China's Rising Pollution Signals Economic Rebound, Benefitting Oil Prices and US Energy Stocks
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Rising air pollution in China's largest cities suggests its economy will see a surge in growth, according to DataTrek Research. Higher pollution has correlated with economic growth in the past.
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Dirty air is bad for China's citizens but signals a welcome rebound for its slowing economy, as more factories ramp up production.
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Recent air quality data for 5 major Chinese cities indicates the country's economic recovery is underway, though pollution levels remain below 2019.
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If China's economy accelerates further, DataTrek expects global oil prices to rise, benefiting US energy stocks more than Chinese equities.
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Brent crude prices approached $100/barrel in September on growth hopes but have since retreated to around $86 as China's economy cooled.