China: One Hungry Industrial Dragon

The mainland's ravenous demand for commodities and its growing export strength are being felt around the world economy.

For a developing economy, China punches well above its weight class in the global economy. While its $2 trillion-plus economy represents about 5% of global economic output, it consumes about 15% of world energy supplies, 34% of global steel output, and more than half of the total production of cement.

China is now the world's No. 3 trading nation, exporting and importing about $1.5 trillion worth of goods and services a year. Its global trade surplus hit $177 billion in 2006 and is on track to finish this year at more than $220

Energy

Last year, China consumed 15% of the world’s energy to produce 5% of global gross domestic product. Chinese oil companies are prowling the globe for exploration rights and energy assets in Africa and Central Asia, and with good reason. Once an energy exporter, the mainland is expected to import 75% of its crude — nearly twice the percentage today – by 2020 and consume 10.6% of the world's oil, according to U.S. Energy Dept. estimates.

Steel

China’s construction boom and rapid industrialization have led to a huge spike in steel demand in recent years. As a result, the mainland devours about 30% of global steel supplies and has emerged as a huge exporter of steel products, too, much to the consternation of trade officials in the U.S. and Europe.

Cement

Amazingly, China consumes about 54% of global cement output each year, thanks to its nonstop construction boom. It is also a major producer, with a big price edge over foreign competitors. A recent World Bank study notes that cement prices are about $35 per ton in China, compared to $72 per ton in the Philippines, $52 in India, and $50 in Thailand.Coated Paper

Coated Paper

China's exports of coated paper more than doubled in 2006, to $224 million, from their level in 2005, according to U.S. government data. In a sign of rising U.S.-Chinese trade tensions, the Bush Administration has just imposed countervailing duties on Chinese coated paper, alleging that Beijing has engaged in unfair state subsidies for this industry.

Coal

China is the world's second-largest energy consumer after the U.S., and despite huge reserves of coal actually has turned into a net importer of the commodity to keep its power plants up and running. The reliance on coal has created a world-class pollution problem on the mainland, and China is expected to overtake the U.S. as the biggest emitter of greenhouse gases later in the decade.

Textile

The production of fabrics and clothing material is a huge industry in China, and accounts for about 70% of the country’s record $177.5 billion trade surplus last year, according to the Chinese Textile Industry Assn.

Nickel

This metal is used to make stainless steel, and China is the biggest global consumer of the stuff. Nickel prices have vaulted 28% this year, thanks primarily to demand from the mainland. Inventories will be tight through the end of the decade, according to research by Macquarie Bank Ltd.

Copper

Copper prices are at lofty levels and have been on an upward trajectory since 2002, thanks to rising demand from China, which last year grew almost 11%, the fastest pace since 1995.

Zinc

China is the world's biggest consumer and largest producer of this metal, often used to galvanize steel to protect against corrosion. The Shanghai Futures Exchange recently started trading new zinc contracts to give China a greater say in global pricing trends.

Aluminum

China is a huge consumer and producer of aluminum. The country’s aluminum product output jumped about 26%, to 8.148 million tons, in 2006. That ranks No. 2 in the world after the U.S. The mainland’s industry is also hugely profitable