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Is China Leading a Global Rebound?

A read on China's economy through the lens of basic materials imports.

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Given the news of China's surging raw materials imports in the first quarter, it would be easy to jump to the conclusion that the country is quickly on its way to recovering its former economic vigor. Copper and iron ore imports are breaking records, coal companies expect China to become a net importer for the first time in 2009, and the country's demand for imported virgin fiber has surged in recent months. However, after looking at the data more closely, a few themes emerge that point to alternative explanations for China's apparently healthy appetite for raw materials. Further, while we see signs that China's stimulus plan is taking hold, other trends in raw materials corroborate the fact that China's export activity is still relatively weak.

China appears to be stockpiling some key materials for strategic purposes.

Elizabeth Collins has a position in the following securities mentioned above: TX, FBR, MT, VALE. Find out about Morningstar’s editorial policies.

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