The Strait of Hormuz is on fire again, literally. The United States has struck Iran once more, hitting back after attacks on commercial vessels moving through the strait, and it has yanked Iran's oil export permits in the process. Oil prices have spiked in response, and the shipping lanes through Hormuz keep getting choked off as the standoff between Washington and Tehran drags on.

China Saved the World's Economy – the Second Time

BY Mao Paishou

Beijing has rolled out three moves to take the edge off surging oil prices: tighter energy management, its strategic reserves, and a longer-term shift in its energy mix. Some foreign outlets say this is the second time that China rescues the world economy, with reference to China’s expansion of domestic demand and support for the world economy during the 2008 financial crisis.

The Wall Street Journal's analysis, cited by China News Service, makes the mechanism clear. China's pullback in crude imports has freed up supply for everyone else on the international market. Bertille Bayart, senior economics editor at France's Le Figaro, put it bluntly in a commentary last month: China is once again stabilizing the global economy through its own policy choices, just as it did after 2008.

Rewind to 2008 to see the first act. Markets collapsed, demand dried up, and growth stalled across the globe. China stepped in with a package of counter-cyclical policies that expanded domestic demand and helped pull the world economy out of its slump.

Now the crisis has emerged in the Middle East. The Hormuz Strait carries around 20 million barrels of crude and petroleum products every day, roughly a fifth of global oil transport. Any blockage there sends oil prices soaring, stokes inflation, and throws the world economy into disarray. In some countries, even plastic bags have gotten scarcer and pricier.

Faced with rising energy costs, most countries have scrambled to protect themselves. That has meant hoarding energy resources and throwing up trade barriers, moves that only deepen the global economic pain. China has chosen a markedly different path.

China's crude imports fell 29% year-on-year in May. That single move freed up a large chunk of supply for other countries on the international market. The confidence to cut imports at a critical moment comes from China's massive strategic petroleum reserves, which have also helped keep a lid on prices.

Dig deeper and the real story is structural. China has spent recent years aggressively building solar, wind, and hydropower, cutting its reliance on traditional fossil fuels. U.S. consulting firm Asia Group notes that even if Hormuz gets disrupted, China's reshaped energy system means its exposure stays relatively limited.

Liu Zhicheng, a researcher at the Academy of Macroeconomic Research under the National Development and Reform Commission, told China News Service that the key to China's response is its comprehensive "ensuring supply and stabilizing prices" policy package. That package has headed off panic over global oil supply and cooled the risk of stagflation. Backed by a solid energy supply system and its strategic reserves, China has kept procurement rational and orderly, avoiding speculative buying and excessive stockpiling while managing refined oil prices directly. These steps protect global energy security and keep supply chains stable.

In effect, China has blocked oil shortages and price spikes from cascading through industrial sectors, kept production running steadily, and kept upstream and downstream links smooth, easing the disruption risks that geopolitical conflict tends to trigger.

That is the "second rescue" in a nutshell. Structural resilience, industrial upgrading, green transformation, and steady macro-control: these are the tools China used to hold a turbulent global economy steady.

Liu sees a bigger story here than oil. This is a demonstration of China's governance capacity under external shock, and proof of the significant role it now plays in keeping the global economy upright.

Mao Paishou

https://www.bastillepost.com/global/article/6003138-china-saved-the-worlds-economy-the-second-time

=====================

SEE ALSO: https://www.youtube.com/watch?v=BkA0bkb6ZO0

China quietly saved the world last month

Did you notice how the Iran oil shock that was supposed to end the world just never happened? Turns out it's because China single-handedly stopped it from hitting – pulled off a set of moves no one thought were possible – changed the history of oil overnight – and did it all in secret. Here’s how they pulled it off.

This video would not have been possible without reporting by Bloomberg, Reuters, the Associated Press, South China Morning Post, the Wall Street Journal, the Atlantic Council, Heatmap, and others.

Join Newpress, our community-driven hub for creator journalism: https://newpress.com/welcome

Welcome to The Bigger Picture, a new show that that makes sense of important news through clear visual explanations and analysis

======================

PLEASE VISIT:

YOURDEMOCRACY.NET RECORDS HISTORY AS IT SHOULD BE — NOT AS THE WESTERN MEDIA WRONGLY REPORTS IT — SINCE 2005.

         Gus Leonisky

         POLITICAL CARTOONIST SINCE 1951.

         RABID ATHEIST.

         WELCOME TO THIS INSANE WORLD….

NOTE: THE WESTERN WORLD STILL WANTS TO DESTROY CHINA.....