U.S.-China oil relation still prickly

U.S. analysts say higher energy prices fueled by rising oil costs could be good for business and might even encourage stronger ties between the world’s two biggest energy consumers — a view their Chinese counterparts do not readily accept.

Former Federal Reserve Board economist Kevin Hassett told a briefing on energy issues and U.S.-China relations this week that while an oil price spike may hurt economic growth in the near-term, businesses will be more willing and able to deal with higher energy costs once increases are seen as permanent.

“It is uncertainty (about whether the oil price spike is permanent) that holds off future investments,” said Hassett, director of economic policy studies at the American Enterprise Institute, a conservative think tank, which hosted the event.