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18 comments on Chinese lower their intended purchases

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RayJ on September 14, 2005 - 2:49pm Permalink | Subthread | Parent | Comments top
"About 42% of the growth in global demand is coming from China, where there is virtually no price sensitivity to demand,'' Rubin said in a separate phone interview. "There's a huge relationship to income growth there, but a very uncertain relationship to price at all."

I am surprised that Rubin does not mention the obvious reason. The Chinese subsidize energy prices which means that retail prices do not immediately respond to the world oil price.

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Dave Cohen on September 14, 2005 - 5:03pm Permalink | Subthread | Parent | Comments top
Exactly right. Which is why "free market" economics models of prices, supply and demand do not apply to the controlled economy in China. Other Asian countries (Indonesia, Thailand, India) are rolling back subsidies which are no longer affordable. Not China, not yet.
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18 comments on Chinese lower their intended purchases

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