7 months ago • 2 mins
What’s going on here?
China's energy appetite is far from being sated, with data out this week showing the country’s using boatloads of oil.
What does this mean?
A nation guzzling down energy is a telltale sign of economic growth, and China’s latest data is nothing short of a blockbuster. At the end of last month, 125 supertankers were cruising their way to the world’s biggest oil importer – the most in over two years, according to Bloomberg. And if you think that’s impressive, buckle up: cargo data suggests that China hasn’t yet slaked its thirst.
But don’t imagine that it’s “all work and no play” in the Middle Kingdom. With Covid restrictions happily scrapped, China’s citizens embarked on a whopping 274 million domestic trips over the May Day break – a 20% increase from pre-pandemic levels. And because Mom and Pops always need a fridge-magnet souvenir, that helped push tourism spending back to 2019 levels too.
Why should I care?
The bigger picture: Beijing wasn’t built in a day.
Souvenirs aside, China’s economic comeback does seem a little uneven, with manufacturing activity recently shrinking for the first time in months. But let’s not get ahead of ourselves: the trajectory China’s charting is pretty similar to other nations’ post-lockdown recoveries, with services in demand and goods out of favor. Plus, the global economy’s in a bad way right now – so there’s little sense (and less money) in manufacturing products no one’s ordering. Goldman Sachs, at any rate, isn’t worried, betting that the dragon economy still has plenty of fire in its belly.
For markets: Fuel for thought.
Oil has taken a hit from that slowdown in manufacturing and the flagging US economy – meaning this week’s 8% slide in oil prices isn’t out of left field. But some hopeful analysts think the tides will turn before long, thanks to OPEC’s lowered oil production and an anticipated jump in demand in the second half of this year.
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