Cheap gas in China prompts buyers to go bigger, while Gov't wants smaller
Apparently, China hasn't learned from the policies of the United States when it comes to petroleum prices. For decades, the price of gasoline has not reflected its true cost because prices have not factored in the cost of military expenditures required to maintain "friendly" governments in countries that supply large amounts of our oil. As a result Americans have long favored larger, more powerful vehicles - and they could afford them because gasoline was cheap and plentiful. China has gone from being a net exporter of oil to the world's largest consumer since 1994. China now imports half its oil needs and subsidizes the retail price to less than $3/gallon.
As a result Chinese drivers with increasing disposable incomes are opting for bigger, more powerful and thirstier vehicles, just like Americans. SUV sales jumped 38 percent and luxury car sales jumped 30 percent in the first two months of this year, bucking the trend in the U.S. Those segments are outpacing the overall sales increase of 16 percent in the fast growing market. Just as in the U.S., the Chinese government is pushing automakers to build more efficient vehicles but so far consumers aren't buying. It seems that just as in the U.S. and elsewhere only higher fuel prices will prompt drivers to go for more efficient vehicles. The Chinese government is certainly in a better position to determine what fuel prices will be than in other countries and with a market that is still evolving they could make a push for alternatives like battery and fuel cell electric vehicles. Given the pollution that plagues cities like Beijing and the increasing dependence on imported oil, they need to do something.
[Source: New York Times]
Reader Comments (Page 1 of 1)
Tim 3:28PM (4/23/2008)
As the Chinese central gov't moves away from socialism, relaxes regulation and moves toward free markets, their middle class prospers and poverty is reduced.
As the US central gov't tightens regulation and moves toward socialism, our middle class shrinks & suffers and poverty is increased.
OK Obama, Clinton II and McCain supporters, which system works better? hint: we were right and now were moving WRONG!
Reply
2Snowboard 4:27PM (4/23/2008)
I realize this is merely a blog, but Sam Abuelsamid do you even have an editor?
"For decades, the price of gasoline has not reflected its true cost because prices have not factored in the cost of military expenditures required to maintain "friendly" governments in countries that supply large amounts of our oil"
What the heck is a "true cost" precisely? Unfortunately if there is any "untruths" about oil prices, its that they are TOO HIGH because there is no competition because oil is traded as a "Commodity" even though its a refined product. Its all collusion and price fixing from OPEC fat cats rather then pitting them against eachother. Then there are your precious taxes that you apparently want MORE of, your taxes which hurt the middle class and poor well before there are any significant changes in auto purchases.
Conservation of gas is for chumps. This very article is about China suddenly becoming the largest consumer of oil, doesn't even mention what is happening in the rest of the developing world, and you think hammering people into switching from a Tundra to a Prius and saving .00000001% of their nation's oil is really in perspective? Get a clue Sam, its a big world, conservation is like using a bucket to bail water out of the Titantic, the water is still coming Sam. Stop hurting innocent people with taxes, the future can only be alternatively powered cars.
Reply
armmat 7:46PM (4/23/2008)
TIM SAYS:
"""1. As the Chinese central gov't moves away from socialism, relaxes regulation and moves toward free markets, their middle class prospers and poverty is reduced.
As the US central gov't tightens regulation and moves toward socialism, our middle class shrinks & suffers and poverty is increased.
OK Obama, Clinton II and McCain supporters, which system works better? hint: we were right and now were moving WRONG!"""
RUBBISH:
Poverty is reduced for whom? You people are on drugs...it's called oil. You really don't see the train wreck barreling down your street do you?
It's taken a hundred years of human history for us to get to a point where we are realizing our wonderful, 24 supermarket lifestyles are temporary. What solution do you have after we can't sustain this? You keep thinking pushing this sort of exuberance on other cultures is the right thing to do...but you have absolutely no clue as to how you are going to sustain it.
Is that what you call a free market? A free for all? Oh yeah...that's a REAL good thing...NOT.
Reply
FThorn 7:00AM (4/24/2008)
Tim, correct.
Reply
justin 7:28AM (4/24/2008)
I back Tim on this also.
Reply
Whopper 9:25AM (4/24/2008)
Tim has it right; armmat is all wet. No one is "pushing" this lifestyle on other cultures, they are just discovering that this lifestyle is desireable. Our lifestyle was established by freedom and free markets and can only be sustained by permitting people to develop a means to do it. That means shed the "there otta be a law" mentality and let human creativity resolve the problems.
Reply
Mike 9:59AM (4/24/2008)
"1. As the Chinese central gov't moves away from socialism, relaxes regulation and moves toward free markets, their middle class prospers and poverty is reduced.
As the US central gov't tightens regulation and moves toward socialism, our middle class shrinks & suffers and poverty is increased."
Why is the US middle class shrinking? Lost mfg jobs, stagnent wages (as a result of lost jobs), high gas prices (not subsidized by our "socialist" gov) and the break down of the subprime lending industry (which was not regulated at all).
China is prospering due to low subsidized gas prices, a huge boom in jobs and now increasing wages.
They are moving from the far left to the center, we are slightly right of center. The best course is the middle road. The comprimise between regulation and free markets.
"OK Obama, Clinton II and McCain supporters, which system works better? hint: we were right and now were moving WRONG!"
Reply
Dad 3:36PM (4/24/2008)
" the policies of the United States when it comes to petroleum prices. For "
Don't bad mouth Pres. Clinton. He gave us cheap gas, made sure that no increase on CAFE happened while he was Prez, made no effort to stop global warming (we knew about it in 1995 and Clinton ignored it) and brought us an onslaught of gas sucking SUVs.
Reply
Dad 3:37PM (4/24/2008)
"2. I realize this is merely a blog, but Sam Abuelsamid do you even have an editor"
You must understand about Sam, he just takes his opinion and presents it as "fact". He never provides credible support for his "opinions". I try to look past his shortcomings and enjoy.
Reply
Duane Barber 2:16PM (6/19/2008)
I do not believe the article is from the NY Times. If it had been, it would have pointed that women, children and minorities are the hardest hit! Why are articles like this reprinted? The article is not about gasoline but social issues. Free markets only work where there is an ethical amd moral society. American energy business is no longer ethical and moral, so we need to have the regulations rolled out as soon as possible. Reagan's deregulation has put America in the mess we are in. He was a pure Socialist out to let Capitalism self destruct. The Associated Press(John Wilen) and his total propoganda oil analysts are responsible for much of the oil run. It is not about oil, but the newspapers (who own AP) trying to get us all into mass transit. So, do not believe anything anyone puts out as it is to support the way they make a living and impose the "ideal society".
Reply