# China - commodity stockpiling?



## SirHenry (14 February 2010)

Some market commentators have suggested that China has been stockpiling commodities.  If that is true then do we know the size of the stockpiles?  How long would they last at current rates of consumption?  Six months?  One year? Two years?


----------



## So_Cynical (14 February 2010)

*Re: China - commodity stockpiling.*



SirHenry said:


> Some market commentators have suggested that China has been stockpiling commodities.  If that is true then do we know the size of the stockpiles?  How long would they last at current rates of consumption?  Six months?  One year? Two years?




They have been stockpiling for 6 months or more...demand hasn't really slowed so prob irrelevant.


----------



## SirHenry (14 February 2010)

*Re: China - commodity stockpiling.*

Bloomberg says Chinese copper imports will halve. 

http://www.forexhound.com/article/Stocks/Stocks/BloombergChina_Copper_Imports_to_Halve/182894


----------



## Aussiejeff (14 February 2010)

*Re: China - commodity stockpiling.*

They have gone much, much further than simply stockpiling the raw materials.

Also consider that in a desperate attempt to keep millions employed in the cities (for now at least - but what about when their economy actually slows significantly for whatever reason - and it WILL at some point) the Chinese have converted much of their mountainous stockpiles of "raw materials" into an equally massive stockpile of EMPTY skyscrapers, EMPTY office blocks, EMPTY factories and EMPTY multi-story accomodation units.

Sort of a "hidden" stockpile. For some reason, little attention seems to be paid this by the mainstream, dumb, media.

Good grief. If OUR government spent 100's of Billions building 1,000's of empty structures like this, would we gleefully accept it? A resounding NO I suspect! 

Yet here is the Western world applauding & cheering like fawning sycophants for a COMMUNIST regime to do so, because it offers our own greedy societies a brief respite from recession? 

Go figure....


----------



## Trembling Hand (14 February 2010)

*Re: China - commodity stockpiling.*

No mention of china springing a surprise pre new year (yesterday's china new year that is) tightening?


----------



## CanOz (14 February 2010)

*Re: China - commodity stockpiling.*



Aussiejeff said:


> They have gone much, much further than simply stockpiling the raw materials.
> 
> Also consider that in a desperate attempt to keep millions employed in the cities (for now at least - but what about when their economy actually slows significantly for whatever reason - and it WILL at some point) the Chinese have converted much of their mountainous stockpiles of "raw materials" into an equally massive stockpile of EMPTY skyscrapers, EMPTY office blocks, EMPTY factories and EMPTY multi-story accomodation units.
> 
> ...




There are few if any state owned real estate developers. The residential property market is being driven by massive liquidity the same as the US property market....with a big difference, personal savings. Debt levels are rising yes, but it would be a while before we see the levels of consumer debt we see if the west. Keep this in mind.

Also, much of the money spent on stimulus has gone into bridges, subways, roads, airports, sea ports, sewage treatment, gas power plants, agriculture, and on and on. There are no 'voters' to please so they can actually do what is best for the country here with no concern for traditional politics.

A bubble in some areas for sure, but don't compare it to western bubble that occurred recently.

CanOz


----------



## motorway (14 February 2010)

Seven Reasons to Invest in China

http://www.wealthdaily.com/articles/seven-reasons-to-buy-china/2305





> 1. China's cash-fueled bubble trumps a credit or debt-fueled bubble.
> For one, China is being driven by cash ”” not credit. (You may remember this thing called "cash" from back in the day...)
> If you count public and private sources, China has 5% to 6% of global GDP in cash; if you count the broadest measures, China has almost three trillion dollars in foreign reserves. And the economy and tax revenues are growing ”” not shrinking ”” as they are in other parts of the world.





You pay cash... It is YOURS ALWAYS

You use Debt.. maybe it is yours maybe not

CASH is KING

Is it even possible to have a Bubble built with cash ?
As IN A BUBBLE THAT CAN burst ?

Motorway


----------



## CanOz (14 February 2010)

Interesting too Motorway, that currency reserves as high as China has, have their own problem. Generally over history countries that have accumulated huge reserves have not done well, and I'm not fully understanding of the reasons. Perhaps the Duc - ster could help me out on that one. 

Basically from what I've read recently, and I'll try to find the link, China has another problem in the quantity of reserves itself....beside the issue with the currency.

CanOz


----------



## ducati916 (14 February 2010)

CanOz said:


> Interesting too Motorway, that currency reserves as high as China has, have their own problem. Generally over history countries that have accumulated huge reserves have not done well, and I'm not fully understanding of the reasons. Perhaps the Duc - ster could help me out on that one.
> 
> Basically from what I've read recently, and I'll try to find the link, China has another problem in the quantity of reserves itself....beside the issue with the currency.
> 
> CanOz




The reason you are looking for is termed mercantilism As an economic theory, it has been completely refuted. However, like many refuted economic theories, they just refuse to die.

jog on
duc


----------



## ducati916 (14 February 2010)

et al,

Just read the Wikipedia article and have noticed that they don't really define mercantilism in it - rather odd.

Mercantilism is essentially the stockpiling of money. That means you promote exports over imports, trying to accumulate money in the process.

jog on
duc


----------



## ducati916 (14 February 2010)

et al,

Under mercantilism, monopolistic privileges are granted to a few favored firms, permitting them to sell at exorbitant prices while tariffs are enacted to exclude foreign competition. When a nation eliminates imports, it needs to establish its own exclusive colonies to obtain raw materials, so state power is naturally used to carve out and police the resulting colonial system.

Obviously England, at the height of her power, was an empire based on colonialism. China, currently, by purchasing land that provides raw materials, or access to raw materials, is practicing a form of colonialism. Whether it would ever progress to outright war and conquest, we'll just have to wait and see.

jog on
duc


----------



## CanOz (14 February 2010)

ducati916 said:


> et al,
> 
> China, currently, by purchasing land that provides raw materials, or access to raw materials, is practicing a form of *colonialism*. Whether it would ever progress to outright *war and conquest*, we'll just have to wait and see.
> 
> ...




Interesting in that they were quoted in the media in the last 18 months as being the equivalent of colonialists in Africa. 

War is not in the interest of Social Stability, at this stage....

Thanks for the insight Ducs.

CanOz


----------



## ducati916 (14 February 2010)

CanOz said:


> Interesting in that they were quoted in the media in the last 18 months as being the equivalent of colonialists in Africa.
> 
> War is not in the interest of Social Stability, at this stage....
> 
> ...




Agreed, war most certainly is not in the interest of social stability. It is however in the interest of the State, looking to consolidate or expand power in the face of social instability.

Mummy knows best!

jog on
duc


----------



## SirHenry (14 February 2010)

The Chinese economic growth rate in 2009 was 8.7 percent.  What would it have been without the economic stimulus?

How long can China keep pump priming it's economy to maintain an 8% growth rate if export markets remain weak?


----------



## SirHenry (14 February 2010)

Personally I don't think there will be much of a economic recovery in the western world.  Growth will be flat or negative which means the Chinese will have to rely on internal consumption and/or economic stimuli to generate growth.  So the question is whether that growth will be 5% or 8%?  What would happen to Australian iron ore prices if the Chinese economic growth rate fell back to 5%?


----------



## Garpal Gumnut (14 February 2010)

SirHenry said:


> The Chinese economic growth rate in 2009 was 8.7 percent.  What would it have been without the economic stimulus?
> 
> How long can China keep pump priming it's economy to maintain an 8% growth rate if export markets remain weak?




Sir H, remember our economic stimulus went over there as well.

gg


----------



## CanOz (15 February 2010)

SirHenry said:


> Personally I don't think there will be much of a economic recovery in the western world.




The recoveries now have a name "LUV". Europe's will be an "L" shape recovery, The US a "U" shape, and Asia a "V" Shape.

Some guy on Bloomberg reckons so anyway!

CanOz


----------



## nunthewiser (15 February 2010)

CanOz said:


> The recoveries now have a name "LUV". Europe's will be an "L" shape recovery, The US a "U" shape, and Asia a "V" Shape.
> 
> Some guy on Bloomberg reckons so anyway!
> 
> CanOz




Eccies in the watercooler ?


----------

