Some Remarkable Statistics on China
In today’s piece, Stephen Roach of Morgan Stanley presents some amazing statistics on China’s economy. Here’s a sampling:
In March 2004, [China’s] growth of industrial value added had surged to an astonishing 19.4% above its year-earlier level.
…[O]ur calculations suggest that China’s increase in industrial output in 2003 was about eight times as large as that of the United States.
…China’s leadership is most focused on bringing the nation’s runaway investment cycle back under control; growth in fixed asset investment spiked at an outsize 43% YoY rate in the first quarter of 2004.
…While [China] accounts for only about 4% of nominal GDP, in 2003 its portion of the world’s total materials consumption ballooned: For crude oil, it hit 7%; for aluminum it was 25%; for steel products, it was 27%; for iron ore, it was 30%; for coal, it was 31%; and for global cement consumption, China’ s 2003 share hit an astonishing 40%.
Roach makes the point that when China’s economy slows (something that the government is currently trying to gently engineer), there will be repercussions far beyond China’s borders. Such statistics provide some compelling evidence that he will be right.
They also provide a pretty good argument for a Chinese revaluation later this year. I had been thinking that the revaluation would happen very late this year or, more likely, in 2005; I’m increasingly wondering if the revaluation can wait that long. The Chinese government may use it earlier than that, as an extremely effective way to curb inflation (especially in imported commodities) and to slow what I would describe as utterly manic business investment.