China overtakes US as world's biggest consumer

China is rapidly overtaking the United States in terms of resource consumption, a study has found.

The Earth Policy Institute, a Washington based think-tank, has found that China now eclipses the US in four out of five of the basic food, energy and industrial commodities - grain, meat, oil, coal, and steel.

Now the world's most populous country, China has opened a huge consumption lead over other countries with an intake of 382 million tons to 278 million for the US.

China's 2004 intake of 64 million tonnes of meat has far outweighed the 38 million tonnes consumed in the US. It is also far less evenly distributed - US intake is spread across beef, pork, poultry, while Chinese intake is dominated by pork.

Indeed, half the world's pigs are now found in China.

The use of steel has also soared to levels not seen in any other country, a key indicator of industrial development, and is now twice that of the US: 258 million tonnes in China compared to 104 million tonnes in the US. This is due to China's rapidly urbanising population meaning the country building hundreds of thousands of factories and high-rise office and apartment buildings.

China also outstrips the US in terms of coal use. Coal provides nearly two-thirds of energy demand in China, and the country burns 800 million tonnes annually compared to the 574 million tonnes in the US.

In fact, in terms of raw materials, it is only in terms of oil consumption that the US is now still firmly in the lead. In 2004, the US consumed 20.4 million barrels a day compared to China's 6.5 million. However, China's use of oil is growing rapidly.

With its growing use of coal, oil and natural gas, China could soon rival the US as the world's top emitters, the Institute says.

Outside of raw materials, sales of almost everything in the consumer economy, from electronic goods to cars and mobile phones is also soaring in China.

This is particularly noticeable in the electronics sector. In 1996 China had 7 million mobile phones and the US 44 million. By 2003, China had rocketed to 269 million versus 159 million in the US. By doing this, China is bypassing the traditional landline telephone stage of communication development and going directly to the mobile route.

Personal computer use is also taking off - 36 million were in use in 2003 and the number is doubling every 28 months on average meaning China should catch up with the US number of 190 million in a fairly short space of time.

The Institute report also found that China's voracious appetite for raw materials is helping drive up not only commodity prices but ocean shipping rates as well. In addition, it is also shaping its foreign policy and security planning as strategic relationships with resource-rich countries such as Brazil, Kazakhstan, Russia, Indonesia and Australia, are built around long term supply contracts for products such as oil, natural gas, iron ore, bauxite, and timber.

These strategic ties are welcomed by countries such as Brazil, the report notes, as a counterweight to US influence.

The rapid growth also means the US, the world's leading debtor nation, is now heavily dependent on Chinese capital to underwrite its fast-growing debt. If China decided to divert this capital elsewhere, the US economy could well be in trouble.

The Institute concludes that China should no longer be seen as 'just a developing country'. Instead, it says: "It is an emerging economic superpower, one that is writing economic history. If the last century was the American century, this one looks to be the Chinese century."

By David Hopkins



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