Eco-Economy Update 2005-1
For Immediate Release
February 16, 2005
CHINA REPLACING THE UNITED STATES AS WORLD'S LEADING CONSUMER
http://www.earth-policy.org/Updates/Update45.htm
Lester R. Brown
Although the United States has long consumed the lion's share of the
world's resources, this situation is changing fast as the Chinese economy
surges ahead, overtaking the United States in the consumption of one
resource after another.
Among the five basic food, energy, and industrial commodities--grain and
meat, oil and coal, and steel--consumption in China has already eclipsed
that of the United States in all but oil. China has opened a wide lead
with grain: 382 million tons to 278 million tons for the United States
last year. Among the big three grains, the world's most populous country
leads in the consumption of both wheat and rice, and trails the United
States only in corn use.
Although eating hamburgers is a defining element of the U.S. lifestyle,
China's 2004 intake of 64 million tons of meat has climbed far above the
38 million tons consumed in the United States. While U.S. meat intake is
rather evenly distributed between beef, pork, and poultry, in China pork
totally dominates. Indeed, half the world's pigs are found in China.
With steel, a key indicator of industrial development, use in China has
soared and is now more than twice that of the United States: 258 million
tons to 104 million tons in 2003. As China's population urbanizes and as
the country has moved into the construction phase of development, building
hundreds of thousands of factories and high-rise apartment and office
buildings, steel consumption has climbed to levels not seen in any other
country. ( See data at http://www.earth-policy.org/Updates/Update45_data.htm )
With oil, the United States is still solidly in the lead with consumption
triple that of China's--20.4 million barrels per day to 6.5 million
barrels in 2004. But while oil use in the United States expanded by only
15 percent from 1994 to 2004, use in the new industrial giant more than
doubled. Having recently eclipsed Japan as an oil consumer, China is now
second only to the United States.
Looking at energy use in China means also considering coal, which supplies
nearly two thirds of energy demand. Here China's burning of 800 million
tons easily exceeds the 574 million tons burned in the United States. With
its coal use far exceeding that of the United States and with its oil and
natural gas use climbing fast, it is only a matter of time until China
will also be the world's top emitter of carbon. Soon the world may have
two major climate disrupters.
In addition to steel, China also leads in the use of other metals, such as
aluminum and copper. Not only has China overtaken the United States in use
of these materials, but it is widening the gap, leaving the United States
in a distant second place.
In another key area, fertilizer--essentially nitrates and potash--China's
use is double that of the United States, 41.2 million tons to 19.2 million
tons in 2004. In the use of the nutrients that feed our crops, China is
now far and away the world leader.
In China's consumer economy, sales of almost everything from electronic
goods to automobiles are soaring. Nowhere is the explosive growth more
visible than in the electronics sector. In 1996 China had 7 million cell
phones and the United States had 44 million. By 2003 China had rocketed to
269 million versus 159 million in the United States. In effect, China is
leapfrogging the traditional land-line telephone stage of communications
development, going directly to mobile phones.
The use of personal computers is now also taking off in China. After a
late start, the number of personal computers jumped to 36 million in 2003
compared with 190 million in the United States. But with the number of
computers in use doubling every 28 months, it will only be a matter of
time before China, a country of 1.3 billion people, overtakes the United
States, which has a population of 297 million.
With household appliances, such as television sets and refrigerators,
China has long since moved ahead of the United States. By 2000, for
example, TV sets in China outnumbered those in the United States by 374
million to 243 million. With refrigerators, perhaps the most costly
household appliance, production in China overtook that of the United
States in 2000.
Among the leading consumer products, China trails the United States only
in automobiles. By 2003, it had 24 million motor vehicles, scarcely one
tenth the 226 million on U.S. roads. But with car sales doubling over the
last two years, China's fleet is growing fast.
And the race is far from over. With a per capita annual income of $5,300,
one seventh the $38,000 in the United States, China has a long way to go
to reach U.S. per capita consumption levels. For example, despite China's
wide lead in total meat intake, the meat consumed per person is only 49
kilograms (108 pounds) a year compared with 127 kilograms (279 pounds) in
the United States. As Chinese incomes rise at a world record pace, use of
foodstuffs, energy, raw materials, and sales of consumer goods are
continuing to climb.
China is now importing 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 world raw materials economy. Its voracious appetite for
materials is driving up not only commodity prices but ocean shipping rates
as well.
The new industrial giant's need for access to raw materials and energy is
shaping its foreign policy and security planning. Strategic relationships
with resource-rich countries such as Brazil, Kazakhstan, Russia,
Indonesia, and Australia are built around long-term supply contracts for
products such as oil, natural gas, iron ore, bauxite, and timber. These
strategic ties it is forming are welcomed in countries like Brazil as a
counterweight to U.S. influence.
China's eclipse of the United States as a consumer nation should be seen
as another milestone along the path of its evolution as a world economic
leader. Its record-high domestic savings and its huge trade surplus with
the United States are but two of the more visible manifestations of its
economic strength. It is now China, along with Japan, that is buying the
U.S. treasury securities that enable the United States to run the largest
fiscal deficit in history.
The United States, the world's leading debtor nation, is now 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 U.S. economy will be in trouble.
China is no longer just a developing country. It is an emerging economic
superpower, one that is writing economic history. If the last century was
the American century, this one looks to be the Chinese century.
# # #
Additional data and information sources at www.earth-policy.org or contact
jlarsen@earth-policy.org
For reprint permission contact rjkauffman@earth-policy.org
NOTE: Earth Policy Institute is planning an Eco-Economy Update that will
examine the lessons for the world of China's adoption of the western
fossil-fuel-based, automobile-centered, throwaway economy.
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