The United States has nine cities with a population of over one million people. Europe has thirty seven. China has 120 to 150. It is forecast that in the next five years the Chinese government will spend five trillion dollars on infrastructure.
By the end of last year, China open 40 new airports, up from 147, and by 2020 will add another 55. Does that hint of an emerging voracious appetite?
And Chinese companies have been on a spending spree the last couple of years, locking up key assets and supplies of raw materials in third world countries, billions of dollars at a time.
China's state-owned metals giant Chinalco signed a $19.5 billion deal with Australia's Rio Tinto that will eventually double its stake in the world's second-largest mining company.
China National Petroleum signed separate agreements with Russia and Venezuela under which China would provide $25 billion and $4 billion in loans, respectively, in exchange for long-term commitments to supply oil.
The China Development Bank struck a similar deal with Petrobras, the Brazilian oil company, agreeing to a loan of $10 billion in exchange for oil.
And they now have their eye on Canada, which by the way, supplies roughly 70% of oil to the U.S.
Reportedly, they are gobbling up copper, other metal and mineral mines, valuable wood forest products, and vast agricultural resources in Africa and South America.
Not to mention food, building materials, and other raw materials right here in this country. Recently, in an interview with China Investment Corp. vice president Gao Xiqing on "60 Minutes" Leslie Stahl reported he had decided to pour 200 billion dollars into the U.S. economy.
So what does this all mean? We first and foremost, things in the U.S. will get more expensive. Secondly, and more importantly, buying an automobile that gets a few extra miles to the gallon will not keep our transportation costs down. Demand for oil alone from China's emerging middle class will far and away nullify any hope we have of fuel efficient autos reducing worldwide demand.
Let's just hope electric, solar, hydrogen and other forms of sustainable energy happens first.
No comments:
Post a Comment