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With regard to China, I think you make a good case that they are, on a comparison basis, pretty well placed to avoid a recession due to an oil price spike. However:

-There's rural China and city China, and they have little in common. Having said that, most of the GDP is in the cities so it looks like the economy really isn't all that oil-dependent (of course, it's coal-dependent).
-It's not going to be a spike, but a prolonged shortage. So ability to adapt may be more telling in the long run than currency reserves. Besides, USA may simply print dollars as they are insanely accepted in most places.
-China makes its money from exporting. If high fuel costs mean more local production in the near future (which I would hope, not because I'm against China but because I'd like my planet to stay livable), its economy may suffer from the change.
-It's not just the level, it's the trajectory. Chinese people used not to drive, so the level of dependence may be shooting up. Which brings us to the last, and most important:
-My understanding is that China is held together by the promise of fast growth. That it may be ably to ward away a recession based on economic fundamentals (highly likely) may not be enough to avoid a sharp slowdown of growth. Which may be enough to trigger major social unrests, especially since the country is speeding towards other resources problems, namely water and breathable air.

Now, I don't know enough to make an informed judgment on these factors, but I'm not sure that normal rules apply in China.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Tue May 27th, 2008 at 05:18:24 AM EST

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