The Secret to China’s Oil Problems
Dain long lines at the gas stations in China! Except, I don’t have a car… But even so, what’s causing China’s oil problems and what are the problems?
Whenever the price of oil is regulated, problems creep up. The two biggest ones, when prices are held below market levels, are these:
- Long lines at gas stations – Think the ’70s in America & China Nnow
- Exporting to other countries where the market price is higher – A common problem in China today, and the ‘secret’ cause of oil shortages in some parts of China now and in the past.
China Oil Regulations Cause Both Problems
Both of the above problems are present in China. A year or two ago, these problems were even more common (and have been since shortly after coming to China), but it seems as if they are coming back strong to haunt Chinese drivers once again:
Exports of oil from China reached 330,000 tons in July, 190,000 tons higher than imports into China. Based on this analysis, the “oil shortage” was really caused by selling all of China’s oil to other countries, resulting in a tight supply of oil. What caused the large amount of oil to be exported? The [regulated] retail price of oil in China not keeping up with oil prices around the world. (Translated from this week’s Modern Weekly)
So while the international media plays up the idea that China is importing more oil than it is exporting, China’s own media, from time to time, presents the issue in the opposite light. Who do you think is right?