Strategic commodity prices are hampering China’s economic recovery. The state is trying to control prices by interventions

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Chinese government institutions have been trying for some time to influence the prices of strategic raw materials on the domestic market. In addition to restrictions on the issuance of some price indices and the investigation of stock market speculation, it was time to sell raw materials from government reserves.

China is the world’s largest consumer, producer or importer of a number of commodities, without which the world’s second strongest economy cannot do without. These include oil, coal, copper, aluminum, zinc or iron ore. However, China is not an isolated country from the rest of the world, so it is virtually impossible for these raw materials to be sold on its market at non-world prices.

However, the government has decided not to take into account how massive price increases in raw materials are hampering Chinese industry and the country’s overall economic recovery. It therefore began to release some commodities to the market from its strategic reserves. These are mainly coal, metals, but also, for example, corn.

However, at least since the spring, Chinese government institutions have been using a wide range of tools to curb price growth. For example, the publication of some price indices was stopped in order to discourage speculative purchases, or the investigation of suspicious trades on commodity exchanges was initiated. According to analysts, however, it is more likely that the cooling of prices will eventually bring about a slowdown in industrial production, which is approaching in China.


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