Dr Andy Xie is a Shanghai-based independent economist specialising in China and Asia, and writes, speaks and consults on global economics and financial markets.
Be warned. The global economy is likely to experience a recession next year. War across the Middle East is set to escalate, wrecking energy supplies for many years, even as the artificial intelligence (AI) bubble is ripe to burst. This, however, would also create an energy leadership opportunity for China.
High energy prices already fuel demand for Chinese renewable energy products and electric vehicles. But as a leader in building coal-fired power plants, China can also offer the global market a quick substitute for Middle Eastern oil and gas, attracting a boom in investment and export revenue. China could well become the new global energy epicentre, strengthening its geopolitical position.
Since the United States launched its war on Iran over seven months ago, the global oil shortfall has run to 3 billion barrels. The release of strategic reserves by countries around the world has largely kept oil prices at around US$100 a barrel. But both national and commercial reserves are now running low.