Petro-dollars And The Global Economic Imbalances

Economists began to study the Petro-dollars very early, After the continuous increase in oil prices, especially after its price reaching 145.29 U.S. dollars / barrel high, the academic community began to show concern about energy prices. Previous studies of petro-dollars tend to be concentrated on research in relationships between oil prices and the dollar's real exchange rate ; and the discussion of global economic imbalances also tend to East Asian countries as most important reason. This paper attempts begin to clarify the reasons for rapid accumulation of petro-dollars, and then study the oil-exporting countries' role in the global economic imbalances, focused on the U.S. dollar dynamic circulation mechanism, from the U.S. dollars devoted to studying aspects of the pricing mechanism. This is significant to correct some developed countries' one-sided understanding in the global economy imbalance, to ease the pressure on RMB and to improve China's energy strategy.The accumulation of petro-dollars, mainly attributed to the following four reasons, a direct result of imbalance between supply and demand in the international oil market. with the gradual increase in developed countries in the 21st century and the emerging market countries accelerate the development ,they increase the demand of energy, while with the relative rapid growth in demand, whether Oil-exporting countries' will or their ability can not meet the demand.Internal factor is that Oil-exporting country's can not digest the U.S. Dollars domestically.Although they has begun to construct in their country,their market is too small to absorb those dollars.Institutional factor is the oil with the dollar-denominated. Oil denominated in dollars means that the dollar exchange rate has a great impact on oil prices, as the dollar's long-term lower, combined with the Subordinated Debt Crisis,the expect that the dollar will depreciate led to soaring oil prices which accumulated a large number of U.S. dollars.External factor is the international market speculation has pushed up oil prices, with the developed country markets' profit margins have been squeezed, the real estate bubble burst, the international speculative group invest in oil leading to higher oil prices, irrational .From the relationship between the petrol-dollar and global economic imbalances, the data show that oil-exporting countries have been replaced the East Asian countries become the most important factor in the global economic imbalances, because the trade surplus of oil-exporting countries and East Asian countries are very different, and in "Asian premium" circumstances, the East Asian countries in the most disadvantage in new strategic triangle. In addition, such U.S. dollar-denominated system, is considerable uncertainty, oil-exporting countries will bear the risk of economic balance adjustment. This role is weakening ,from the use of oil-exporting countries can be seen, firstly, they are reducing the proportion of imports, and the imports have gradually deviated from the United States; Second, their outside investment has changed and no longer favor the U.S. treasury and capital goods, investment and more inclined to higher profits in emerging market countries.As oil-exporting countries has long been kidnapped by the United States their own interests are threatened,they requested pricing in euros or rubles.the article discusses the feasibility of such a pricing mechanism and consider that in the short term, compared to dollars, other currencies definitely do not have a clear advantage, and the participating countries from the oil trade point of view, the United States, other non-pricing currency countries, and even in this oil-exporting countries have to pay the huge cost of conversion; from theory, as long as a single currency pricing , you can not get rid of the "new Triffin paradox", that is, on the one hand the need of liquidity, on the one hand the plight of another currency can not be stabilized, although oil-exporting countries would break away from the shackles of U.S. dollars, they would inevitably have been kidnapped by another currency, so , this transformation in terms of reality or theory, are not feasible.Lastly,putting forward the relevant policy recommendations.When the petro-dollars invest in our country,if we can actively guide them ,it will not only resolve the accumulation of U.S. Dollar,but also can help us find a new economic growth point.Secondly, from the medium and long term, need to do the following four tasks: first, to establish a petroleum reserve system to cope with the impact of high oil prices. China compare to developed countries, the strategic petroleum reserve is not perfect, establish and improve the reserve system is urgent.Second, to optimize energy production structure and consumption structure, and vigorously carry out energy-saving measures to guide car consumption.Face to energy shortage, we must establish the awareness of energy conservation in the whole society .Third, the active development of new energy and renewable energy, promote the use of oil alternatives. Scientific and technological progress to solve the energy crisis, only the active research, can solve the situation.Fourth, to promote innovation and reform of financial system and actively participate in international oil prices. For a long time, since there is no well-established financial markets, oil transactions can only be a passive acceptance of the established price,it has brought great costs to our country, and only in the oil transactions we have a greater right in order to alleviate high oil prices and exchange rate risks to protect the national interest.