China overtakes US as world's leading consumer
By Emad Mekay

WASHINGTON - China is quickly overtaking the United States as the world's biggest consumer of global resources, energized by a dynamic economy that is growing at a record pace, says a Washington research group. "China is no longer just a developing country. It is an emerging economic superpower, one that is writing economic history," said Lester Brown, founder of the Earth Policy Institute and author of Wednesday's report.

"If the last century was America's, this one looks to be the Chinese century," he said.

The report says China is outpacing the US in four of the five most important commodities: grain, meat, coal and steel. The fifth, oil, is still consumed in the US at rates triple that of China, about 20.4 million barrels per day. But while oil use in the US rose by 15% from 1994 to 2004, its use in the Asian giant more than doubled. China has now surpassed Japan as the world's second-largest consumer of oil after the US, said the report, titled "China Replacing United States as World's Biggest Consumer".

China also consumes about 800 million tonnes of another fossil fuel, coal, which meets nearly two-thirds of the country's energy demand. "With its coal use far exceeding that of the US and with its oil and natural gas use climbing fast, it is only a matter of time when China will also be the world's top emitter of carbon," says the report. "Soon the world may have two major climate disrupters."

Chinese consumption patterns are rising in other categories. It has opened a wide lead with grain: 382 million tonnes, compared to 278 million tonnes of the US last year. Among the three big grains, the world's most populous country leads in the consumption of both wheat and rice, and trails the US only in corn. Among leading consumer products, China trails the US only in automobiles. By 2003, it had 24 million motor vehicles, scarcely one-tenth of the 226 million on US roads. But with car sales doubling over the last two years, China's fleet is quickly catching up.

Sales of electronic goods are growing strong in China. In 1996, China had 7 million mobile phones, by 2003 it had 269 million. This far outpaces the growth in the US, which had 44 million mobile phones in 1996 and 159 million in 2003. The use of personal computers is booming as well, with the number of computers in use doubling every 28 months. Even China's use of fertilizer is double that of the US: 41.2 million tonnes.

Currently, China imports vast quantities of grain, soybeans, iron ore, aluminum, copper, platinum, phosphates, potash, oil and natural gas, forest products for lumber and paper, and the cotton needed for its world-dominating textile industry. These massive imports have put China at the center of the raw materials economy. Its huge appetite for materials has driven up not only commodity prices but ocean shipping rates as well. China's use of steel, a key indicator of industrial development, has also soared. Steel consumption is now more than twice that of the US, driven by urban migration and the construction of thousands of factories, highrises and office buildings.

The US still maintains a wide lead over China in terms of individual consumption patterns, mainly due to the latter's much lower per capita income of US$5,300 - about one-seventh of America's $38,000. However, the report predicts that as Chinese incomes rise at a record pace, use of foodstuffs, energy, raw materials and sales of consumer goods will continue to climb.

Brown said these trends are an early warning that China's rapid growth could lead to a globally unsustainable use of resources. "At one time, it wouldn't have been credible even to ask these questions but now that China has passed the US in aggregate consumption and given the greater momentum for its growth, it sort of gives one license to think about what if they reach US consumption levels in per capita terms," Brown said. "What we are learning from China is this: the Western industrial development model is not going to work for China and therefore for the world - that is, a fossil fuel-based, automobile-centered, throwaway economy."

For example, if paper use per person in China were to reach the US level, China would need more paper than the entire world produces, he said. "They have done that on the national level for a lot of key resources. But what if they do it per person, which means expanding consumption something like four-fold over what it is today?"

The report also examines China's growing influence on the US economy, which has become heavily dependent on Chinese capital to underwrite its fast-growing debt. If China ever decides to divert this capital surplus elsewhere, either to internal investment or to the development of oil, gas, and mineral resources elsewhere in the world, the US economy will be in trouble, the report says.

China's record-high domestic savings and huge trade surplus with the US are just two of the most visible manifestations of its economic strength. It is now China, along with Japan, that is buying the US treasury securities that enables the US to run the largest fiscal deficit in history. "China's eclipse of the US as a consumer nation should be seen as another milestone along the path of its evolution as a world economic leader," Brown said.

(Inter Press Service)