Thursday, September 26, 2013

11 Charts on China -- See If You Can Spot the Trend

I'm trapped in the Palm Beach County Courthouse, waiting to be called to serve on a jury. And before you lecture me about how our forefathers fought for this right, believe me, they already guilted me about it. Meanwhile I do have internet access, and these charts from Reuters on China are really catching my eye.  See if you can spot the trend ...

First, China's PMI and Industrial Output ...

While fairly flat, PMI is also turning up.

But we're told that the Chinese fake their economic numbers. Well, you can't fake power use, can you? Let's look at that ...

Well, one reason they're using more power is all the aluminum they're making ...

But here's the funny thing -- they're also IMPORTING more aluminum ...

And China is also producing more copper.

And China is importing a lot more LNG, I guess to produce all that power ...

And it's also importing more coal.  My friend Jeb may find this next chart interesting ...

China's oil imports are up year over year.

And those hungry-hungry Chinese are eating more, so they're importing more grain.

Meanwhile, China has imported 600 tons of gold year-to-date (hat-tip @KoosJansen)

And that leads us to how much gold China is stocking up.

What do you suppose they're stocking all that up for, eh?

So, what all these charts tell me is ...

  • China's economy is growing
  • China is using more commodities of all types
  • China is getting richer.
  • The richer they are, the more food the Chinese eat and the more gold they buy.
  • China's government is very keen on gold as well.

What do all these charts tell you?


  1. We are witnessing the decline of world power of the US and the rise of China.

    The same happened last century: In 1900 Great Britain controlled half of the world's land mass and the pound, the British currency, was the defacto world's reserve currency. Then GB decided to wage a war of choice, WWI, amassed huge debts which it could not pay back. As their paper currency lost value, they could no longer afford to maintain their empire. Now they are a small island nation whose main export is, IMO, scandal and gossip about the royal family.

    America's decline will not be as dramatic. Our physical land mass and natural resources are much greater, our social class system much less entrenched. In fact, we may become a better country, we would not have to spend the majority of our tax money on the US military. We would no longer be "the cops of the world". Imagine if the majority of US tax money was spent to actually improve America and the lives' of Americans. Thank you, Tim Murphy

    1. thanks for writing in, Tim.Your comment about expensive wars of choice is well-taken.
      Of course, as Yogi Berra said, "The thing about the future, is it's hard to predict." But we all take a shot at it anyway, me included.

    2. John Kaiser likes to make this point, that we might be moving into a multilateral world.

      Two effects of this:

      One, gold competes with US Dollar as a reserve asset or insurance against existential risk. If US Dollar is losing supremacy, that's good for gold as far as central bank reserve buildups go.

      Two, the US essentially subsidizes oil prices with their military - by maintaining a huge military presence in the Middle East and maintaining control of the world's oceans. Now, however, their military is essentially subsidizing oil prices for the Chinese. Someday the American people will figure this out, and then the US will be able to cut their military spending and save hundreds of billions of dollars a year.

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  3. Anyone who has travelled in China can attest to the enormous number of LNG powered vehicles on the road, mainly city buses. The growth of the cities demands more of these so of course LNG is going to be in demand.

  4. As IWNATOS links to/points out on his blog, there is something weird about China's aluminum production numbers.