Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on January 19, 2015
Plunging oil prices won’t solve China’s economic problems
Falling oil prices are typically seen as great news for major energy importers, but even rock-bottom prices won’t be enough to lift China’s economy out of its current malaise.
China is the world’s largest net importer of oil, and plunging crude prices should cut costs for consumers and businesses. It is also expected to help keep inflation under control and give China’s central bank room to lower interest rates.
“The sharp reduction in world oil prices will help to provide a stimulus to Chinese GDP growth in 2015 and reduce China’s oil import bill, boosting Chinese net exports,” wrote IHS Asia-Pacific chief economist Rajiv Biswas in a research note.
Lower crude prices may also give the central government greater flexibility to pursue fiscal, financial, land and household registration reforms, according to a report by Bank of America Merrill Lynch.
But China is facing a bevy of longstanding economic risks, such as escalating debt levels and a waning property market, that are likely to overshadow gains from lower oil prices. Recent corporate defaults in the real estate sector have only added to concerns.
Analysts say relief will be temporary and a major boost to China’s GDP is unlikely. Economists surveyed by CNNMoney are expecting a ho-hum fourth quarter to round out the year, and growth in 2015 is expected to slow further to around 7%.
“Given no evidence of a sharp and sustained improvement in demand growth on the horizon, the boost from lower oil prices will be washed out by the many persistent and growing challenges China faces,” said IHS China economist Brian Jackson.
Overall, Asia remains the biggest global winner as oil prices continue to tumble. The slump in prices represents an estimated transfer of around $1.5 trillion from global oil producers to oil importing countries, according to IHS.
South Korea is getting the largest boost to its economy, followed by Thailand and the Philippines, according to Bank of America Merrill Lynch.
13 Comments on "Plunging oil prices won’t solve China’s economic problems"
Plantagenet on Mon, 19th Jan 2015 6:55 am
Poor China. Their GDP growth rate has fallen to a mere 7%
Rodster on Mon, 19th Jan 2015 7:49 am
“Plantagenet on Mon, 19th Jan 2015 6:55 am
Poor China. Their GDP growth rate has fallen to a mere 7%”
Umm, poor China’s GDP was NEVER near that in the 1st place. In fact when China was claiming 7% GDP growth, it was really 2-3% GDP growth. I guess the saying is true: “It goes to, show how figures lie and liars figure”. 😛
Davy on Mon, 19th Jan 2015 8:13 am
China’s stock market is down almost 8%. The storm is brewing get ready.
bobinget on Mon, 19th Jan 2015 10:08 am
“China’s stock market is down almost 8%. The storm is brewing get ready”
Fearing a stock marker bubble Chinese regulators closed in on major brokers for abusing margin
rules.
http://www.bloomberg.com/news/2015-01-19/china-s-stock-index-futures-plunge-on-margin-trading-suspensions.html
BTW, if a market goes up 50% then drops eight it’s still up 42%
It’s no time to take up a collection.. just yet.
bobinget on Mon, 19th Jan 2015 10:17 am
If China’s GDP drops even one percent it no time to take the gas pipe.
India’s economy, oil imports are doing better then expected. Don’t expect oil bears to tell you though.
http://www.ibtimes.co.in/world-bank-projects-indias-gdp-hit-6-4-2015-620402
Make up your minds guys. Is slower growth a good or a bad thing?
shortonoil on Mon, 19th Jan 2015 10:27 am
Someone must have notified CNN that the parade was over? If China’s economy is following its electrical consumption, it is now in negative territory. Once its Strategic Oil Reserve is filled petroleum will follow electricity. The last glimmer of a growing world economy will fade into the twilight, and the creatures of permanently declining oil will begin to roam as night falls.
noobtube on Mon, 19th Jan 2015 10:34 am
Why are Americans always “experts” on the affairs of other nations?
I keep forgetting.
It is that American exceptionalism, that gives Americans the magical powers to understand everyone else’s problems but their own.
How could the world ever continue without Americans pointing its filthy fingers at everyone else?
Rodster on Mon, 19th Jan 2015 10:44 am
noobtube: “Why are Americans always “experts” on the affairs of other nations?”
Great point !
Allow a prominent Chinese economist by the name of Wang Xiaolu who lives in the area that China’s GDP is a bunch of BS. 😛
“The truth about China’s GDP numbers”
http://www.businessspectator.com.au/article/2014/8/7/china/truth-about-chinas-gdp-numbers
noobtube on Mon, 19th Jan 2015 11:15 am
So… why is that any concern of Americans? Do Americans take delight in pissing on China?
Of course they do. Without hate, Americans couldn’t exist.
American exceptionalism is the entitlement to slander/attack/assault anyone that doesn’t meet their master race requirements.
Hence, France, UK, Netherlands, Germany, Nordic countries are good.
China, India, Russia, Brazil, Middle East, and everyone else is bad or inferior.
America… the land of the self-important, self-deluded, self-entitled, holier-than-thou, hate-filled, intolerant, my stuff-doesnt-stink, the world owes me-idiot.
We’re from America… and we’re here to help.
GregT on Mon, 19th Jan 2015 11:23 am
noobtube….the self-important, self-deluded, self-entitled, holier-than-thou, hate-filled, intolerant, my stuff-doesnt-stink, idiot.
ghung on Mon, 19th Jan 2015 11:46 am
Greg, let noob fester alone in his little cauldron of resentment. Doesn’t bother me a bit. In fact, maybe we should call noob “Fester” from now on; a term of endearment, so to speak.
bobinget on Mon, 19th Jan 2015 12:42 pm
Respectfully, shortonoil.
Almost every nation or near nation is at a somewhat
different stage of development. (or decay)
Agreed?
If that’s true, we all can’t move in lockstep vis a vi
oil requirements. Outcomes will differ.
Being NA Centric has the advantage of using data
more transparent then reports out of China,India, Africa or Mideast. Using EIA may be as accurate as can be, but does US consumption really matter in time of war? (compared to China and India’s 2.4 billion new car owner want-to-bee’s)
Hundreds of new M1A2 Abrams tanks, thousands of support vehicles, just ordered from General Dynamics for the IRAQ Army and perhaps even later for ISIL. Never mind will they be effective,
they will be made in USA, driven in Iraq.
Ignoring this ongoing Iraq War ver 3.0 as we have
for years will not diminish its machinery, land, sea and air from having made impact on A) US jobs and debt B) future terrorists in the making.
Most importantly, there must be a direct collation
between oil we are ‘protecting’ and war oil we use to create additional enemies.
When we (the US) will soon be fighting wars on not two fronts as in Afghanistan and Iraq but POSSIBLY
Iran, Libya, Venezuela, Yemen, Somalia, Nigeria,
Syria, Saudi Arabia and Sudan?
Actually, just ‘losing’ Venezuela, second biggest oil reserves on planet, an unmitigated
disaster of such proportion the next US administration will practically insist we intervene.
When do ya think we fess up and admit what we are fightin for? Certainly not yet. Folks might begin to ask embarrassing questions, like, ‘If we don’t need
so much oil, why are we fighting for more’?
If shortonoil or HRH Plantagenet persist in denying
there are oil conflicts so be it. Something tells me
these people’s revolts won’t go away.
Makati1 on Mon, 19th Jan 2015 6:20 pm
bobinget, we both know the Imperial war drums are beating louder and louder to cover up the moans and screams of it’s own citizens as it slides into the depths of the 3rd world.
I practically ignore ALL government statistics from any country as they are all huge lies and have been for years. The USSA is just as guilty as China or Russia or India or even Canada. ALL are covering their ass’ and trying to keep BAU going for a few days/weeks/months longer.
What happens in China is China’s business, not that of the USSA. The USSA has it’s own huge problems and the results are going to be as bad, or worse, than any in China. Asians have an ability to cope that has been lost in the West, or at least, in the USSA. The USSA has not had war inside it’s borders since 1865. I think it will soon get to experience war firsthand. We shall see.