural gas but actually uses very little of it. In large part this was because coal is so readily and cheaply available for power generation and because few of the cars that are imported into China run on natural gas.
The fact that the Chinese government is a major stakeholder in most large companies in the country will help with the switch to natural gas. One of the reasons that countries find it so hard to switch to alternative fuel sources for cars is that nobody wants to build cars that run on them until the fuel is widely available and nobody wants to make the fuel widely available until there are cars that run on it. This is not an issue in China since they can tell the car companies they own to make the cars that run on natural gas and the gas companies they own to make natural gas available as a fuel source.