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  • infn444 infn444 Mar 23, 2013 10:28 AM Flag

    # 1 by 2016

    China is on track for a fourth consecutive decade of rapid growth and will overtake the US as the world's biggest economy in 2016 after accounting for price differences, according to a new report by the Organisation for Economic Cooperation and Development.

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    • .......................they will take over

    • OECD estimates that crude oil (Brent) worth $190 in 2020, with the possibility, highly plausible that at that time to reach $ 270 per unit. Last Friday Brent ranges $ 107/barrel.
      The reason for this numbers walks by Asian countries (China, India, Indonesia), where the axis of world demand, energy intensity (energy use per unit of output) has grown @ 1 to 1 with the income increased in the last 20 years, and they have expanded (GDP per capita) @ a rate of 8% per year in the period and are doubling every 8/10 years.
      UK took 60 years to double their population income (Industrial Revolution, 1780-1840), and U.S. managed to do in 35 years (second Industrial Revolution, 1865-1913).
      China / Asia gets this historic goal every 8 years.
      Hence, the People's Republic in 2012 has become the leading global oil importing and U.S. RIGHT NOW in 2nd place, which held that spot since the first oil shocks during '70s (1973/Yom Kippur War), in which the price of oil was multiplied by four and did so again in 1979 (Gulf War / Iraq -Iran). A barrel of crude worth $ 2 in 1972 and climbed to $ 44 in 1980.
      Last year China imported 6.12 million barrels per day, while the U.S. reduced its purchases to 5.98 mb / d. The International Energy Agency (IEA) estimates that the gap between the two countries would rise 3/4 times in the next seven years.
      The shift in favor of China in world oil imports reflects a broader phenomenon: the movement of the center of gravity of the world system advanced to pop.
      Thus, the emerging world this year would consume more oil than advanced. The record oil price expected by the OECD is not the work of scarcity. World production increase by 17 mb / d in the next decade (93 mb / d in 2012 to 110 mb / d in 2020).
      The key to the record oil price is in Asia. China consumes 10 mb / d (10% of world production) and consumption increases 10% / 15% per year, and imports 56.4%, especially the oil-rich Gulf countries.
      SCD (#1)

      • 1 Reply to horacebello
      • The Republic's voracity energy is no exception.
        China consumes as much coal as the rest of the world, plus (4 million tonnes per year vs. 4,300 million). Energy demand in emerging countries would grow 65% in 2040 and 35% in the world (Exxon Mobil), while the world's population would increase by 2,000 million in that period.
        The chinese impact on the world economy means an equivalent to the two oil shocks of the '70s. But this time its origin would be exponential growth in demand and not the brutal contraction in supply, caused by geopolitical factors, as it did then. A similar rise in oil prices necessarily raises the value of all assets in the world economy and transformed (by reverse character) in a powerful incentive to increase productivity, as a way to dramatically reduce the cost structure.
        An increase in oil prices as provided by the OECD would curb the growth of the global economy. What happens is that this now-in the second decade of the twenty-growing structural factors and not cyclical, as the expansion of the new middle class in emerging countries (2,000 million in 2020), which in turn is synonymous with urbanization.
        So, unlike the historical background, this time the rise in oil prices has not stopped the world economy and raise only limited to the cost structure. This combination becomes a key incentive to increase productivity and thus diminish. We live in a new historical era, in every way.

        (completing -and doing a historic comparison- the Infn post about OECD)

    • Among a broad range of recommended reforms, the OECD drew particular attention to China's urbanisation push, saying the government needed to focus on building larger, more productive cities.

      Although Chinese cities have expanded quickly, the country's urbanisation rate of 52.6 per cent is still below that of countries at similar levels of development. Transportation problems have also become severe. Average daily commuting times in Beijing - which boasts one of the country's larger subway networks - are 79 minutes, roughly double the OECD average.

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