As translated into Chinese and published in PEOPLE”S DAILY, Beijing, on Aug 26 2008

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The Growing Global Oil Crisis

Gioietta Kuo July 8 2008

As the price of oil keeps on shooting up to an unprecedented level of over $100 a barrel, many experts like Goldman and Sachs of New York predict that the price will reach $200 towards next year. How will the world economy react to such a fast rise and how will it affect the avearge citizen in different countries?

One need go no further than the motor car to realize that the world’s economy is oil based. There are two fundamental reasons why the world is in a severe oil crisis, the extent of which we have never seen before. In the 1970s the oil crisis was caused by the producers cutting back for political reasons. But this time the reasons are much more difficult to surmount. First, there are many signs that oil is ‘peaking’ – that is the amount one can extract from the ground is getting less and less, so it is becoming more difficult to incrase production. Second, as the developing countries like China and India industrialize, the demand for oil increses as the growth rates of these countries rise.

So, in order to overcome the present crisis, first we (more…)