AUGUST 1980 - VOLUME 1 - NUMBER 7
China On the Import Market
by James Ridgeway
China's potential role as a supplier in the world commodities market is viewed with considerable respect, since that nation possesses immense stocks of oil, gas, coal and various non-fuel minerals. If, however, the Chinese economy were to grow, the nation, would become an important purchaser of various raw materials. For example:
While China has substantial resources of iron ore (around 40 billion tons) sufficient to support an expanded steel industry, much of the ore is low-grade and requires blending with higher grade material to make a good feed for blast furnaces. The high-grade ore is purchased from Australia, North Korea, Brazil and, in the future, lndia. The amounts are considerable. Australia, for instance, expects to rank the Chinese as their second biggest customer for high-grade ore, behind the Japanese, within the next several years.
China also has large copper ore bodies, but at present, demand is greater than supply. As a consequence, China imports copper from Peru, where Beijing provided technical aid in the development of the Tintaya copper mind, and from Zambia, where China is due copper in return for its role in building the Tamzam Railway.
Finally, in the critical agricultural field, economic development rests heavily on increased production of fertilizers. China's expansions of its low-grade phosphate deposit mining has been impressive, but China remains heavily dependent on potash supplies from Canada.
The future of the ,depressed oil tanker business is in jeopardy, endangered by Mexico's potential trade with the U.S. and by the rise of independent and government suppliers.
If Mexico becomes the principal source of imported oil for the U.S. by the end of the 1980s-as many industry experts expect-then fewer large tankers will be needed to haul oil from the Middle East and North Africa to the U.S.
Bruce Barnard reports in the Journal of Commerce that the world's major oil-companies are deserting the supertanker as they lose control over oil supplies. Before 1973 the oil majors dominated the tanker-market and dictated the number and size of the ships needed. At time the oil majors accounted for 80 percent of transactions on the spot market. Now the account for 40 percent with independents and governments making up the remainder.
If current negotiations between West Germany and the Soviet Union are successful, West Germany will be importing 24 billion cubic meters of gas per year from western Siberia by the end of the.] 980s. This would represent a full 30 percent of West Germany's projected gas needs, but only three percent of the nation's overall, energy needs. The West German consortium engaged it) negotiations is led by Ruhrgas A.G. and includes an Exxon subsidiary as one of its prime members.
As for fears of West Germany, the linchpin of NATO, becoming strategically dependent on Soviet gas, the Germans scoff. The Soviet Union, they say, is a reliable and honorable trading partner, and the deal will help to diversify West German energy, sources,, providing more stability and security, not less.