The year 2011 saw a staggering increase in Chinese mining investments in Africa. Whereas these had totalled some $1.5-billion at the end of 2010, by the conclusion of 2011 the figure had rocketed to $15.6-billion. Africa has become the site of almost 75% of Chinese foreign mining investment. The China Mining Association (CMA) reported that, worldwide, Chinese companies invested in 284 mining companies during 2011. These figures exclude the oil and gas sector.
China needs minerals and metals to feed its economy. From 1999 to 2009 the country’s real gross domestic product (GDP) grew at an annual average rate of 10.3%. The Asian giant has become the second largest economy in the world, and, according to The Conference Board’s “Global Economic Outlook 2013” (January 2013 Update), accounted for 16.4% of global economic output last year. (The US contribution was 18.2%; in rather sharp contrast, India was responsible for 6.3%, the whole of Latin America for 7.7%, Russia and Central Asia and South East Europe 5.9%, Africa 3.3% and the Middle East 3.7%. As for Europe – defined as the European Union plus Iceland, Norway and Switzerland – that contributed 20.3%, while the figure for the Euro area was 13.8%.)
The world was, of course, hit by the Great Recession of 2008/2009, and the downturn is by no means over. And China was also affected. Economic growth for 2012 was 7.8%, the Chinese Academy of Sciences (CAS) has reported. But the second semester of the year saw faster than expected growth. The Chinese government’s growth target for the year was 7.5%. Nevertheless, this was the country’s slowest growth rate since 1999 – the rate for 2011 was 9.3% and for 2010, 10.4%.
“China’s economy has maintained steady growth,” reported National Bureau of Statistics Commissioner Ma Jiantang. “The economic situation in 2012 was complex and severe. China’s economic growth rate in the fourth quarter ended a seven-straight-quarter slowdown. However, with great effort, China has implemented a macro-regulation policy and the economy in the fourth quarter picked up and grew by 7.9%.”
This year, however, the economy is expected to start accelerating again. The Academy forecasts the country’s GDP will rise by more than 8%. “We expect that China’s GDP will expand by 8.4 percent year on year in 2013, 0.6 percentage point higher than last year,” affirmed CAS researcher Chen Xikang. “The growth is not large but is still quite significant.”
“China’s job market remains quite steady.We still create lots of new jobs, despite growth has decelerated,” Peking University National School of Development Professor Huang Yiping told China Central Television (CCTV). “At the same time, the government has become cautious in promoting more stimulus policies to promote growth. So I think China may experience the 8 percent growth for a while.” “I think what interesting is that whether we should be pleased or disappointed by the 8 percent growth,” said the Economist’s Asia economic editor Simon Cox, also talking with CCTV. “Eight percent may be the new normal for China’s economy. Eight percent may be enough to keep the labour market fully employed.”
Slowdowns and signs of recovery
The slowdown has not been without its effects. Notably, the Chinese steel industry is suffering from overcapacity and prices last year were back at 1994 levels. The China Iron and Steel Association (CISA) forecast in December that the country’s steel production for 2012 would come to 723-million tons, an increase of 3% over 2011, but that steel consumption would be some 679-million tons, a rise of only 1.8%.
Yet new investment in the steel industry, mostly from the private sector, came to $65.82-billion last year and was 3.9% greater than in the previous year. “The steel industry is facing an increasingly difficult time, and the surplus capacity is worsening,” warned CISA Secretary-General Zhang Changfu in December. “The high investment will apparently intensify the oversupply in the steel industry.” January saw slower steel sales in China, and lower steel prices.
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