What China's Slowdown Means for the Price of Oil

China's demand for oil is expected to fall as its economy continues to cool. That could wind up hurting Houston.

The International Monetary Fund is forecasting China's economy will grow by 7.8% in 2013 --enviably fast by most standards. But the last time China grew at less than 8% was in 1999. Patrick Jankowski is chief economist for the Greater Houston Partnership.

"China's been one of the main areas which has been driving the demand for oil. And if you look at all the growth in the demand for oil over the past few years, China's accounted for about half of that."

Bill Gilmer heads the Institute for Regional Forecasting at the University of Houston's Bauer College of Business. He says it's no coincidence that the price of oil began its rapid rise in 2003 -- as China's economy started a streak of double-digit growth.

"It presents some significant risks to the Houston economy going forward if we don't see that kind of growing oil demand in the future, particularly with the increase in oil supplies we're now seeing."

Houston's total exports to China fell by 3% last year, a decline of roughly $150 million.

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...