High oil prices make shipping products halfway around the world much more expensive, making local products more competitive. If you’re in business to ship products halfway around the world, which China very much is, any forward-thinking person will realize that the long-term consequences of high oil prices are not good.
Absolutely. But it’s also why the Chinese are a) drilling for oil like crazy; b) starting an unprecedented number of hydroelectric plants, and c) modernizing with energy-saving devices (i.e., labor saving), which means they are d) outsourcing :)
Not that much more expensive. At 10 cents per lb (back when oil was in the 60's) - when you're shipping an entire refrigerated container-load - it just doesn't make that much difference. The salary gap between China and the US is simply too salary. What it does do is make low income countries close to the US a lot more attractive as sites for manufacturing facilities. Nicaragua, Haiti (if it ever becomes a peaceful place), and other countries in the Americas are now contenders despite many having higher salaries than China.