Technical self-sufficiency, pricing independence: a Penrosean perspective on China’s emergence as a major oil refiner since the 1960s

Abstract

International embargos and the withdrawal of Soviet technical expertise had by the early 1960s effectively engrained China's approach to energy and technical self-sufficiency. Chinese officials cited reasons similar to those advanced by Edith Penrose in her critique of the international oil companies (IOCs) investments. Drawing on Penrose's approach this paper shows that although self-sufficiency led to significant progress in primary capacity, self-sufficiency had to be reconciled with increasing demand for more complex petrochemicals. Modernization increased China's reliance on the IOC's technology and reduced pricing independence, confirming a historical regularity in the market imperfections underpinning the power of the IOCs.

Integration and Isolation in the Global Petrochemical Industry: A Multiscalar Corporate Network Analysis

“…For example, of the seventy-one locations in Sinopec's network, on average only 18 percent were shared with other corporations. This illustrates China's aim of selfsufficiency going together with a focus on consolidating a national (or regional) corporate network (Tobin 2019).…”