September 22, 2008

Is Chinese oil demand immune to prices?

No - Automobile sales in China in August 2008 shrank 6.3% year on year to 629,000 units, the first fall in about two years, due to higher fuel prices.

Chinese GDP growth has dropped by about 1/3 recently - see http://www.econbrowser.com/archives/2008/10/middle_kingdom.html .

Chinese are much more aggressive than the US about replacement of oil-based electrical generation with coal and nuclear; energy efficiency (especially automotive); and PHEVs/EV's.

Regarding competing with China for imported oil: the US produces at least 40% of it's own oil, so a 20% reduction of overall consumption is a 33% reduction in imports. I would note that the US reduced it's oil imports by about 15% recently, even before this credit crunch hit.

China, already a global center for lithium-ion battery component production and battery manufacturing, is ramping up its research and development efforts in the field, both within the private sector and with government support.

1 comment:

Anonymous said...

Very good blog, in this world, every country is constantly developing new energy technologies
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