$15 billion market gets ready for foreign competition...
China is working on new regulations aimed at giving multinationals such as Exxon Mobil immediate access to the country's jet fuel market when it opens fully to foreign competition, said Yang Yuanyuan, director of the Civil Aviation Administration of China (CAAC).
State-owned China Aviation Oil Group Corp, the parent of Singapore-listed China Aviation Oil (Singapore) Corp Ltd (CAO), holds a monopoly over the jet fuel market at present. But China promised as part of its World Trade Organization entry commitments to open its retail jet fuel market to international investors by the end of 2005, and the wholesale market by the end of 2006. "As the industry grows, we have to amend the policy in this regard. We will try to finish relevant legislation before 2007," Yang said. He said China Aviation's monopoly will be broken and that the government is speeding up the amendment of relevant regulations to facilitate the opening of the market.
Foreign jet fuel companies are currently allowed access to the China market by taking minority stakes in joint ventures with domestic firms, but in reality the wholesale and retail jet fuel market is monopolized by China Aviation Oil Group Corp. The government is also studying plans to further restructure the domestic aviation service industry to cope with the imminent competition from their foreign counterparts, Yang said. China's jet fuel market is currently worth about US $ 15 billion a year and has been rising at an annual average of 15 percent, industry observers said.