NYT: Chinese Oil Demand Slowing

Thanks to Anonymous in the comments for pointing me to this New York Times story: apparently, Chinese oil demand has slowed a bit recently, declining one percent from the same quarter last year.

The drop is the latest in a series of unclear and often conflicting indications about whether the Chinese economy is still growing strongly. Top officials of the agency said in interviews they believed that the decline was temporary and that they expected Chinese demand to rebound in the second half of the year, but added that world oil prices could take a heavy blow if Chinese use did not increase.

The International Energy Agency, supported by the governments of the world's leading consuming nations, has recently become known for warning that the world does not have enough oil and calling for the Organization of the Petroleum Exporting Countries to push its member countries to increase their output. But William C. Ramsay, the agency's deputy executive director, said Wednesday that there were signs that worldwide production capacity was starting to move ahead of demand for the year, and he expressed surprise that oil prices had nonetheless stayed high.

Really? Imagine...

... [IEA chief economist Fatih] Birol said there had been a vigorous debate in the last two days within the International Energy Agency over how to explain the decline in Chinese consumption, and he acknowledged that other, longer-term explanations were possible.

These include the possibility that the overall Chinese economy is starting to slow, that China is generating more of its electricity from coal instead of oil, and that China is improving energy conservation in response to high prices.

Economic statistics have been contradictory. Exports are still growing rapidly. But energy-intensive production of steel, cement and other construction material has started to slow as the government cracked down on real estate speculation.

Real estate speculation? Say it ain't so! The U.S. was founded by the ultimate real estate speculators! How can China ever hope to become liberalized if they "crack down" on speculators?

(That is not a joke, by the way.)