WHAT'S THE DIFFERENCE?

The State Regulation Centre of Supplies Reserve has bought and sold commodity stockpiles on behalf of the SRB in the local and international markets and ran two operating units -- one for stockpiles, another one for commercial trading, Jing said.

He added that the commercial part had been profit-oriented and supported the cost of running the agency. In 2005, a senior SRB official told Reuters that the unit had to keep at least 1 million tonnes of copper as basic stocks and it could sell any copper in excess of that amount.

But the unit probably would no longer do such commercial trading and from now on would only work on stockpiling plans set by the government, Jing said.

The SRB may still consider prices but that should be no longer the first thing they think about," he said.

With strengthened roles for macro and emergency needs, the SRB may sell stockpiles in the domestic market at much lower than market prices if inflation threatens the economy in future, Jing added.

The change could allow the SRB to carry out the government's stockpiling plans without much regard for profits and losses, which could see the state body buy the most-needed commodities such as copper even if prices are high.

The SRB is believed to hold some 1.2-1.3 million tonnes of copper as a strategic reserve to meet its role as a swing player in tamping down prices if needed while ensuring China's explosive economic growth is not held hostage to sharp breaks in supply.

Its buying plans for 2011 could move global prices at a time of tight supply and as consumption in China is expected to rise 8 percent to 7.34 million tonnes, from 6.8 million tonnes this year, according to state-backed research firm Antaike.

Industry sources have previously told Reuters the SRB has a government directive to control 2 million tonnes of copper stocks by 2015.

David Fuller's view Every country should be so fortunate. Wisely, China is clearly using its financial strength to stockpile key resources where it could be vulnerable to future shortages, whatever their cause. Copper is obviously one example because China imports over half of its annual requirement for this metal and that dependency on external supplies is likely to increase.

China also imports large quantities of essential foods, not least corn, soybeans, rice and wheat. What other strategic resources might China stockpile?

Uranium, as we have seen from mid-year 2010, and probably any other commodity with a long shelf life, subject to price and future requirements.

Here is a report on US strategic stockpiles: DLA Strategic Materials. I do not know the current administration's views regarding strategic stockpiles, but policy will also be influenced by what the USA can afford.