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Contrary to its rapid decrease in imports of coal, iron ore, and other commodities, China continues to import record amounts of crude oil.

China is likely using current low oil price to fill its strategic petroleum reserves. Because crude oil purchases are typically paid for in US dollars, the decision to increase imports before the recent depreciation of the Yuan looks auspicious today. For example, the listed tanker company China Shipping Development is riding the 9% rise in crude oil imports in the first 11 months of this year to a likely profitable future as crude-oil tanker rates have gone up 16%.

Despite reduced Chinese demand for commodities needed for manufacturing and construction, China now manufactures more vehicles than any other nation – so many in fact that employers struggle to find enough workers. The growth in Chinese auto manufacturing has helped nurture and sustain the emerging middle class which must help alleviate government concerns about possible social unrest in light of job losses in coal mining and construction. While Chinese metropolitan areas continue to limit the number of vehicles allowed within city limits due to concerns about air pollution, Chinese President Hu Jintao has pledg...