7/1/77

HONG KONG, Jan 6 (NYT). -China’ s oil production increased 13 per cent last year, the Chinese press agency said today, a claim that analysts here calculate gave China a total output of 84 million tons.

The increase was a sharp drop from the decade of speetacular annual rises of 20 per cent which China recorded through the first half of 1975. But the new figure is higher than the 10-per-cent growth in oil production Peking reported for the first six months of last year.

Analysts here believe this may indicate that after the overthrow of Chiang Ching and three other "radical" members of the Chinese Communist Polituro in October, the country’s new leaders have now returned to an emphasis on petroleum production. Before the bitter political quarrels of the past year, China appeared to be using its burgeoning oil industry for exports to help finance imports of technology.

Exports Drop

No figures are available yet for China’ s oil exports last year, but analysts believe they dropped to about 10 million tons from 12 million tons in 1975. Petroleum sales constitute China’s largest single source of foreign exchange and any reduction in oil exports therefore tends to make imports more difficult to pay for.

Whatever the exact total, this year’ s slowdown in the rate of growth of oil output suggests China is still far from becoming the oil giant rivaling Saudi Arabia that some U.S. and Japanese experts had forecast only a year ago. Predictions that China would be exporting 50 to 100 million tons a year by 1980 now are clearly invalid, and even a conservative estimate by the CIA of 27 to 33 million tons seems to be at the upper limit.

In addition, China’ s own consumption of petroleum is growing rapidly, particularly with the renewed stress on rapid industrial growth and the mechanization of agriculture which Peking’ s new leaders are now pushing.

By FOX BUTTERFIELD.