China is the engine driving global commodity train

■"Commodities Are Riding on China's Coattails," by Joshua Kurlantzick, New York Times, 19 September 2004, p. BU3.

It's almost hard to understand how important China is becoming for the global economy, but this article gives you a good sense. Here are two eye-popping stats: China now accounts for 30% of world coal consumption and 40% of steel. That burgeoning level of demand has commodities experts talking about a boom market that may well stretch a decade, which will translate into a lot of investment into those industries, because China's rise seems to have caught many there by surprise, so with demand outpacing supply in the shorter-run, prices are rising rapidly since 2001 and that will trigger new investment flows so that capacity catches up. Prior to China's rise, commodities were stuck in a 20-year Bear market, so capacity fell idle over time.

Here's the dig: many of these big global sources for commodities like energy and precious metals either lie deep inside the Gap or are key Seam States like Indonesia or South Africa, so China's rocketing demand is creating economic links between itself and the Gap in ways rather unimaginable not too long ago. So, again, will China need to become more interested in Gap stability and/or shrinking the Gap over time? You tell me.