Beijing June 30, 2009 A RECORD-BREAKING run of commodities exports to China that has sustained the Australian economy may be set to end, with Beijing officials and advisers announcing an end to "strategic" stockpiling, and massive iron ore contracts likely to expire today. A key state planning official has signalled a halt to government buying of copper, aluminium and other high-value metals because prices have risen too high. "We don't anticipate that the country will continue to build its reserves," said Yu Dongming, the head of the metallurgical department of the National Development and Reform Commission. China's resource buying spree helped Australia be the only significant economy to record overall export growth since the global financial crisis began. Chinese buying has more than offset precipitous falls in orders from Japan, Korea and Taiwan, and helped resources and share prices to recover. Zhang Bin, an economist with the Government's most influential advisers, the Chinese Academy of Social Sciences, warned that Beijing was leaning against Chinese speculative buying of a range of commodities including Australia's most lucrative exports, coal and iron ore. "The commission is acting to reduce pressure on commodities prices and discourage over-production in heavy industry, including guiding steel production and reducing the building of excess capacity," Dr Zhang told the Herald. "Too much increase in inventories of commodities is not a good thing because the economy is still not that strong and cannot consume this level of imports of iron ore and coal."
"We don't anticipate that the country will continue to build its reserves," said Yu Dongming, the head of the metallurgical department of the National Development and Reform Commission.
China's resource buying spree helped Australia be the only significant economy to record overall export growth since the global financial crisis began. Chinese buying has more than offset precipitous falls in orders from Japan, Korea and Taiwan, and helped resources and share prices to recover.
Zhang Bin, an economist with the Government's most influential advisers, the Chinese Academy of Social Sciences, warned that Beijing was leaning against Chinese speculative buying of a range of commodities including Australia's most lucrative exports, coal and iron ore.
"The commission is acting to reduce pressure on commodities prices and discourage over-production in heavy industry, including guiding steel production and reducing the building of excess capacity," Dr Zhang told the Herald.
"Too much increase in inventories of commodities is not a good thing because the economy is still not that strong and cannot consume this level of imports of iron ore and coal."
One of the last sources of irrigation for Bernanke's "green shoots" is being cut off. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
