Sources of Chinese Demand for Resource Commodities

Ivan Roberts and Anthony Rush
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Anthony Rush: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: Is China’s demand for resources driven predominantly by domestic factors or by global demand for its exports? The answer to this question is important for many resource-exporting countries, such as Australia, Brazil, Canada and India. This paper provides evidence that China’s (mainly manufacturing) exports have been a significant driver of its demand for resource commodities over recent decades. First, it employs input-output tables to demonstrate that, historically, manufacturing has been at least as important as construction as a driver of China’s demand for resource-intensive metal products. Second, it shows that global trade in non-oil resource commodities can be described by the gravity model of trade. Using this model it is found that, controlling for domestic expenditure (including investment), exports are a sizeable and significant determinant of a country’s resource imports, and that this has been true for China as well as for other countries.

Keywords: China; trade; investment; resource commodities; gravity model (search for similar items in EconPapers)
JEL-codes: F10 F14 F40 Q31 Q33 (search for similar items in EconPapers)
Date: 2010-11
New Economics Papers: this item is included in nep-tra
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2010-08

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