lundi 23 mars 2015
What China’s ‘new normal’ means for commodities
Posted on 03:06 by nice news
China’s “new normal” economy might suggest merely impressive growth, rather than the magical growth of recent decades. But for natural commodities and large swathes of the world economy, things may never be the same again.
In a new report, Citi argues that global economic growth is now undergoing a fundamental transition, with a shift away from the prevailing model of China as the world’s factory. In the previous decade, China hollowed out industry from just about every corner of the globe as it became the dominant manufacturer of everything from Apple AAPL, -1.25% iPhones to sneakers and furniture. At the same time, it also became the primary driver of global commodity demand, supporting a multiyear commodity super cycle.
But now, as commodities across the board continue to make fresh multiyear lows, it is clear this boom is over. Analysts are now grappling with the wider implications as the price declines stretch from weeks to months, forecasting an upheaval in industry structures, trade flows and commodity markets.
China’s weakening commodity demand looks to be structural and permanent. While recent strength in the U.S. dollar DXY, +0.34%
In a new report, Citi argues that global economic growth is now undergoing a fundamental transition, with a shift away from the prevailing model of China as the world’s factory. In the previous decade, China hollowed out industry from just about every corner of the globe as it became the dominant manufacturer of everything from Apple AAPL, -1.25% iPhones to sneakers and furniture. At the same time, it also became the primary driver of global commodity demand, supporting a multiyear commodity super cycle.
But now, as commodities across the board continue to make fresh multiyear lows, it is clear this boom is over. Analysts are now grappling with the wider implications as the price declines stretch from weeks to months, forecasting an upheaval in industry structures, trade flows and commodity markets.
China’s weakening commodity demand looks to be structural and permanent. While recent strength in the U.S. dollar DXY, +0.34%
What China’s ‘new normal’ means for commodities
Categories: What China’s ‘new normal’ means for commodities
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