China's rapid rise to become the world's second-largest petroleum user has understandably raised concerns among the country's leaders about its ability to secure the oil supplies it needs to sustain the current economic boom. These leaders worry that the world has entered a prolonged period of tight energy supplies and high prices, and their response has been to send China's national oil companies on a multibillion-dollar global shopping spree for petroleum reserves. A much more efficient and less costly strategy would be to reform the state-controlled petroleum sector, open it to foreign investment, and integrate the country into the global system that supplies Japan, the United States, and other big energy consumers.

This growing appetite for oil is propelled largely by the new love of the emerging Chinese middle class: the automobile. In 2006 China became the world's second-largest auto market, with sales of more than 5 million vehicles. By 2015 more than 100 million cars could be plying the country's roads. Demand for gasoline and diesel fuel is likely to grow by 6 percent a year, and Chinese oil imports will rise from three million barrels a day at present to ten million barrels a day by 2020Ñas much...