Thursday, July 03, 2008

China Nationalist's Interpretation of Increase in Price of Oil

A Chinese friend explained to me today that the United States is purposefully artificially inflating the world price of oil as means to force China to raise the value of the RMB yuan. The increase in the price of oil will also make the cost of production of Chinese products more expensive and therefore render them less competitive in the U.S. market. Furthermore igher oil prices increase the cost of shipping products from China to the United States. So all three factors will make Chinese products less competitive in the U.S. market.

To most Canadians this interpretation is rather far-fetched and irrational. But to the Chinese nationalist's mind when things go wrong, such as gas prices going up by 18% as they have in China recently, the default response is to blame it on hostile foreign forces. The idea in this case is that hostile elements in the United States are manipulating world oil prices as a means to make problems for China. I strongly suspect that this may be in interpretation that many Chinese would readily accept without question.

Irrational nationalism can be a very dangerous thing.

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