We often read about the size of the ‘China effect’ on the demand for and prices of primary commodities traded around the world. This over-simplification ignores the impact that other emerging market economies are having on the consumption of primary products – indeed a much greater proportion of global economic growth is being provided by the resource-intensive emerging economies. Added together, the emerging economies account for 23% of global GDP whereas the US accounts for around 29%.

That said China remains an important economy in driving the global demand for many commodities. Our chart shows the huge increase in the (US) dollar value of Chinese imports of mineral fuels and metals. China’s share of the global consumption of commodities in 2007 was as high as 46 per cent for Iron ore and 33 per cent for Zinc – whereas for oil it was only 9 per cent.

Commodity / China’s share of global consumption

Crude oil 9
Iron ore 46
Aluminum 25
Copper 21
Zinc 33
Nickel 20

Source: BP and Chinese Ministry of Commerce