GENEVA — Robust growth, rapid industrialization and the elimination of global quotas for textiles and apparel enabled China to increase its share of global consumption of cotton to 39.2 percent in 2005, up from 29.4 percent in 2002, according to a U.N. report.
“China has become a major player in many commodity markets, both as a consumer and producer, with a strong influence on prices,” the report said.
The U.N. Conference on Trade and Development report highlighted that from 2002 to 2005, China’s consumption of cotton expanded by 59.5 percent, or almost three times more than the global rise of 19.6 percent.
In 2005, China’s industrial production increased by 11.4 percent and the gross fixed investment rate was 44 percent of gross domestic product, according to official data cited.
China’s strong demand for cotton, U.N. economists estimated, accounted for about 89.2 percent of global consumption growth for the fiber from 2002 to 2005.
UNCTAD’s “Trade and Development Report 2006” concluded that it expects Chinese demand for cotton, and other primary commodities such as natural rubber and oil, “to remain robust for some time.”
But the report cautioned the outlook for commodity prices “is strongly determined” by the evolution of the world economy.
The study said there is “a downside risk on demand related to the possibility of a recessionary correction to the current global imbalances,” which would adversely impact worldwide growth.
On the global imbalances issue, Supachai Panitchpakdi, UNCTAD secretary general, asserted the U.S. “may become overburdened in playing the lead role as the global engine for growth for too long.”
Panitchpakdi added the world economy may be without the growth stimuli that has spurred it for 15 years.
Moreover, UNCTAD economists consider it unlikely the personal savings rate in the U.S. will decline by another 5 percentage points over the next decade, or that the public budget will be allowed to deteriorate by another 6 percentage points.
In order to avert this potential risk — and relieve the U.S. from the increasingly unmanageable global burden — the report called for a concerted international effort to redress global imbalances through the expansion of domestic demand in major industrialized countries such as Japan and Germany, which have large surpluses.
Related Articles
You May Also Like
A continued gradual revaluation of China’s currency, the yuan, would also help in redressing the imbalances, it noted.