As the Chinese economy develops and becomes more industrialized, there is a growing demand for energy for use in production. The Chinese manufacturing boom has long meant that we can enjoy lower prices on consumer goods ranging from clothes to electronics. But China's success as a manufacturing giant is also beginning to have an impact on other parts of the global economy, creating a feverish demand for basic commodities like oil that is sending prices skyward, as western economists beleive. However others disagree and say that this sudden increase was caused by instability in the oil market and panic buying.
Many have agreed that China's rapid growth comes with a thirst for oil that is helping push up gas prices in the rest of the world. "China is booming and they can't keep up with demand over there, so our prices double here. That hurts." As much as a third of new demand for crude oil on international markets this year can be attributed to China, according to the International Energy Agency. China's imports of petroleum were a major factor behind the price of oil breaking the fifty dollar per barrel mark at the end of September. China's growing demand for international commodities comes partly from years of intensive foreign investment in its manufacturing base. With all that money pouring in, China's economy has been growing at a rate of about 9 % a year. The Chinese are rushing to build new factories and office buildings, and the country's reserves of crude oil and coal cannot support the demand for electricity and gasoline to power millions of cars and trucks cranked out every year.
So China is rapidly increasing its reliance on foreign sources. In the meantime, US steel mills and steel fabricators and their foreign competitors don't have the capacity to ...