world growth

world growth

Tuesday, March 15, 2011

China displaces the United States as the world's largest manufacturer

WASHINGTON — China topped the United States as the world's largest manufacturer for the first time last year, according to a study Monday by economic research firm IHS Global Insight.

China accounted for 19.8 percent of global manufacturing in 2010, compared with 19.4 percent for the US -- $1.995 trillion worth, compared with $1.952 trillion, according to IHS.

But by measures of productivity, China remained far behind the United States, with US manufacturing workers generating more than eight times the value per person than China's.

"In other words, the US manufacturing sector is producing roughly the same amount of output in 2010 with 11.5 million workers as opposed to its Chinese counterpart with around 100 million workers," IHS said.

Japan remained a distant third last year, generating $1.027 trillion by manufacturing, followed by Germany, with $618 billion.

But the most telling indicators were the pace of growth: over 2008-2010, China's manufacturing sector grew at a pace of 20.2 percent per year, while the United States grew at 1.8 percent and Japan at 4.25 percent.

Germany and fifth-ranked South Korea both contracted, and sixth-ranked India grew at 7.3 percent annually.

IHS pointed out that at one-third of the total economy, China's manufacturing sector is far larger as a portion of output than any other country. In the United States, by comparison, the share is just 13 percent of all production; in the other top-ranked countries, it is 15-20 percent.

Wednesday, March 9, 2011

China may become a net importer of rare earth metals

China may become a net importer of some rare earth elements by 2015, based on the growth in clean technology, one rare earths developer said Wednesday.

China currently produces 97% of rare earth metals, which are used in clean technology projects such as hybrid and electric vehicles, solar panels and wind turbines.

"We are watching their production curve," said Jim Sims, director of public affairs at U.S.-based Molycorp.

Sims spoke at a session about rare metals and the electric car at the Prospectors & Developers Association of Canada's conference in Toronto.

Their production might not be as much as believed, he said, adding that in the first half of 2011, China's export quota will continue its seven-year downward trend. Sims quoted the results of a survey conducted by, which said 59% of respondents believe the Asian country will turn into a net importer. Further, Sims said that senior Chinese officials have reportedly said "pointedly" that they are not ruling that out.

Sims noted that China has huge growth in the wind turbine sector and even with the growth of car sales in China, production and use of electric bikes are growing swiftly, too.

Hybrid and electric vehicles come to mind when discussing clean technology and rare metals, and Sims noted that about 12 kilograms of various rare metals are used in these vehicles.

Projecting demand for these vehicles and other clean-technology devices is difficult in part because of how quickly some will depend on supply of the various metals used, said Gareth Hatch, founding principal of Technology Metals Research.

Hatch said in December, the U.S. Department of Energy released a 166-page research paper called "Critical Materials Strategy" which in part estimated the impact of market share and material intensity – how much used for a particular technology - for several rare earth metals. The DOE looked at the potential impact of high and low market penetration.

The DOE reviewed several technology types from advanced batteries, thin-film semiconductors – which are mostly used in solar panels – and phosphors, which are used in LCD and plasma displays and newer light bulbs.

Hatch said the DOE looked at what the supply of 14 various metals would be by 2015 and by 2020. The most critical metal, in terms of high use in clean energy and supply, in the next five years is dysprosium. Others include europium, indium, neodymium, terbium and yttrium. In the short term, lithium is not considered critical based on the projected use and supply, but in the next 5-10 years, it moves into the "near-critical" stage.

Prices for rare earth metals have risen as attention to these elements grows and Hatch said as reality sets in, prices might sort themselves out. "I'm not an economist … but as sources of supply readily available come on stream, we could see a reduction in the price of some. I don't believe they'll fall back to their historical lows because of demand. There are a handful of metals whose price I don't see changing," he said, suggesting that dysprosium and terbium might be two of those.

Tuesday, March 1, 2011

Sanctions helping China do business with Iran

With Iran penalised by sanctions over its foreign and nuclear policies, China profits. In a few years, it has increased its trade with the Islamic Republic tenfold, with oil topping the list. Beijing has close trading relationships with many dictatorial regimes.

Beijing (AsiaNews/Agencies) – Sino-Iranian trade jumped tenfold in ten years, going from US$ 2.5 billion in 2000 to US$ 29.3 billion last year. Iran is now China’s second trading partner after the European Union. This was made possible by sanctions against Iran, which have created more opportunities for trade with China.

“China’s economic ties with Iran have to some extent been made easier by Western divestment,” said An Baojun, a researcher at the Chinese Academy of International Trade and Economic Co-operation.

Many democracies have in fact curtailed or ceased trading with Iran to protest against Tehran’s policies, especially its nuclear programme. Although the Iranians claim the latter is for peaceful purposes, they have failed to live up to their obligations in terms of controls and inspections. This has given Chinese companies an opportunity to fill the gap left by Western firms.

For example, the China National Offshore Oil Corp reached a lucrative deal to develop the North Pars gas fields. SINOPEC gained a 51 per cent stake in developing Iran’s Yadavaran oil field, and Iran agreed to supply China with 150,000 barrels of oil a day for 25 years at market price.

More recently, Japan's unilateral sanctions, passed in September, banned financial activity with 15 designated Iranian banks that could contribute to nuclear activities.

In September, South Korea temporarily closed 102 companies believed to be helping Iran’s nuclear programme, including the Seoul branch of Bank Mellat, an Iranian bank that handles about 70 per cent of South Korean exports to Iran.

Since international sanctions affect primarily weapons or nuclear-related matters, most of bilateral trade between China and Iran is not covered. Thus, Western disengagement has benefitted the mainland immensely.

Trade is expected to hit US$ 50 billion by 2015, said Asadollah Asgaroladi, chairman of the Sino-Iranian Chamber of Commerce, during a meeting in Beijing last month.

Already, China is the largest importer of Iranian goods—last year, the volume was US$ 18.2 billion (US$ 13 billion in oil and mineral fuel).

What is more, “An estimated 30 per cent to 40 per cent of trade with Iran is channelled through its neighbours,” An told the South China Morning Post, countries like the United Arab Emirates.

In June, the UN Security Council issued more sanctions against Iran with the support of China. The United States, EU, Japan and Australia followed with even harsher sanctions. Yet, Beijing continued to boost trade with Iran, selling nuclear technology for example.

Under the present circumstances, Ahmadinejad said, the world needed a “new, humanitarian and fair order which could be defined and established with the help of Iran and China.”

For China, this means mutual respect for independence, national sovereignty and non-interference in the domestic affairs of other nations. Hence, Beijing is prepared to trade with any dictatorship ostracised by democratic states, from Sudan to Zimbabwe and Angola.

Chinese companies are present everywhere, developing energy resources and building infrastructures in countries like Libya, where 36,000 Chinese worked until forced to flee by a popular uprising with major losses for Chinese firms.