The large disparity between China's enormous energy needs driven by its economy and its minimal domestic oil and gas reserves means that the country is a key driver of the 'supercycle'. Commodity 2000-2014, which is characterized by a continuous upward trend in commodity prices. At the end of 2017, China's high economic growth allowed it to overtake the United States as the world's largest annual crude oil importer, becoming the world's largest net importer in terms of total gasoline volume. oil and other liquid fuels in 2013. The COVID' policy has slowed the country's economic growth, but with the policy officially repealed on January 8, this year, much is being said. taken to return to normal economic growth in China and this boost could affect oil prices.
However, China's high economic growth again does not mean another oil price boom. This more pessimistic view is not one shared by the US Energy Information Administration (EIA), which last week announced that the end of COVID-19-related lockdowns in China is expected to boost tourism and boost global oil demand growth this year. They added that a brighter economic picture in China and elsewhere next year will also contribute to continued oil demand growth into 2024. More specifically, the EIA highlighted that consumption Liquid fuels in China are forecast to be more than 700,000 bpd in 2024. Overall, growth in China and the rest of the world is seen as the main driver of oil demand. Global mines are expected to grow by 1.5 million bpd this year to 100.9 million bpd, or 430,000 bpd, a jump from February estimates.
It is possible that economic growth from a number of non-Organization for Economic Cooperation and Development (OECD) countries, including India, has lifted global oil prices to some extent for some time. However, in China's case, it is likely that the country's next phase of economic growth, post-COVID-19, will not be the same as the previous ones that have provided a lasting and sustained boost. stable for oil prices.
Rory Green, chief China economist at TS Lombard, in London, exclusively told Oilprice.com that it is certain that China will grow much stronger this year than any year during the pandemic. “In December 2022, we noted that China was looking to kickstart consumer sentiment and activity in 2023, a message highlighted in President Xi's New Year's speech. Binh,” he said. He added: “Beijing is trying to re-establish domestic and international economic and political relations by reducing the rhetoric of 'Commonwealth' and 'Wolf-Wolf diplomacy', and at the same time more importantly deliver stronger growth. “We think China is rapidly moving from a COVID coma to a booming reopening, and a GDP target of 'above 5%' will be set for 2023 and Xi will review the GDP report on that level comfortably,” he insisted.
Indeed, this 'above 5%' economic growth target was reiterated on 5 March this year, although it came after the 2022 economic growth target of 5, 5% of that year. Eugenia Victorino, SEB's head of Asia strategy in Singapore exclusively told Oilprice.com last week that this year's target must be met without the need to roll out flood-like stimulus measures. , especially considering this year's inflation target is only 3%. Although most of the performance indicators for February are yet to be released, the Purchasing Managers' Index numbers suggest that the recovery in 2023 will be broader than in the second half of last year. “At the end of 2022, export volumes in China and their regional trading partners struggled amid cyclically regulated technology exports and projections,” Victorino said. about the global economic downturn. However, the improvement in export orders in February was echoed in the PMI of China's Asian trading partners, so although the export environment remains a negative positive for China's growth prospects, but the reopening has provided some offset to intra-Asian trade," she added.
China's central government expects policy support to ensure that the recovery expands further. Victorino expects the reserve requirement ratio (RRR) to fall by about 50 basis points this year and a higher target of 12 million new urban jobs, compared with the 11 million target set over the past two years. , implying a focus on labor-intensive sectors of economic recovery. However, this may be consistent with the growth story due to the epidemic