Just came across this post from NakedCaptialism, particularly some comments regarding growth in China and the impact that high commodities prices is having on it.
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Similarly, EconomPic argues (with charts) that:
Are commodities being driven up by Chinese demand or has China been powered by cheap commodities? The story goes as follows:High growth in China increases the demand for commodities, such as oil
The increased demand increases the price of commodities
A spike in commodity prices hurts Chinese growth prospects
Slower growth decreases the price of commodities
Rinse, repeat…
More skepticism on the "China's growth as manifest destiny" comes from a story by Edward Chancellor in BreakingViews($, free trial):
Chinese export growth is set to fall sharply. Europeans initially took up the slack after the housing bust dented the appetite of American consumers for all things "Made in China." But the credit crunch is wreaking havoc on both sides of the Atlantic. Recent data suggest that European export demand is slowing. Many claim that Chinese domestic consumption will take up the slack. This is unrealistic. As Walker points out, the UK alone consumes more than China and India combined....
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After falling for years, Chinese export prices to the US have started to climb. The combination of rising inflation and the revaluation of the RMB against the dollar means that China in some sectors is losing its position as the world's low-cost producer. Stratfor recently reported that the textile industry, which accounts for half of China's trade surplus, is under stress and clamouring for the reintroduction of export subsidies. As a result of rising costs, Chinese containerboard companies recently stopped shipping their products abroad, according to Fischer International. Newspaper reports relate that some American companies are moving their manufacturing from China back to the US.
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