On The Importance of China in Emerging Markets

China has the second largest economy in the world with a GDP of over $11.4 Trillion. The country is also one of the largest trading partners in the world. The US is China’s largest trading partner and China exports more goods to the US than it imports.

Below are some fascinating facts about China from a recent by Justin Leverenz at Oppenheimer Funds:

  • China’s GDP is larger than the combined GDPs of Africa, Latin America, India and Russia.
  • The country’s equity market capitalization at about $12 Trillion is the second largest in the world after the US.
  • In the MSCI Emerging Markets Index, China accounts for 29.7% of the index. When MSCI includes A-Shares in August this year the portion will rise to over 37%.

A short excerpt from the piece:

China’s role as a trading partner puts it in a unique position. Indeed, it is the largest trading nation in the world, at $3.96 trillion in net trade activity in 2015. That year, 101 countries and regions had more trade with China than the United States, while 43 (mostly developed countries) had less. In 2014, China accounted for 48% of Taiwan’s exports, 34% of the Philippines’, 33% of South Korea’s, 49% of South Africa’s, 28% of Chile’s, and 24% of Malaysia’s.


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Source: On the Ground in China: Observations from the Middle Kingdom by Justin Leverenz , Oppenheimer Funds

In addition, China is also a voracious consumer of many of the major commodities. For example, according to the author China consumes some 13% of Russia’s oil, 28% of Brazil’s iron ore, 33% of Indonesia’s thermal coal, and 40% of Chile/Peru’s copper. Chinese traders are also major importers of Cobalt from Congo which is used in batteries for electric vehicles according to an article in WSJ this week.

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