As a result, China is becoming increasingly dependent on the rest of the world for the huge quantities of raw materials that it needs for its economic growth. It is already the world’s largest buyer of copper, the second biggest buyer of iron ore, and the third largest buyer of alumina. It absorbs close to a third of the global supply of coal, steel and cotton, and almost half of its cement. It is the second largest energy consumer after the US, with nearly 70 per cent produced from burning coal. In 2005 China used more coal than the US, India and Russia combined. In 2004 it accounted for nearly 40 per cent of the increase in the world demand for oil. [484] If the Chinese economy was to continue to expand at 8 per cent a year in the future, its income per head would reach the current US level in 2031, at which point it would consume the equivalent of two-thirds of the current world grain harvest and its demand for paper would double the world’s current production. If it were to enjoy the same level of per capita car ownership as the US does today, it would have 1.1 billion cars compared with the present worldwide total of 800 million; and it would use 99 million barrels of oil a day compared with a worldwide total production of 84 million barrels a day in 2006. [485] Of course, such a level of demand would be unsustainable in terms of the world’s available resources, not to mention its global environmental impact, which would be dire.
The effects of China ’s great paradox – namely, a huge abundance of human resources and extremely sparse natural resources – are being experienced throughout the world via the global market. China ’s surfeit of labour has meant that the prices of manufactured goods it produces have fallen drastically while the prices of those commodities that China requires rose dramatically until the onset of the credit crunch. Together these constitute what might be described as the new China-era global paradigm. The great beneficiaries of China ’s growth, hitherto, have been the developed countries, which have enjoyed a falling real price for consumer goods, and those nations which are major producers of primary products. The present global recession has seen a sharp fall in commodity prices, but there is little reason to believe that their rise will not be resumed once economic conditions start to improve again, driven by demand from China and India. The International Energy Agency has forecast that oil prices will rebound to more than $100 a barrel as soon as the world economy recovers and exceed $200 by 2030. [486] The resumption of rising commodity prices will make the present resource-intensive Chinese growth model increasingly, and ultimately prohibitively, expensive. Beyond a certain point, therefore, it will be impossible for China to follow the resource-intensive American model of progress; and that will happen long before China gets anywhere near the US’s present living standards. Indeed, it is already clear that China has decided to pursue a less energy-intensive approach.
