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The issue of ethylene raw materials will become prominent. The ethylene industry is an industrial sector that uses chemical light oil as raw material to produce three major types of synthetic materials and various organic chemical products. At present, the ethylene industry in Europe and the United States has reached maturity, while developing countries including China are in a phase of industrial upgrading characterized by intensive operations. Expected demand growth will exacerbate the supply-demand imbalance. In 2005, China’s ethylene production capacity was 7.55 million tons, ranking it third in the world. Compared to 2000, China’s ethylene production capacity has increased by 69.7% over the past 5 years, with an average annual growth rate of 11.2%. Nevertheless, the self-sufficiency rate for domestic ethylene remains low, at 40.3% in 2005. Although this represents an increase of 4 percentage points compared to 36.3% in 2004, it is still 5.3 percentage points lower than 45.6% in 2000. Over the past 15 years, China’s ethylene consumption has experienced rapid growth, with annual equivalent consumption increasing by 16.1%, while GDP grew at an average annual rate of 9.3% during the same period; thus, the growth rate of ethylene consumption was much higher than that of GDP. “During the 11th Five-Year Plan period, China’s demand for ethylene is expected to continue growing at a rapid pace. With the rapid development of the tertiary sector, China’s economic structure will undergo significant changes, and the growth rate of demand for ethylene will gradually slow down in the later stages of planning. Therefore, during the 11th Five-Year Plan period, the supply-demand imbalance of ethylene in China is set to worsen, and expanding production capacity has become an important guiding principle of the Plan. Capacity expansion is planned, and raw material issues will become prominent. During the 11th Five-Year Plan period, China will continue to increase its ethylene production capacity through upgrades, expansions, and new constructions. By 2010, the ethylene production capacity was increased by 4.38 million tons through the renovation or expansion of existing plants. Seven new ethylene projects, including Nanhai Petrochemical, will be built, increasing ethylene production capacity by 6.2 million tons. By 2010, three major ethylene production areas had emerged: the Yangtze River Delta, the Bohai Sea region, and the Pearl River Delta, accounting for over 60% of the country’s total production capacity. At the same time, large-scale ethylene production bases have been established in central and western regions such as Xinjiang, Gansu, Sichuan, and Hubei. Chemical light oil is a key raw material for ethylene production. Influenced by the development of related industries, the demand for ethylene and chemical light oil in China grows at a faster rate than that for refined petroleum products. Meanwhile, the ratio between the production of chemical light oil and refined petroleum products is constrained by the refining industry. Therefore, the expansion of production capacity during the 11th Five-Year Plan period will further exacerbate the bottleneck issue in the supply of raw materials for the ethylene industry. Expanding raw material sources and optimizing the structure are key. Oil is both an important energy source and a vital chemical raw material. At present, about 60% of China’s crude oil is used in the production of refined products (gasoline, coal oil, diesel), and around 75% of these refined products are used in transportation. In 2004, the consumption of gasoline by cars and motorcycles across the country accounted for 95% of total gasoline consumption, while the transportation sector’s consumption of diesel accounted for 58% of total diesel consumption. Demand for automotive gasoline is expected to increase by about 50% in 2010, with transportation accounting for 70% of the demand for diesel. In contrast, in 2004, the share of chemical light oil consumption in China’s total oil consumption was very low, at around 8%, while its share of crude oil processing volume was about 9%. With the development of the domestic economy and the increasing demands for industrial structure upgrading, China’s demand for ethylene and p-xylene will continue to rise in the future, which in turn will increase the demand for chemical light oil. As a result, the supply-demand imbalance will further intensify. Experts predict that China’s demand for chemical light oil will reach 58 million tons in 2010 and 95 million tons in 2020, with annual growth rates of 15.2% and 10.4% respectively during the 11th and 12th Five-Year Plans periods. The chemical industry features a long industrial chain and high added value, and it has a significant impact on related industries; therefore, limited oil resources should be prioritized to support the development of this industry. With a constant amount of crude oil, reducing the proportion of oil used for transportation can enable the ethylene industry to obtain more light chemical oils for its development. Therefore, in the future, our country should intensify the adjustment of its energy consumption structure, swiftly implement strategies for replacing oil with alternative fuels, use fuels that can replace oil as much as possible in the transportation sector, and optimize the structure of oil consumption. Furthermore, from a corporate perspective, there are also many ideas for increasing the sources of ethylene raw materials. For example, efforts should be made to enhance the comprehensive utilization of resources such as light oil and condensate that are produced alongside oil and gas; significant investment should be allocated to the development and implementation of technologies for increasing the production of light oil used in the chemical industry as well as for finding alternatives to it. Technologies for producing ethylene and propylene from heavy feedstocks should be promoted actively, and domestic companies should be encouraged to go abroad to establish factories there, either on a wholly owned basis or through joint ventures.