China is unlike any other country. It is twice the size of Europe and the US combined in terms of population. So it is a huge empire and giant economy.
My view is that the economy is not growing at the rate the government claims it is. The economy is growing at maximum 4% per annum, because when you look at export and import statistics of countries like South Korea, Taiwan, Hong Kong, Singapore, Thailand, Malaysia, and their trade figures with China, you will find it is not growing or is hardly growing.
Under the interventionists in China there will obviously be monetary easing, fiscal spending and so forth, like anywhere else. And so, they can maybe postpone the problems but in general, I would say the remarkable thing about the last twelve, fifteen years is that in the case of metals, Chinese consumption has grown from 12% of world consumption in year 2000 to now 47% and this Chinese consumption of industrial commodities was just 2 or 3% in 1990. So we’ve had this huge expansion in Chinese appetite for resources.
My view is that China’s demand for raw materials will not collapse, but it will not grow at the same rate anymore or hardly grow at all, except for oil. Their demand for oil will obviously grow in the long-term. But for the industrial commodities, it will slow down meaningfully. And so the impact on other emerging economies where we have hardly any growth at the present time, will be felt. As is the case in the West, real growth will be very difficult for many Asian economies.
