Hi David, Regarding your comment on iron ore prices from March 7th and China's reduced demand due to migrating from importing industrial metals to consumer-led growth. Can you please explain, what is the tipping point for a country to make this transition? What forces the change; what does the transition actually mean in real terms? "Consumer-led growth" is a broad term; what does this specifically mean in Chinese terms? Why does China even need to change?

David Fuller's view

Aspiration - is the main answer in a single word.  Over two hundred years ago, and for centuries before that, China was often one of the leading countries of the world.  However, invasions, warring factions, climate problems and appalling governance ended China’s eminence.  It became a seriously impoverished third world country under Chairman Mao’s reign.   

Deng Xiaoping put China on a recovery path commencing in 1978 and it soon became the fastest growing developing economy in history.  Today, many of China’s citizens are much more highly educated and it has a large middleclass, estimated at well over 300 million people.  They do not want to remain metal bashers.

China is currently engaged in that challenging transformation between a developing and a developed economy.  Not every country with potential succeeds in doing this – Brazil, for instance, due mainly to governance problems and overdependence on natural resources. 

I believe China is succeeding, and its middleclass consumer-led growth helps it to develop higher-end, more profitable products which can also be exported to other countries.  This is more lucrative and less polluting than manufacturing and selling steel and other building materials.  In other words, China would rather build a railroad or nuclear power station for its own use, and then export this technology, rather than import it.