while oil consumption remained flat.
oil consumption did not remain flat. it fell precipitously due to the second oil shock, which caused a recession. then it rose and has kept on rising.
more importantly, net imports have done nothing but rise for the last 20 years.
the situation is worse for China, because they will have to rely even more heavily on imports. already they account for more than a third of global demand growth.
Only as a country becomes industrialized
this is precisely what China is doing. and please investigate the average per-capita oil consumption in "industrialized" nations and compare it to China's, to see how large a gap there is. once you plug in the incremental demand rise required, and compare it to global production, you will see the mismatch when you get to anything approaching the industrialized world. they will continue to exert upward demand pressure until the oil price rise puts a ceiling on economic growth.
also, one must keep in mind that the US ability to "pass the buck" in terms of transitioning to a service economy (thus passing the manufacturing buck to the ROW) is not available to all comers. unless China plans to turn Africa into the "next China" (paying them $5 a month instead of $50 a month in China), China will have to become increasingly industrialized and manufacturing-oriented in order to grow. obviously, somebody has to make things, and China has nobody to pass the buck to in 30 years.
and for them to experience the deflationary windfall of a labor vacuum like that which the US has experienced vis-a-vis China, they will need to find a labor pool which is 5 times larger than their own, and which is 10 times as poor. there are certainly people in Africa who are 10 times as poor, but whether they will be fit for labor is uncertain, and there are not 5 times as many of them as the people in China. in any case, there will not be enough fossil fuel to run it all.
but it will not matter by then, because oil will be so expensive that today's conventional notions of economic growth will be thrown by the wayside, in the optimistic scenario which assumes no major atrocities happen in the interim.
the more likely scenario for China, i think, is growth of industrialized "pockets", but the aggregate levels cannot approach those seen in truly industrialized nations. the implication of this is persistent wage pressure despite the growing sophistication of these pockets. |
