China’s Impact on the US Economy After the Liquefied Natural Gas Deal

The US and China have agreed to negotiate on the terms regarding liquefied natural gas or LNG. The arrangement would be the US exporting the supply to China which has been considered a huge deal for the States. LNG is a key product in the energy market growth with China being the largest consumer. This hails the US as the biggest exporter of natural gas which was never expected. The two nations settled in this massive investment that also drives the biggest economies to become more powerful.

Looking closely, liquefied natural gas has numerous purposes. These include heating, cooking, industrial applications and even extends to the generation of electricity. It is also a more efficient and eco-friendly option for transportation fuel. LNG has decreased Greenhouse gas emissions and NOx emissions which clearly reduces harmful environmental impact compared to other fuel such as oil and diesel. China used coal but has shifted to the natural gas alternative to clear its polluted skies due to haze. The country is only able to produce little amount of natural gas, thus, being dependent on other countries. China uses a majority of the gas products for automobiles. A number of cars in the country creates greater influence in any aspect that can be considered.

Aside from the US, imported LNG also come from Qatar and Australia which faced major challenges. It was quite difficult to bring the product to long distances due to the capacity of other country’s exports. Also, the high demands of China have resulted in shortage to the exporting country and it caused the halt of the trade. Moreover, this definitely has affected the country’s economy knowing that cutting off the exports is needed. This brings the US the larger share to export to China most especially when the users of LNG in the Southeast Asian country have been exponentially growing.

At the moment, China’s demand for liquefied natural gas is relatively helpful to the US economy. China is reliant on the US which means that there are wide amounts of opportunities that the US can deliver to China. This is quite beneficial since the US made a deal and the export process will continue for quite some time. Aside from China, India has also been expanding to the same path and being rich in the natural resources gives more positive outcome to the economy. The contract signed by China and the US is long-term however, it would still be limited since China is looking into becoming more self-sufficient in this aspect. China is already developing domestic means to acquire even if the country is still lacking in water and infrastructure. This US deal was a great steal from Russia since they won over the biggest exporter of natural gas. The disagreement with China and Russia involved the terms of the prices.

The US and China bilateral business relationship have been going on for quite some time. It started when China had their economic reforms which improved their country’s status and brought them to the spot as one of the most powerful economies. This event was right after China faced difficult challenges during the Sino-Japanese War in Nanking where violence prevailed. China stood up with the help of the US and the country has developed until the present times

Liquefied natural gas is an option to support clean energy specifically for developing nations like China. Being a huge nation requires more resources and with this, it greatly impacts both the US and China. The US supports the move of China to consider an environmental decision while receiving gains in their economy. For as long as the US is still able to export to the farther side and China wants it, this agreement is favorable between the nations.