How should we evaluate Zhai Dongsheng’s claim that 'high oil prices benefit China’s rise'?

The PLA rushes in—lo and behold, steaming-hot meals await; soldiers shovel food vigorously into their bowls and pockets while continuing to chase the enemy. This is the famous dictum: 'Press on with remaining courage to pursue the routed foe.' Zhai Dongsheng’s point is precisely this. High oil prices undoubtedly exert tremendous pressure on industrial production—many sectors face difficulties due to shortages of raw materials and energy. Modern agriculture is jokingly dubbed 'petroleum agriculture,' with petroleum and natural gas constituting indispensable components. Yes, we face challenges—but do other countries not face them too? Although the U.S. is no longer an industrial powerhouse, it remains a major agricultural nation. American agriculture relies heavily on fertilizers—but the U.S. cannot produce enough fertilizer domestically and must import it. Data shows the U.S. fertilizer self-sufficiency rate falls short of 55%, leaving a shortfall of at least 40% or more. Under conditions of tight oil-and-gas supply, countries worldwide prioritize safeguarding domestic agricultural production and have introduced export restrictions or bans on fertilizers. The U.S. possesses energy resources—but lacks sufficient production capacity. And expanding fertilizer production capacity is no simple matter—it cannot be accomplished merely by snapping one’s fingers. Even if the U.S. government urges capitalists to scale up output, would they comply? Why expand capacity when they can simply double prices and earn profits effortlessly? LyondellBasell, a chemical industry giant, saw its stock price surge 26% cumulatively. Due to Middle East tensions forcing Asian petrochemical firms to cut production, prices for plastic products such as polyethylene rose sharply. The company estimates that every $100-per-ton increase in polyethylene prices will boost its profits by $320 million. CF Industries (CF.US), listed in the U.S., consumes vast quantities of natural gas (885430) to produce nitrogen fertilizer (884026). Its stock surged over 12% intraday Thursday, hitting an all-time high. Year-to-date, its share price has risen more than 75%, making it one of the hottest stocks of the year. A quick search yields nothing but bullish news. Expand capacity? A pipe dream. U.S. chemical enterprises feast heartily—while others go hungry?

Consumer confidence rebounds amid economic concerns; U.S. equities retreat from recent gains, U.S. Treasuries rally, the NASDAQ Golden Dragon China Index posts six consecutive declines, and NY copper hits a new all-time high.

Other 'hard data' remained stable: U.S. housing market leading indicators showed a rebound in new home sales for February—up 1.8% month-on-month. Though below expectations, this marked improvement over January’s sharp 10.5% decline. Year-on-year, home prices fell 1.5%. Eastspring economists noted that current data mainly reflect pre-tariff economic conditions; hard-data impacts from tariffs will only become visible in April and May. Bank of America advised investors to focus on hard data rather than soft data, urging them to 'watch their actions, not listen to their words.' On the geopolitical front, on March 25 local time, the U.S. released a joint statement following trilateral talks among the U.S., Russia, and Ukraine held in Riyadh, Saudi Arabia. The three parties reached partial consensus, including ensuring safe navigation in the Black Sea without resorting to force; the U.S. pledged to facilitate smooth exports of Russian agricultural products and fertilizers; and all sides agreed to protect energy infrastructure from attack. Following the announcement, oil prices turned downward, and fertilizer-related stocks across Europe and the U.S. broadly declined: CF Industries Holdings fell over 3%, Mosaic Company (MOS) dropped approximately 3.5%, and FMC Corporation declined roughly 1.4%; K+S AG and Yara International Group saw shares fall more than 3.7% and 4.1%, respectively. Subsequently, Ukrainian President Volodymyr Zelenskyy confirmed the agreement had entered into force and stated that any breach would trigger direct appeals to the United States. Buoyed by speculation that former President Trump may ease tariff plans, U.S. equities edged higher, extending Wall Street’s Monday rally: All three major U.S. indices rose. The S&P 500 gained 0.16%; the Dow Jones Industrial Average rose 0.01%; and the Nasdaq Composite climbed 0.46%. The Nasdaq-100 rose 0.53%, while the Nasdaq Technology Market Cap Weighted Index (NDXTMC)—which tracks tech-heavy Nasdaq-100 constituents—gained 0.45%. The Russell 2000 small-cap index dipped 0.66%. The CBOE Volatility Index (VIX) fell 1.89% to 17.15. U.S. sector-based ETFs posted mixed results. The network stocks ETF rose 0.9%, and the discretionary consumer ETF gained 0.8%. Financial, energy, global technology, and technology sector ETFs rose between 0.56% and 0.33%. Meanwhile, the semiconductor ETF declined 0.42%, the global airline ETF fell 1.01%, and the healthcare ETF dropped 1.28%. The utilities ETF slid 1.6%, and the biotech index ETF fell 1.73%.

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