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  • What China's Stock Market Implosion Means for Oil [View article]
    China is very inefficient in converting energy use into GDP, the USA being 4x and Japan being 9x as efficient. Right now, their government is subsidizing energy costs, to what degree is anyones guess. The net effect of this is transferring a portion of their foreign reserves to energy exporters.

    High energy prices will affect China far more than the US or Europe. Manufacturing based economies are more energy intensive. As long as oil and coal prices stay at sustained levels, I believe this stock market will face continued downward pressure.

    Watch what happens to energy subsidies in China after the Olympics. There might well be energy price protests.

    I don't have the time to delve into the hard numbers and quantify the exact effects to their economy with any accuracy, so if anyone else has done the work, please share!!
    Jun 17 20:45 pm |Rating: 0 0
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