Arnaud Bertrand on X just now

This is one of the biggest geopolitical mysteries of the year: why did China just save the world economy?

Because, make no mistake, it absolutely did. Analysts are pretty much unanimous on this: had China not dramatically - and I mean dramatically - reduced its oil imports this year, the price of crude oil would have gone through the roof and dragged the global economy down with it.

For proof, read how Javier Blas from Bloomberg - widely recognized as one of the world’s top energy analysts - explains what China did to Jake Sullivan and Jon Finer on their podcast “The Long Game”  

As Blas puts it, China went “from 11, 12 million barrels a day to less than 6 million barrels a day” of seaborne crude imports, and that “freed a lot of oil for other countries, particularly in Asia.” India, Japan, Korea and Southeast Asia “could buy the barrels that China was not buying.”

To be clear, China wasn’t the only factor - surging US exports and the IEA’s emergency release helped too - but it was by far the biggest: JPMorgan reckons China accounted for about 74% of the fall in global crude trade .

So it's no exaggeration to say that it is China, first and foremost, that saved the world economy this year.

If you remember the early days of the Iran war, none of this is what was predicted. In fact some US think tankers, such as the (always horrendous) Zineb Riboua from the Hudson Institute, were even cheering the war as being “all about China… the opening act in the larger contest against China,” the moment the US would crack “the central pillar of a regional order that Beijing has assembled” (https://t.co/RaCE05TcMp).

Seven months on, what actually happened is that not only did China come out of the war unscathed economically, and strengthened strategically, it also ended up shielding the world economy, America’s included, from the fallout of the very war that was supposed to be its undoing.

Breaking news: if you do something that’s supposed to be a “blow” to someone else - some sort of 3D chess move to gain the upper hand - and they end up having to rescue you from the fallout, maybe it wasn’t such a brilliant strategic move after all.

So how did China pull it off? And, more intriguingly, why did it choose to rescue countries, including the US, from a war that Washington’s own hawks were openly selling as a strike against China itself? 

And why do this when it effectively dampened Iran's leverage considerably, even though they're supposed to be China's "ally" (which, as we'll see, is false)?

This is the topic of my latest article. I went very deep researching all the Chinese sources I could find on this, looking at the exact legal mechanisms, and at what officials, oil refiners and state media actually said.

The answer turns out to be far stranger than I expected: no-one in Beijing actually ever ordered an import cut. China, effectively, seems to have saved the world economy incidentally, as a by-product of its own domestic policy to protect Chinese consumers.

Which is the real story here: China has become so large and so important it can just rescue the world economy as a mere side effect.

In fact what I discovered, hilariously, is that the Chinese were just as surprised as anyone else: it’s only weeks after Western media started crediting China with saving the world economy that Chinese media picked up the story. And even then, CCTV’s first take in July (https://t.co/xLPyaJeZnT) presented it as something 外媒称 (wàiméi chēng, “foreign media claim”) 🤣

Almost like a giant suddenly waking up to its own powers. Because, that's the thing: intentions fade, consequences stay. Intentional or not, as Igor Sechin, the head of Rosneft, Russia’s largest oil company, put it (https://t.co/ckinOaHzJ7), the consequence is that it's now China, not OPEC, who calls the shots on global energy markets. 

The valve of global oil pricing is now in Shandong, not in Zhongdong anymore (Zhongdong, 中东, is the Middle East in Chinese).