Chinese Economics Thread

tphuang

tphuang

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The ascension of petroyuan is not something that is just about to start, it has already been set in motion. Among the OPEC+ countries, Russia and Venezuela are already accepting payments for oil in renminbi at steep discounts.
“Russia, Iran, and Venezuela account for about 40 percent of the world’s proven oil reserves… the GCC countries account for 40 percent of proven oil reserves as well (with Saudi Arabia accounting for half)… and are being courted by China to accept renminbi for their oil in exchange for transformative investments,” Pozsar summed up.


“To underscore, the U.S. has sanctioned half of OPEC with 40 percent of the world’s oil reserves and lost them to China, while China is courting the other half of OPEC with an offer that’s hard to refuse,” he added.


“China will not only pay for more oil in renminbi (crowding out the U.S. dollar), but new investments in downstream petrochemical industries in Iran, Saudi Arabia, and the GCC more broadly mean that in the future, much more value-added will be captured locally at the expense of industries in the West,” Pozsar said.
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Zoltan here certainly is very bullish about Yuan internationalization. Now, I would caution everyone to just accept everything he says here, but he certainly does push many points that I've talked about. Getting GCC onto China's side through more tech and military export is important. Getting Saudi, UAE and Qatar on their side is enough to lead the entire Arab block. Russia and Venezuela is already on China's side in terms of paying oil in RMB. If Iran wants to play with China, it needs to accept RMB for its oil/natural gas and mend relationship with Saudi Arabia.
 
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gelgoog

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How good is China's petrochemical and oil services industry? That will be important if China wants to get the oil producing nations on its side. Because you can be pretty sure if the Gulf States go for the RMB the US oil majors and oil consultant companies will walk out en masse like they did in Russia and Venezuela.
 
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Michaelsinodef

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gelgoog said:
How good is China's petrochemical and oil services industry? That will be important if China wants to get the oil producing nations on its side. Because you can be pretty sure if the Gulf States go for the RMB the US oil majors and oil consultant companies will walk out en masse like they did in Russia and Venezuela.
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China itself produces like 5 million barrels a day, which is like about 33% of their total consumption.

And well, that's done within China's territories with Chinese companies using Chinese equipment (might not be 100% fully domestic though, but probably still a high number, and enough that it could probably work less efficiently if it went 100% fully domestic).
 
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canonicalsadhu

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From Mark Kruger
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He sees a deep contraction in December dragging 2022 growth to just 2.3%. But he says by next year Q4 the economy should fully recover and register 5.8% growth for the year, based on similar models dealing with the 2020-2021 pandemic period.
 
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