Chin The Largest Economy

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At present, China is the largest economy in the world, overtaking the US in January 2015. It is also the world’s second largest oil consumer behind the US (Chen 2015) and the world’s largest net importer of crude oil (Dunn 2014). Its net importer status was driven by steady economic growth, with rapidly rising Chinese petroleum demand outpacing production growth (EIA 2014). China is also the fourth largest oil producing country in the world (Refer to Appendix ___).

The growth in the developing nation’s economy over the past 3 decades was heavily dependent on its low cost advantage compared to those of other countries. During this period of growth, foreign companies flocked to China to set up production facilities and factories to capitalize on this cost advantage. Raw materials are shipped to China, where factory workers build the final products and export them out to various countries (Wassener 2014).

However, recently, china’s economy has experienced a significant slowdown due to the shift in growth of the nation to rely more on private enterprise and domestic consumption. This shift in economy reduces its demand for industrial raw materials for manufacturing, which translates to a decrease in demand of oil for use in production plants. A survey of China 's industrial heartland identified decreases in key areas of new orders, export orders and output prices (Letts 2015). Furthermore, being the world’s second largest consumer of oil, this move that China makes will have

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