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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (1151)	10/28/2003 11:00:12 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China trade: Damned and damned By John Mulcahy Forty years ago, US president Richard Nixon said that his country could take little comfort from the fact that China and the Soviet Union were in dispute. "They are simply arguing about what kind of shovel they should use to dig the grave of the United States." The world is a different place in 2003. There is no Soviet Union, Richard Nixon is a footnote to history and China's embrace of the markets since the 1970s has ensured that it does not qualify as an "evil empire" or an element of any "axis of evil". But storm clouds there are, as the US and Europe fret about China's continuing economic success. With China's exports to the US this year set to top 2002's US$125 billion, there is a feeling that it may be too late to invoke an Augustinian prayer. "Lord, make them successful, but not yet," is a belated plea. A recent report by US investment bank Goldman Sachs projects China as the world's biggest economy by 2050, eclipsing the US, Japan and Europe. While the prospect of a transformed leader group in the global economy is by no means contingent on the decline of the US, there is no doubt that the dynamics of continued exponential growth in the Chinese economy is producing a far less benign response to Beijing's strategy than has been the case for many years. ... A fascinating study by Daiwa Institute of Research economist Xiao Min Jie traces the success of China's economic story over the past two decades in virtually every sector, and compares it to the reconstruction and subsequent growth of Japan from 1960 to 1980. In virtually every sector of economic activity the growth in output and demand is exponential, not least in the wealth of the people, as per capita income in the urban area has risen from 1,510 yuan in 1990 to 7,703 in 2002, while rural income has risen from 686 yuan to 2,476 yuan over the same period. ... The "China factor" is evident in most commodity markets, with China accounting for 95 percent of the growth in world steel demand since 2000, 99 percent of growth in nickel demand and 100 percent of the growth in copper demand over the past three years. A poor soybean crop in China is currently creating a boom in soybean prices, while China demand is seen to be underpinning global prices of coking coal and iron ore. ... China's Premier Wen Jiabao is due to visit the US soon, and it is likely he will be armed with an impressive shopping list, enough to silence some of the more vocal critics. With foreign currency reserves of more than $350 billion, Wen will have plenty to spend. One thing is sure, whatever the outcome of the current debate over currency and trade, tension between the US, Europe and Japan, on the one hand, and China, on the other hand, will not go away for the foreseeable future. China is the usurper on the stage of global economic giants, and it can only meet its own target of quadrupling its economy by 2020 if it continues to use its elbows. China has already become a market rivaling the US to a host of Asian exporting countries, including Taiwan, Indonesia and even Japan. The complex mix of pressures resulting from its increasing importance as a customer and as a supplier will keep China in the focus for all trading nations. atimes.com