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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: zonder who wrote (9140)7/13/2004 3:54:15 PM
From: RealMuLan  Read Replies (2) of 116555
 
zonder:
"China setting up strategic oil reserve
By Michael Mackey

SHANGHAI - In an effort to reverse the growth of its dependence on foreign oil, China - a huge oil producer and once an exporter - is establishing a 70-75-day strategic petroleum reserve in four locations, and the first phase is scheduled to be completed in 2007. By 2020, China is expected to import 60 percent of its oil. "

atimes.com

As for oil demand growth in China, I think there were several reasons for previous years to have oil demand growth parallel to GDP growth in China:

1. did not encourage private-owned cars;
2. less high-tech growth (I think someone argued that one important reason for CA to have energy crisis a couple of years back was too much high-tech development which tends to consume more energy);
3. much faster growth in export since entering WTO (how much of the energy demand in China are contributed to products consuming in the US and other countries outside China?);

There might be other reasons too.

So it makes sense that the oil growth in China now is much faster than GDP growth.

>>Is China's oil demand that much higher than GDP growth this year? <<

I think for this and next few years, it will be much faster for sure (keep in mind, the GDP growth will be slower since China already realized that it does NOT pay off to singly-mindedly pursue high growth rate at any cost.

This car fever in China will be cooled down too, due to limited purchasing power of the majority, the stronger environmental-protection policy, higher gas price, and ever-increasing road jam in cities. On the other hand, China will have several new hydro-electricity projects start working in a couple of years.
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