China: Strange Bedfellow or Sleeping with the Enemy?
By Mike Botta
News out of China continues to paint a more colorful, if not rosy, picture of industrial and manufacturing growth than evidenced elsewhere around the world.
Last week, the World Steel Association said “exceptionally strong growth” in demand for steel has helped boost the overall outlook for world steel, and projected that consumption, while still expected to be down this year, will not fall as far as had been projected earlier this year.
Chinese demand was projected to grow by 18 percent in 2009, and up another 5 percent next year. In contrast, the group said that Western nations, including the U.S., will see demand fall by 34 percent this year, but saw positive growth in 2010.
Strong Vehicle Sales
The news followed reports earlier in the week that vehicle sales in China jumped nearly 80 percent in September, largely driven by tax reductions and government subsidies.
Still, China climbed further ahead of the U.S. as leader in world vehicle sales, posting just over 1 million auto sales out of a total of more than 1.3 million vehicle sales in September, according to the China Association of Automobile Manufacturers.
Sales over the first nine months, according to the group, totaled more than 9.5 million vehicles. U.S. sales were reported to be just over 8 million units during the same period.
Loads of First-Time Buyers
It’s not entirely surprising that China leads the world in auto sales and steel demand, given its large population of potential first-time car buyers and the deep recession that hit the established Western economies much harder than the emerging nations.
World steel and auto executives still see China as representing a huge growth area for their products, and in recent years China has been more responsive to partnership and other arrangements with Western companies.
Here's the Really Bad News
The good news is that China appears to represent huge opportunities for countries and companies worldwide for many years to come.
The bad news is that the Chinese government, while working feverishly to tap Western brain-power, engineering and technical expertise, routinely thumbs its nose at U.S. and other Western initiatives aiming to preserve world peace.
Case in point, Chinese premier Wen Jiabao on Thursday pledged to strengthen his nation’s association and cooperation with Tehran, giving indications to the West that his nation would not support sanctions aimed at Iran over its nuclear program.
We Help Them, They Dump on Us
So, while America strives to support Chinese growth, China is playing footsy with nations that cry “Death to America.”
That’s not only bad news, it’s sad news for all of us in the West as we become ever more dependant – financially and economically – on the whims of players who embrace the success of capitalism, but only to the point that they can play by their own rules.