Amazing China Graph of the Day

I’ve been meaning to write something about Chinese wages for a while, but haven’t yet gotten around to it. Hopefully I will soon, but in the meantime I think this editorial from the weekend’s FT broadly gets it right. The main takeaway is that this is exactly what we should expect to see given the country’s phenomenal growth and development of recent years; moreover, if we’re serious about wanting to see rebalancing within China and the global economy, this is what we should *want* to see happening. (I find it amazing how many American newspapers have been calling on the Chinese to let the yuan appreciate for years, then when news of wage increases hits the story becomes ‘but this will make our ipods and computers more expensive!’ More on that to come.)

For now, I just want to share the below graph, hidden in the appendix of the World Bank’s recently released Global Economic Prospects, showing metal consumption in China and the rest of the world:

Generally, when you see a graph of consumption of anything that is split between one country and the rest of the world, you’d expect the two series to be measured on separate axes. Not the case here. Eyeballing from the graph, China now accounts for about 40 percent of the world’s metal consumption. Ridiculous.

I think this one graph might sum up the current state of the global economy better than any other. More than anything, it shows that a decade ago, even though China was growing at 10 percent, it was still a small enough economy that it didn’t really affect the global picture. But with China emerging as the soon-to-be-if-not-already second largest economy, that same 10 percent growth rate is reshaping the global economic landscape. And when all other large economies are facing a prolonged slump, suddenly China is more or less the world’s only growth driver – and if you’re a metal exporter, your best friend.