The Wall Street Journal blog looks at whether or not a economic slowdown, which has been widely predicted for China, will impact global oil prices:
China’s economic “slowdown,” with GDP growth of 9% in the third quarter (down from 12.2% a year ago) has some alarm bells ringing. A Chinese slowdown, on top of economic woes in Europe and the U.S., threatens to deflate global demand for oil. From Bloomberg:
“I think the economic news from Asia is knocking the last leg from under the bulls,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “We’re now getting evidence that China isn’t immune to the financial crisis after all.”
That poses a couple of questions. Is China really slowing down? And will that really affect its demand for oil? GDP growth didn’t match previous quarters, for sure, but lots of economists chalk that up to post-Olympic adjustments and the cooling of certain overheated sectors. Imports, too, have slipped in recent months—including diesel and gasoline. That’s led plenty to speculate that China’s export-driven growth will take a hit as the U.S. and Europe retrench.
But crude oil imports haven’t budged at all.
Meanwhile, Australian mining giant Rio Tinto has predicted that Chinese demand for natural resources will bounce back in 2009 after the impact of the global slump eases. Read also “How much Wall Street storm would hit China” from People’s Daily.
