The collapse in oil prices couldn’t be better timed for China’s slackening economy, providing additional room for monetary easing and a boost to domestic consumption, say economists.
China is the world’s biggest and fastest growing oil importer, relying on imports for around 60 percent of its domestic oil consumption. Last year, the country imported over 280 million tonnes of crude oil, worth almost $220 billion, according to state-run news agency Xinhua.
“[The] slumping oil price is the oil-guzzling dragon’s windfall gain,” Ting Lu, chief China economist at Bank of America Merrill Lynch (BofaML), wrote in a note. BofaML estimates that China would save $72 billion on its oil imports in 2015 if Brent remains at the current price of $70 per barrel.