For
George Castro
International analyst
China ended the coronavirus pandemic on January 8and opened up the country to foreign tourists, allowing Chinese travelers to travel abroad.
These totaled 155 million people in 2019 and spent $280 billion outside the People’s Republic.
It is a novelty that has sparked a boom in commodity pricesmetals first, and last week the value of copper rose to $9,000 a ton for the first time since June of last year.
The same happened with iron ore, more than 80% of which China receives from Australia and Brazil, with the price increasing by 50% per tonne since July last year.
The People’s Republic is the world’s largest consumer of raw materialsall together – metalliferous, grainy, energetic – in the last 20 years.
During this period, which began in 2001, was when China, together with India and Asia, entered the world market, triggering the first commodity supercycle of the 21st century.; and from that moment it occupied the place that historically had corresponded to the United States in the world economy since the Second Industrial Revolution, especially in the decisive period of 1840/1880.
This is what suggests that China’s economy, the second largest in the world (US$17.6 trillion/18% of global GDP), it would grow this year between 6% and 8% annually.
China’s growth forecast as of January 8 focuses on the extraordinary spending capacity of its consumerswhich in the pre-pandemic phase accounted for a third of GDP ($7 trillion in 2019).
Therefore, the calculation that Wall Street investors make is that these consumers now have savingsforced by the 3-year abstinence from the pandemic, which amounts – according to JP Morgan – to 830,000 million dollars, just over 4.7% of nominal GDP.
This is that intended to be spent by consumers in 2023; and according to the premise, a significant part will be destined for trips abroad that tens of millions of tourists from the People’s Republic are preparing to make.
All this has been happening since January 8; and what is foreseeable is that in the second half of the year the extraordinary Chinese demand, driven by the strength of its consumers, will experience a phenomenal boom, similar to that of the pre-pandemic phase.
This is what Wall Street’s China stock index (MSCI/China Index) reflects, which has soared 11 times above its actual earnings in the past 3 months and is expected to double its results by the end of 2016. year. .
The same goes for China’s demand for oil, which Goldman Sachs estimates will grow by more than 1 million barrels a day in the first 6 months of 2023, which would push the price of crude oil to $100 a barrel in December of this year or more.
What is remarkable is that this occurs in conditions of full macroeconomic stabilityespecially in terms of inflation. The People’s Bank of Beijing (Central Bank) forecast an inflation rate of 3% annually in early 2022, but the actual level of the CPI (Consumer Price Index) rose to 2% in the year.
So there is no difficulty in increasing the liquidity of small and medium-sized enterprises, and of the national economy in generalas a way to encourage its expansion in the 2nd half of the year.
At the same time, total foreign trade (exports + imports) reached $6 trillion last year, absolute historical record; and the January figures point to an even higher level in 2023.
It of China is not the quantity, but the quality; and the number of small and medium-sized manufacturing and service enterprises that have been fully digitized in the last 2 years has increased by 183% in this period. The result has been that the digital economy as a whole – complete digitization of manufacturing and services – has already reached 40% of GDP and is growing by 8% annually.
Very significant what happened with Internet commerce (“e-commerce”), which grew by 800% from 2021, and It has become the primary expansion channel for small and medium-sized businesses.
China’s growing weight in the world economy has become a crucial element in geopolitical termsespecially when the recession and high inflation seem to hit both the US and Europe.
This is what explains that Washington try to find some kind of agreement with the People’s Republic, such as the one that would be elaborated in the trip that Secretary of State Anthony Blinken is preparing to make in February to China.
The most important issue in world politics is increasingly the terms and conditions for ending the Ukrainian war; and in this crucial task the role of China as a mediator and leader in the post-war reconstruction of Ukraine it is absolutely essential.
It is a historic moment that is approaching; and this happens in a year in which the Chinese economy would grow between 6% and 8% a year with an inflation rate of 2% a year or less. “There’s a dark harmony to things,” Holderlin says.
Source: Clarin
