China: The new colonialists (cost of natural resource binge)

Economist ^ | 03/13/08

[TigerLikesRooster]

China

The new colonialists

Mar 13th 2008

From The Economist print edition

China's hunger for natural resources is causing more problems at home than abroad

THERE is no exaggerating China's hunger for commodities. The country accounts for about a fifth of the world's population, yet it gobbles up more than half of the world's pork, half of its cement, a third of its steel and over a quarter of its aluminium. It is spending 35 times as much on imports of soya beans and crude oil as it did in 1999, and 23 times as much importing copper—indeed, China has swallowed over four-fifths of the increase in the world's copper supply since 2000.

What is more, China is getting ever hungrier. Although consumption of petrol is falling in America, the oil price is setting new records, because demand from China and other developing economies is still on the rise. The International Energy Agency expects China's imports of oil to triple by 2030. Chinese demand for raw materials of all sorts is growing so fast and creating such a bonanza for farmers, miners and oilmen that phrases such as “bull market” or “cyclical expansion” do not seem to do it justice (see special report). Instead, bankers have coined a new word: supercycle.

Not all observers, however, think that China's unstinting appetite for commodities is super. The most common complaint centres on foreign policy. In its drive to secure reliable supplies of raw materials, it is said, China is coddling dictators, despoiling poor countries and undermining Western efforts to spread democracy and prosperity. America and Europe, the shrillest voices say, are “losing” Africa and Latin America.

[TigerLikesRooster]

Ping!

[Travis McGee]

I think that in 100 years, there may be more Chinese in Africa than Africans.

[TigerLikesRooster]

Well, India could be the only country who can put enough heads in Africa to counter Chinese inflow. In that case, Africa will be split by China and India.:-)

[steelboy]

Pretty balance article despite the sensational title.

[ponder life]

The International Energy Agency expects China's imports of oil to triple by 2030.

That's all? I tend to believe it's an underestimate. I've kept track of projections about China in all areas of industry in the last 20 years. Almost all of them have underestimated China, including Chinese projections.

In the 1990's, the Chinese projected they will be manufacturing 7 million vehicles a year by 2010. However, current estimates expect them to reach 10 million this year. And if domestic growth continues (as many expect they would), Chinese auto production will approach 15 million a year (which would put them as the largest auto producing nation in the world in terms of numbers). So, by 2030, there will be alot of autos on China's roads. Not to mention other modes of transportation like air travel, train, etc.

Personally, I believe oil import will increase by at least 5 fold by 2030.

[ponder life]

addendum to post #6:

Chinese auto production will approach 15 million a year by 2010 (which would put them as the largest auto producing nation in the world in terms of numbers).