China has massive coal reserves, almost the size of the U.S. coal reserves. Once China revalues their Yuan, the PLA will come under pressure to reduce oil imports.
That pressure should tip China to liquifying coal into coal oil (which every diesel engine on every cargo ship, warship, diesel-electric train, et al can burn with no mechanical or electronic modifications).
Coal oil fueled the entire German military machine during WW2; it also powered South Africa through its Apartheid sanctions (SA still runs one giant coal oil refinery today).
One ton of coal (cost: $60) makes 4 tons of coal oil...a very favorable economic comparison to unrefined crude oil at $60 per barrel.
...And China isn't burdened by silly "enviornmental" restrictions on burning smelly coal oil in diesel engines. They'll laugh at our high oil costs once they make the switch to coal oil.
won't quibble over the rest of it, but how do you get four tons of oil from one ton of coal? There must be more to the process than just dumping a ton of coal into the digester.