글로벌
China Economic Insight Series (28) : Raw Materials Black Hole - Where is China Headed?
2010-02-18DONG,Ai-Ying
목차
요약
Raw Materials Black Hole - Where is China Headed?
The rise in international commodity indices recorded in 2009 was the largest in 40 years. In addition to increasing global liquidity and the growing preference for "safe" assets, the rise in commodity prices has been driven by the "China effect".
China’s growing demand for raw material imports has been a key swing factor for commodity prices and is acting as a "black hole" in the raw material markets. As a result, there is growing interest in the sustainability of China’s demand.
From the beginning of 2009, China saw a strong rise in product imports, especially in the raw materials and energy divisions. Coal, iron ore, and crude oil imports rose 400%, 39.1% and 10.9%, respectively, compared to the year before.
The increase in China’s imports of raw materials is a result of investments in infrastructure- oriented stimulus measures and speculation in the commodity markets driven by excess liquidity. In addition, imbalances in domestic supply resulting from restructuring been another temporary factor driving the rise in raw material imports.
In 2010, investment in public infrastructure is likely to slow sharply as the government adjusts its investment policies, and speculative investment will decline with the gradual implementation of exit strategies. These factors will slow the rise in raw material imports.
Although raw material imports may slow, they will continue to rise on the back of government measures to promote consumer spending and resilient demand driven by improving exports. The appreciation of the yuan would be favorable for raw material imports, but the actual sensitivity of imports to the exchange rate is low.
As a result, China’s demand for raw materials will continue to increase in 2010, but will inevitably slow somewhat in comparison to 2009
- Firstly, the iron ore sector is China’s long-term strategic resource. At the same time, it is difficult to rapidly adjust the scale of domestic production, and imports will continue to grow as a result. However, pace of this growth will slow.
- In the case of coal imports, most supply is domestic, and increasing domestic production combined with rising international coal prices will lead to declining coal imports.
- China’s demand for crude oil is expected to continue rising. Also, natural gas imports will most likely increase significantly in the future due to the Chinese government’s desire to diversify energy consumption.
The rise in international commodity indices recorded in 2009 was the largest in 40 years. In addition to increasing global liquidity and the growing preference for "safe" assets, the rise in commodity prices has been driven by the "China effect".
China’s growing demand for raw material imports has been a key swing factor for commodity prices and is acting as a "black hole" in the raw material markets. As a result, there is growing interest in the sustainability of China’s demand.
From the beginning of 2009, China saw a strong rise in product imports, especially in the raw materials and energy divisions. Coal, iron ore, and crude oil imports rose 400%, 39.1% and 10.9%, respectively, compared to the year before.
The increase in China’s imports of raw materials is a result of investments in infrastructure- oriented stimulus measures and speculation in the commodity markets driven by excess liquidity. In addition, imbalances in domestic supply resulting from restructuring been another temporary factor driving the rise in raw material imports.
In 2010, investment in public infrastructure is likely to slow sharply as the government adjusts its investment policies, and speculative investment will decline with the gradual implementation of exit strategies. These factors will slow the rise in raw material imports.
Although raw material imports may slow, they will continue to rise on the back of government measures to promote consumer spending and resilient demand driven by improving exports. The appreciation of the yuan would be favorable for raw material imports, but the actual sensitivity of imports to the exchange rate is low.
As a result, China’s demand for raw materials will continue to increase in 2010, but will inevitably slow somewhat in comparison to 2009
- Firstly, the iron ore sector is China’s long-term strategic resource. At the same time, it is difficult to rapidly adjust the scale of domestic production, and imports will continue to grow as a result. However, pace of this growth will slow.
- In the case of coal imports, most supply is domestic, and increasing domestic production combined with rising international coal prices will lead to declining coal imports.
- China’s demand for crude oil is expected to continue rising. Also, natural gas imports will most likely increase significantly in the future due to the Chinese government’s desire to diversify energy consumption.
관련 보고서
#중국