Oil demand to rise in China, says CTO of Saudi Aramco

Ahmad Khowaiter, Chief Technology Officer, Saudi Aramco

Editor's note: At the World Economic Forum's three-day meeting in Dalian, Liaoning province, China's economic growth is once again in the spotlight. More than 1,700 participants from 90 countries are attending "Summer Davos", opening on Wednesday, to chart a new course for growth as global recovery sinks into uncertainty. Before the conference began, business leaders from international companies shared their opinions with China Daily about China's economic prospects and what strategies they may take to readjust to the nation's new normal of growth.

Here are the excerpts from the interview:

1.Economic slowdown pressures have increased in China since the second half of 2014. During the first six months this year, GDP growth has fallen below 7 percent, while deflation pressures have risen in the manufacturing sector. Against this backdrop, what are the challenges that you have faced/continue to face in China, especially with regard to the business development strategy and actual operations?

Companies like Saudi Aramco make investments in the upstream and downstream oil and gas industry that take many years to complete and provide products to our customers for many decades. In our industry having a very long term perspective is essential. While there are certainly challenges in managing the short term business and economic issues facing China today, we are still very optimistic that the energy needed to fuel China's economic growth will continue to increase.

We believe there is great potential for us not only to supply energy in the form of crude oil to China but also to invest in converting this into useable fuel and petrochemicals products by investing locally in these industries. I should also note that we seek to ensure the investments we make improve the overall efficiency of the industry and have a minimal impact on the environment.

While the percentage GDP growth rate may low by historic Chinese standards; growing the world largest economy at 7 percent per year is still very impressive. We remain very positive about the future growth prospects of China and our business there.

2.How do you see the economic reforms unraveling further in China? What do you think are going to be the key takeaways from the ongoing reforms for your business?

Over the last three decades we have witnessed the reform process in China lead to the rapid economic growth that has positively impacted one sixth of the world's population. It is generally accepted that further economic reforms that support the adoption of advanced technologies and management techniques to promote efficiency and improve costs while protecting the environment will be needed to unlock the next stage of China's economic development.

Adopting reforms to encourage the right economic outcome through thoughtful regulation and positive incentives will be a challenge. In general, we believe promoting open and fair access that encourages competition, while making sure that social and environmental regulations are fully complied with will help China efficiently transform its economy over time.

Fortunately, China's leadership has a very good track record of making reforms that lead to positive economic and social outcomes.