Mittwoch, 1. Juli 2009

China's Growth Potential

Here's a statement that's obviously true:

"China is still comparatively poor. Therefore, it has a lot of growth potential, and can keep growing fast for decades to come."

From a macro point of view, that's surely not wrong.

However, we need to remember that some sectors of China's economy are already much larger than elsewhere:

China has 19 % of the world's population and produces roughly 5 % of the world's GDP (at market-prices; closer to 10 % based on PPP).

But according to this article, China will account for 60 % of the world's 2009 iron ore purchases.

And according to this paper, China produced 35 % of the world's steel and 27 % of the world's aluminum as of 2006 (nearly all of it for domestic use). Both percentages have increased further since then.

Seems to me that China's growth potential in these sectors will be rather limited...

(Just another way of once again stating the obvious: China needs to rebalance its economy.)


  1. (AMM) China accounts for 37.7% of '08 global steel output
    PITTSBURGH 30 June 2009 16:53

    China accounted for 37.7 percent of total world crude steel production last year, according to the 2009 edition of World Steel in Figures published by the Brussels-based World Steel Association.

  2. China's 2009 world market share will be higher still, considering that just about all the world has slashed steel production, while China alone is apparently still increasing it...

  3. I agree with your point that China's growth potential in some sectors is very limited.

  4. But in that case why the party push the growth in that sectors?