Date
28 July 2017
China imported a record amount of soybeans last year as prices slumped. Photo: internet
China imported a record amount of soybeans last year as prices slumped. Photo: internet

Commodities slump seen as saving China US$460 bln a year

China may be the biggest beneficiary of the rout in global commodity prices.

Kenneth Courtis, former Asia vice chairman at Goldman Sachs Group Inc., estimated the country’s annual savings at US$460 billion.

About US$320 billion of that is from cheaper oil, with the rest from other energy, metals, coal and agricultural commodities.

The benefits are rippling through the economy, pushing down or steadying prices of everything from home heating oil and gasoline prices to raw materials at factories, Bloomberg reported Monday.

That’s also helping China in its efforts to shift its economic growth model away from a reliance on heavy industries and investment toward consumption and services.

“It’s shown up in low consumer price inflation and more stuff that households have been able to buy,” Louis Kuijs, head of Asia economics at Oxford Economics Ltd. in Hong Kong and a former World Bank economist in Beijing, was quoted as saying.

China saved US$188 billion in import costs last year on a basket of 10 commodities ranging from oil to soybeans and natural gas, the Ministry of Commerce said in a statement this month.

“That significantly cut the costs of domestic companies and improved efficiency,” the ministry’s spokesman said.

– Contact us at [email protected]

FL

EJI Weekly Newsletter

Please click here to unsubscribe