Are We Nearing a Turning Point?

China is not just driving the shipping market to historical highs. Its demand for raw material imports has driven up the prices of oil, steel, and copper to record levels. China’s economy is now expanding at its highest rate ever of 9.5% during the first 9 months of 2004, implying a record-shattering 12% plus annual growth rate. At that rate of compound growth, China’s economy doubles in about six years, which means a doubling of energy (oil) demand, steel demand, and demand for every other industrial commodity. However, this doubling of demand assumes a straight line extrapolation of current trends. There is something in this world we can depend on: straight line extrapolations are the worst possible assumption one can make in a forecast. Download here