Rising Fuel Costs in China

Robert Hsu, June 24, 2008

Of course, this hike in gasoline prices will increase inflation in China, but the country will try to offset the price jump by increasing its energy efficiency. This is already taking place as China attempts to move away from energy intensive low-end manufacturing into higher value-added, knowledge-based industries.

Some think that this hike in fuel prices will cause energy demand in China to taper and the country to turn to more energy-efficient ways, but I don't think this will be the case. Rather, I don't think that there will be any significant reductions in Chinese energy demand any time soon. That's because the Chinese government is more focused on growing the country's economy over energy efficiency. So the economy will still grow along with energy demand, and even if the price of energy increases, too.

Because of this, I am recommending a company to profit from rising oil prices. My China Strategy subscribers have so far made 165% profits on this play, and I expect more to come. To find out more about this company and my buy advice for it, join China Strategy today!

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