Challenges in Reducing Oil Refining Overcapacity in China

The phrase “establish the new prior to dismantling the old” could serve as a symbol of China's ongoing struggle to tackle its industrial overcapacity, particularly in the oil refining sector.

Provincial Response to Overcapacity

Among the regions grappling with excess refining capacity is Shandong, a central hub for China's numerous small-scale refiners. These independent entities, which account for a significant portion of the nation’s refining capacity, are barely making profits.

The Anti-Involution Movement

In an effort to combat severe competition within the oil sector, Beijing has initiated what is referred to as the anti-involution campaign. This strategy primarily targets these small refiners, often termed 'teapots,' due to their hefty share of the national oil refining capability.