As mature economies like the U.S. and Europe sputter postrecession, China has caught the world's attention as an economic power. The country's nearly double-digit growth is the envy -- and the concern -- of the traditional economic powers of the world. One thing China needs to keep its economy clicking is fuel -- lots and lots of fuel. And for China, that's becoming an increasingly dangerous problem. China Is Acting Pretty American As we watch China continue to grow its economy, consider what it means for the country's energy future. China is already reliant on the rest of the world for the power that drives the economy. We talk a lot about the U.S.'s depending on foreign oil -- rising gas prices, sending money overseas to buy oil, energy security concerns. However, unlike China, our dependence on foreign oil has actually fallen, from 60.3% of consumption in 2005 to 47% of consumption over the past six months. From being an exporter of oil in 1993, China has headed quickly in the opposite direction and is now more dependent than the U.S. on foreign oil. And You Thought We Were Dependent on Foreign Oil In 2004, before the price of oil exploded to $140/barrel, China imported 120 million tons of crude oil, or 40% of its oil consumption. At the time, China knew this was a concern and the director of the Foreign Trade Department of the Ministry of Commerce predicted that China would import less oil and oil products going forward. Fat chance. Last year, crude oil imports grew 17.5%, to 4.79 million barrels per day, just over half of what the U.S. imported last year. But that represents a greater percentage of China's consumption than ours. So far this year, China has imported 55.2% of its oil, compared to 40% in 2004 and 47% in the U.S. While companies like ATP Oil & Gas (ATPG) expand domestic oil supply offshore, and explorers like Kodiak Oil & Gas (KOG) expand oil production on land in the U.S., we become less dependent on foreign oil while China goes the other way. China's Other Energy Problem Oil isn't China's only energy concern. Coal provides about 80% of the electricity generated in China and fuels the export machine that is Chinese manufacturing. It was only 2008 when China became a net importer of coal, but by 2009 it imported 130 million tons, or net, 103 million tons of coal. This year, analysts expect total imports to rise to 180 million metric tons as the economy continues to grow. As we put pressure to reduce reliance on U.S. coal miners like Patriot Coal (PCX) and Walter Energy (WLT), China is picking up the slack by boosting demand for coal. But even the fast growth of imports probably won't provide enough juice for the country. China has had problems with blackouts for years, and the problem has recently become more pronounced. When coal prices spiked earlier this year because of flooding in Australia, one of China's major suppliers, power plants refused to generate enough power to supply the country. In a clash of capitalism and socialism, generators are forced to buy coal at market prices, but are forced to sell the power at utility-regulated prices. When that results in a loss, there's not a huge incentive to keep the generator running. The blackouts hurt not only Chinese citizens, but also the businesses that are driving economic growth. No End in Sight As China's economy grows and more people join the middle class the problem is only going to get worse.
Really??? and where in the hell is the 30K going come from to buy it, even if gass is $5.00 a Gal, I will have to drive the piece of junk for 15 years just to brake even, aaaa No thanks I'll pass, You buy it
Sure, ALCOA is doing deals in China but the aluminium price is still TOO LOW for ALCOA to survive much longer unless it is planning to wipe out shareholders and starting all over again without any pain !!!
Have the Chinese watched "Inconvenient Truth" movie by Al Gore lately?? Why does China need to produce aluminium with coal powered electricity while it can import aluminium elsewhere where hydro power is used.. We already are drowning under 5 millon tons of aluminium in secret warehouses run by Goldman Sachs... Why cant Goldman Sachs convince China to start importing aluminium and help clear off the inventories??? We are helping ourselves at the aluminim buffett without any fair compensation to aluminium stakeholders and bondholders.. ALCOA is flirting with bankruptcy without admtting it... It can happen anytime... What a joke!!
This is why Gasoline will be $5/gallon by 2014, and $10 by 2020. Americans, lets quit being hogs and idiots. QUIT DRIVING YOUR FRIGGIN TRUCKS AND SUVS AROUND BECAUSE IT MAKES YOU FEEL SAFE. What... are you 9 years old? You are using MY GAS, your kids gas, and dumping CO2 into the friggin air by thhe tons. Get a Prius or other super efficient hybrid, and you will NEVER REGRET IT, and perhaps not feel guilty in a few years, when the reality of our gluttonism is beating us about the face and eyes. We have used 8 times the energy of the rest of the world America... energy from resources that will never be replaced. STOP IT!
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THEY NEED TO DIE OFF..........WAY TO MANY PEOPLE.......HELP BRING OIL PRICES DOWN
No, this not bad for China, this is an opportunity for the USA. We have BILLIONS of tons of coal in the Rocky Mountains. It is a hop, skip & a jump to the West Coast and loaded on a ship. The US is running (For the last 10 years) a $40 Billion trade deficit with China. It would be good for us to export as much coal as possible........
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