I think you misunderstand China's oil policy.

Gasoline is more expensive in China than in the USA. The Chinese government has not subsidized the oil industry in recent years. China's top oil companies made tons of profits during the last oil boom. As you know now, China didn't experience hyperinflation in 2007 and 2008. The same has been true in the USA also. High oil price often serves as an add-on tax on consumers. When people have to pay more for oil, they spend less on other stuff. So the evidence so far has been grossly inadequate to support the theory that high oil price will lead to higher inflation.

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• Actually what you said above is deflationary -凌长老- ♂ (242 bytes) () 08/15/2010 postreply 20:02:04