The life after black gold (oil) Essay Example | Topics and Well Written Essays - 250 words

The life after black gold (oil) - Essay Example he world was so huge that crude oil prices that peaked at $147/barrel came down crashing in the range of $40-45/barrel in March 2009 due to fear of reduced demand not only in the US but also across the world. Laws of economics do play its tricks to acquire new price equilibrium in line with changed demand and supply scenario. Reduced crude oil price certainly eased the balance of payments issue of many small developing countries who were mainly importing oil for their domestic consumption (Meyn & Kennan). This financial crisis led to the decline of the US economy and that in turn, affected most of the countries in the world (Gokay). Immediately after the economic crisis in the US, the Wall Street Journal reacted that Chinas economic growth reduced somewhat in the third quarter of 2008 due to lesser demand of its products in the export market. That was supposed to have its ripple effect on employment and thereby domestic consumption. This would have further effect on the private sector investment growth (Marcelis). A year later, real impact of the US economic crisis began bothering Chinese economy significantly. As Andrew Batson reports in Wall Street Journal in 2009, Chinas exports declined by 22.6 percent to $91.94 billion in April. It is pertinent to note that exports from China were already down by 17.1% in the month of March. To prevent severe setback to Chinese economy, government was already providing huge stimulus packages increasing capital spending during March and April. Demand from the private sector was weak and much of the investment spending was coming from Chinas central bank. Fan Jiaping, the economist from the State Information Center categorically said then, "Export demand doesnt show any signs of turning for the better". It is important to note that China is one the largest exporters to the US and therefore not only its exports to the US was impacted but also its imports declined by 23% to $78.8 billion in April 2009. During the period,