Already the biggest exporter, China is certain to become the biggest importer in early 2012. Ultimately the renminbi will take over the dollar.


China imports of selected commodities

Import Statistics

The world took notice in 2009 when China officially became the biggest exporter. But Don Brasher, CEO of Global Trade Information Services (GTIS), thinks that what is about to happen next is even bigger news.

“Probably by the end of 2011 and certainly in early 2012, China will become the world’s biggest importer,” he says. “And, if China is the biggest importer, how much longer will it be before the price of oil and other commodities are set in Renminbi, not US dollars?”

Just-released data compiled by GTIS clearly shows China’s imports rising vertically, with the US, Japan and the major European economies following a flattened trend. “China is the engine of global markets as an importer and no longer as an exporter alone,” Brasher says.

Although GTIS data shows that China already leads imports in a number of commodities, he believes that China’s current growth trends are unsustainable. “It is unrealistic to think that China can continue to grow this fast,” he says. So, China’s current imports of coal and iron ore, for example, are unlikely to continue at current levels. 

But even if its growth rates slow, China will remain the primary importer of such commodities as crude oil, palm oil and timber. Combined with India, undergoing its own economic transformation, the developing world has firmly taken over from the developed countries. The rise of production and consumption of automobiles in China and India, for example, will put pressure on the price of oil and have a corresponding impact on price.

“The biggest buyer on the block really has the leverage,” he notes. “Number 1 is much more important than Number 2”. am not an economic historian but it would be interesting to look at what happened when the US dollar took precedence over British sterling,” Brasher says. “The day is coming –and soon– when the Renminbi will take over from the dollar and that transition could be turbulent for US business, all business really. I think we should all be getting prepared, whether it happens in 2012 or 2015.”

GTIS, whose European Headquarters is in Geneva, provides software and analysis of international trade using official data from each reporting country.