Sunday, January 10, 2010
China Becomes Top Exporter in the World
Chinese economy on track to grow by 9.5% in 2010
China completed a resurgent 2009 with a huge rise in exports establishing China as the world's biggest exporter, ahead of Germany, for the first time. The juggernaut Chinese economy also revealed record monthly imports of crude oil and a vast renewed appetite for iron ore and copper.
Trade in December, according to figures from China's customs office, showed a massive 17.7% year-on-year jump in exports, dramatically outpacing a forecast for 4% growth. The huge increase came after 13 months of decline.
Crude oil imports averaged more than 5m barrels a day for a month for the first time in December, up by more than a fifth from November, as the country sucked in raw materials at a faster pace than expected.
Imports jumped by 56%, pushing China's overall trade surplus in the month down by 4% from November instead of the expected 3% increase.
While some experts said much of the increase was due to seasonal factors and quirks in commodities markets, it appears that the strength of demand from China is signalling a further rise in global trade during 2010.
Imports of unwrought copper rose by more than a quarter from November to 369,368 tonnes, more than expected, while copper scrap imports jumped an even bigger 46%. Soya bean imports hit a record 4.78m tonnes in the month, with a surge in supplies from the United States and Brazil. Exports of aluminium and finished steel were also up strongly. China's economy is predicted to grow 9.5% in 2010, topping last year's expected figure.
The figure will be welcomed by business leaders who argue that China needs to shrug off the effects of the downturn if global trade is to recover. China is widely seen as a key engine of growth, especially as the US economy remains in the doldrums, with rising unemployment and many of its major manufacturing industries still badly hit.
However, the increased consumption of raw materials is likely to fuel criticism that China is failing to meet its environmental obligations. A dash for growth is seen as incompatible with the need to minimise burning fossil fuels and felling rainforests. Open-cast copper mining and soya bean farming on previously protected rainforest, have been top of environmental concerns for several years.
The development research centre of the state council, a leading thinktank, said China's economy would remain robust as market-driven investment picked up while government-led stimulus spending slowed. It said real estate investment would buoy growth, while inflationary concerns remained mild.
China is understood to have bought oil contracts in Kuwait, Saudi Arabia and other Middle Eastern countries to secure oil supplies ahead of a boom in manufacturing. US and Brazilian farmers are also understood to be ready to increase supplies of Soya beans as domestic demand from the meat industry, which uses soya beans as a feedstuff, soars to record levels.
Adding to environmental concerns, China's steel mills undertook a massive production drive in 2009, partly in response to a $585bn government stimulus plan. Disregarding a 60% collapse in the export market, they produced almost half the world's steel in 2009.
Posted by Richard Wottrich at 3:10 PM