China Building Up Oil Reserves – New Storage Facilities

It seems that whatever the United States of America does, China soon follows. Why do you suppose this is? Well, for one there are many industrial capitalists, international corporate conglomerates, and bankers that helped build the United States who are now assisting the Chinese in building their civilization, and in doing so they are making quite a bit of money. There are good returns on investment for companies helping China build their infrastructure.

Likewise, we know that the Chinese are extremely good copiers. They are excellent at imitating, reverse engineering, and borrowing designs, techniques, and strategies which work. Of course, they only borrow (or some say steal) what works, and they aren’t interested in what doesn’t work. Therefore, they copy from the United States, those things we are doing right, and shake their heads at what we are doing wrong and use those as a lesson, something they never want to do.

So, they are learning from both our innovations and our mistakes. One of their newest things they are doing is building giant oil reserves and new storage facilities. This is a very wise idea indeed for several reasons. One is that China wants to hedge against price spikes. They probably recently figured out that oil commodities can be traded up to extremely high rates, but if they have their own reserves they can help mellow out market fluctuations that would disrupt their economy and growth.

This is interesting because the last large market fluctuation which took oil barrel prices from $35 a barrel to well over 70, was actually a result of Chinese government stimulus money that was given to the municipalities, who then invest in oil futures and made a good return on their money to then use as part of their funds to increase stimulus in their cities. This of course was an astute financial move, although most US consumers would have thought it a personal attack, as we had to pay higher gasoline prices at the pump.

The United States military also has strategic oil reserves, and China realizes that it’s incredibly large military, with all its ships, vehicles, and aircraft cannot run without oil. They are now building oil reserve facilities for storage that may actually be twice that of the US has. And they’re going to put them Xinjang region, as part of Phase II of their plan, thus, providing a very good safety net for their military operations.

Although, it will take them a long time to build these reserve facilities, and then fill them up with imported oil, once completed, they will have secured themselves and their nation against future disruptions which might take down their economy or prevent their military from doing it’s job.

This is an example of great future planning, something that has impressed me about China. In the United States we have a huge problem trying to do large projects like this, because of all of our bureaucracy, lawsuits, and inability to make decisions. When China decides to do something it just does it. Please consider all this.



Source by Lance Winslow