Lei Sihai: The World Political Game Behind China's Oil Price

On the evening of June 19, China suddenly announced to increase the price of refined oil. On the same day, New York crude oil futures fell by more than 4 US dollars. Domestic and foreign media have reported that China's upgrading of refined oil prices has led to a correction in international crude oil prices.
This seems to provide evidence that the Western media has always reported that the Chinese energy demand is the main reason why the current international oil prices remain high. Since the international crude oil price soared at the beginning of this year, China has been facing increasing international pressure. The United States and other Western countries have been demanding that China reduce oil subsidies. Western countries accused China of implementing price control measures, artificially stimulating oil demand, and causing international oil prices to soar.
This accusation appears to be an economic theory of demand determining prices. It seems logical. If it is accepted by the world, it is very unfavorable to China. It will greatly reduce China's future flexibility in energy policy and may cause other oil consumption. Big countries shirk their due domestic policy adjustment responsibilities. For example, this time China's increase in refined oil prices objectively relieved the pressure on the United States to increase energy prices. Although the United States did not pay policy costs, it benefited a lot.
Therefore, when we adjust our energy policies in accordance with national interests, we also need to clarify the illusions of international public opinion and guard against international public opinion regarding China as a scapegoat for high oil prices, and even be persuaded by international media to link domestic oil prices with the West. Natural economic rules and goals. If so, China may fall into a trap.
As the consumption of refined oil involves national economy and people's livelihood and social stability, almost all countries have subsidies, and the United States also subsidizes the production of biofuel oil. Taking the view that "China subsidizes oil prices is to subsidize the world," the argument that China should raise oil prices is a theory that began in the West and is not convincing. Is the West so selfless and unwilling to win this big bargain and unwittingly oppress China to give up "subsidizing the world?" It is important to know that the United States and other Western countries are the largest export targets of Chinese manufacturing.
The theory that China needs to push oil prices has proved to be untenable on the second day. The US "New York Times" disclosed on the 20th that Israel had conducted a large-scale military exercise in the first week of June and it seems that it was simulating the bombing of Iranian nuclear facilities. When the news came out, New York crude oil futures prices rose by 4 dollars. Saudi Arabia issued a statement that day, pointing out that geopolitics and speculation are the reasons behind the high oil prices. In this regard, the United States also admitted that in addition to international hot money, many investment institutions that suffered losses in the subprime mortgage crisis, such as Goldman Sachs, Merrill Lynch, etc., are betting on crude oil and commodities in order to make a copy here.
Since China's energy prices have risen and cannot suppress the current international crude oil prices, Western public opinion is still telling stories. The motives behind it are very suspicious. Western developed countries have experienced many oil crises and their industries are dominated by high technology. This allows the West to resist high oil prices by more means than in developing countries. For example, many economists in recent years have discovered that the U.S. economy has become increasingly “desensitized” to high oil prices. For example, Mark Hawker, a former Federal Reserve economist, believes that after the 1980s, the correlation between the continued rise of oil prices and sustained economic slowdown in the United States seems to have disappeared. A research report published in 2007 by Paul Segall, a professor of energy research at Oxford University, pointed out that data from the past three years showed that high oil prices do not necessarily lead to a slowdown in the U.S. economy. He analyzed that the most important path for oil prices to affect the economy is through monetary policy: When oil prices are transmitted to the core consumer price index (CPI), monetary authorities will raise interest rates, and the economy will subsequently slow down accordingly. However, in the past three years, high oil prices have not been significantly transmitted to the core CPI, and the United States has not necessarily adopted a monetary tightening policy.
Compared to Western developed countries, China’s economic growth still depends mainly on manufacturing. History shows that such an economic phase is more likely to transmit inflation through energy. Therefore, once “price increase without harm” or “benefit theory” has become the national policy direction, it may bring immeasurable damage to the Chinese economy, and this will result in The corresponding International Political Bureau has changed. In this regard, the Chinese should pay attention.