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Govt eyes nuclear energy as oil price rises
March-11-2011

A senior energy official has warned the government to be "fully aware" of the risk of imported inflation as spreading uncertainty in the oil-rich Middle East and North Africa keeps driving up the global oil price.

Zhang Guobao, former chief of the National Energy Administration, also urged the government to speed up the research and development of alternative energy, especially nuclear energy, to reduce heavy dependency on the global oil market.

Talking with China Daily on the sidelines of the two sessions, Zhang, now vice-director of the Subcommittee of Economy under the CPPCC National Committee, said the recent unrest in Libya would not directly affect China's oil imports, as oil from the North African country only accounts for 3 percent of China's annual oil imports, standing at around 240 million tons in 2010.

Zhang also said that the division of power in Sudan is also unlikely to have a major impact on China's oil production there as China had made preparations for the split and enjoys good relations with both the north and the south.

However, as an alarming 55 percent of China's annual oil demand has to be supplied from overseas, Zhang warned that the surging global oil price would definitely increase imported inflationary pressures on China.

The Chinese government has been increasingly concerned by inflation since the consumer price index (CPI) rose to a record 28-month high of 5.1 percent in November.

Asian stock markets fell on Thursday in the face of higher oil prices as fighting in Libya intensified, fuelling worries that mounting inflationary pressure could bite into global growth.

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