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Special Report: China's Commodity Demand Set to Rise

by Sergio Mariaca on Mar 4, 2016 10:00:00 AM |Share:

economic growth data release TD Economics china

Highlights

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  • Fears of slowing growth in China and the fizzling out of demand from one of the world’s largest consumers
    has weighed on commodity prices in recent months. In our view, these concerns appear to
    be overblown, as the long-term outlook for China and its commodity demand is still favourable.
  • While there are worries that the transition of the economy away from investment-led growth towards
    consumption-led growth will dampen commodity demand, the experience from other emerging markets
    reveals that this evolution tends to be gradual. Indeed, China still has a long way to go in terms
    of infrastructure development, so significant capital outlays – and commodity consumption – will be
    required.
  • Moreover, despite decelerating in percentage terms, growth in commodity demand in China will be
    occurring off a larger base. Hence, in volume terms, consumption gains for some commodities,
    including copper, zinc and oil, are on track to surpass those recorded over the past ten years.
  • What’s more, even if the Chinese economy endures a harder landing than we are forecasting, the
    story will not change as much as some expect, with commodity consumption still likely grow over
    the longer term.

Click here to read the full TD Economics report

 

 

 

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