China, the Covid-19 ground zero, has defeated the virus and is now on a global buying spree, snapping up everything from Indian iron ore to oil, copper, nickel and other industrial metals as it strives to revive its lockdown-hit economy.

In fact, when it comes to economic planning, the Chinese only know one way forward: Spend, spend, spend, mainly on infrastructure. So they’re pushing ahead with a $120-billion building plan to double their high-speed rail network and splurging $10 billion to build four new nuclear reactors. And, they want to spend $68 billion on transportation facilities in the Pearl River Delta that would help combine half-a-dozen mega-cities into the world’s biggest megalopolis.

Airports, too, are high on the priority list. One example is Xianyang International Airport, the busiest in north-west China, which will undergo a $6.8-billion expansion to nearly double its annual passenger-handling capacity to 83 million.

The fact is, for the last decade China’s been on an unprecedented construction spree and it isn’t about to let a pandemic get in the way. (Last year, for instance, its steel output was an extraordinary 996 million tonnes, nearly 10 times as much as India’s, the second-largest steel-maker globally.)

Buying spree

The Chinese returned to the economic drawing board almost immediately after lifting its stringent Wuhan lockdown. Starting in May, they began placing orders worldwide as they accelerated their metals-intensive infrastructure binge. The impact of China’s policy stimulus has been felt in India with iron ore sales zooming to 20 million tonnes between January and June, their highest level since 2012. Globally, iron ore prices, which slumped 20 per cent when it seemed bad economic times were on their way, have now shot up by 40 per cent while Indian iron ore prices have rallied 20 per cent in the last month.

What’s more, China’s ongoing recovery in economic activity “will support the prices of most commodities in the second half of 2020 and into 2021,” says Capital Economics’ economist Caroline Bain. And Chinese fiscal support underpinning that strength is only set to increase in the months ahead.

One of the first signals of how the Chinese planned to avert a crippling post-Covid economic crash came when it started snapping up vast supplies of oil in May, a time when the rest of the world was grappling with the pandemic. By June, the country was buying a record 12.94 million barrels per day (BPD). Prices at this point were still at low levels. By August, this had slowed slightly but many Chinese ports still had traffic jams of 15-20 oil tankers waiting to unload. On July 23, it was reckoned tankers carrying 120 million barrels of crude were queued outside China’s ports.

By early September, China’s oil storage tanks were over 70 per cent full and it looked like they might have to halt their buying spree. But the Chinese have propped up oil prices in the last few months and will still be buying enough to prevent a big drop in prices, experts say.

And, now, look at copper, often reckoned to be the best metals indicator of an economy’s health. China has already imported 4.27 million tonnes till now, which will be up 38 per cent from its purchases in 2019, and could top 2018’s 5.3 million tonnes. In July, the Chinese bought a record 762,211 tonnes.

And all this spending is coming even as the increasingly belligerent Chinese square off against the Indian Army in Ladakh’s icy wastelands and conduct military exercises in the South China Sea.

Unlike other countries which have been focussing on consumers, transferring cash directly to individuals to bolster spending on virus-hit businesses, China has devoted its energies to stimulating investment and construction. Domestic consumption represented close to 60 per cent of China’s GDP growth last year so there are questions about how much Beijing’s infrastructure tilt will lift the overall economy. Still, the tea-leaves look promising for China. While ratings agency Fitch expects the global economy to shrink by 4.4 per cent in 2020 (it sees India’s contracting 10.5 per cent), it projects that China’s will grow at 2.7 per cent.

Will China be able to kickstart its own economy and possibly become a locomotive for the world? Beijing certainly thinks so. “During the process of development, China needs natural resources and technologies abroad. This will become an important growth driver for other countries,” Qiu Baoxing, a senior government official, remarked a few days ago.

One thing that seems clear is the economies of countries that have contained the virus, like China and South Korea, are going to be doing far better in the months ahead than nations where the spread has not been curtailed such as India, the US, Brazil and Mexico.

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