Cosco is just one of Sinopecs recent clients. In August, the refiner beat five other Chinese and foreign lube companies to win over the Strait of Fuzhou Taxi Co., a regional state-owned taxi service provider based in Xiamen, Fujian province. The deal puts Sinopecs Greatwall-branded lubes throughout the taxi firms fleet.

Also in August, Chinas aviation administration started testing RIPP4061, Sinopecs lube for airplane piston engines, following Sinopecs application for certification. To date, Chinas airlines have only used foreign lube brands.

Did Sinopecs position as a government entity help it win these deals? Certainly, said Wang Xuguang, vice general manager at Handi Lubricant, the lube business of the Chinese private refiner Hainan Handi Sunshine. But a more determining factor in bids for big government contracts, he said, is quality.

Quality is the major concern when it comes to procurement. But for Sinopec, I believe its competitive enough to beat multinationals, Wang added. I think its a trend that multinationals will be eventually edged out of the procurement system of Chinese government and state-owned companies, especially of those projects with top national secrets, Wang said in a recent interview at his office in Beijing.

As protectionism becomes more popular in Western societies, he said, it is essential for China to build a sufficient self-supply chain for its major industries.

In August, the Shanghai Academy of Spaceflight Technology, a Chinese national security unit, contracted Sinopec to supply hydraulic oils for an aircraft manufacturing facility running what it said is the hydraulic machine with the worlds largest press.

For Sinopecs long-term competitor, China National Petroleum Corp., beating out multinational lubes was an internal issue. In August, its subsidiary in the northeastern city Jilin, which produces olefins and synthetic resins, announced that CNPCs Kunlun lubes accounted for 90 percent of the lubes and greases used in its facility. Prior to that, it had long been using imported lubes from suppliers including Shell, ExxonMobil and York Lubricants. In a statement, the Jilin subsidiary said Kunlun oils are of stable quality with competitive prices.

Thats contrary to the long-held belief that private Chinese companies prices are more competitive than those of state-owned suppliers. With the rise of a crop of capable Chinese private lube companies such as Tongyi Lubricants and Lopal Tech, are state-owned companies feeling threatened?

For Handis Wang, who used to work at Sinopec, the answer is no. Large state-owned companies usually have the global resources and adequate funds for product development to achieve better quality, he said. Private companies cant compete.

However, Zhang Chenhui, who used to work as a general manager at Sinopecs facility in Maoming, Guangdong province, did not agree.

A few private companies with reliable investors are quite resourceful, and they are willing to invest in research and development, said Zhang, who has also worked with many private lube companies as a consultant. More importantly, they can make quick decisions to meet clients demands. Such an advantage is important in a fast-changing market.

Personal connections are also helpful, Zhang added. A government-funded project could be divided into many small projects and outsourced to different parties, Zhang said. I think in this case there are plenty opportunities for qualified private companies that are well connected.