How does China protect its basic industries?

Filed under: International markets, Industry, Competitive strategy, China, Economic data, Commodities

Unlike the free market economy in the United States, in China companies that develop raw materials are state owned. In a bizarre twist, China is able to stabilize raw material prices more quickly than other developed countries. So where the US Treasury moved to loan money to the auto industry, the Chinese government can step in directly to stabilize prices.

As an example let's look at China's aluminum producers. Back in October Chalco, China's largest aluminum producer, cut production by 720,000 tons or 18%. At that time the price of aluminum was about $2000 US dollars per ton. Now just two months later aluminum supplies are still increasing and prices are still falling. In an effort to "hold the line" and halt the slide in prices, China'a State Reserve Bureau has stepped in and bought 300,000 tons at about $1800 US dollars per ton.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.