Assessment of China’s Future Economic Growth Path and the Impact on Commodities Prices

Brookfield Renewable Power (BRP) is an independent power producer with operations in Canada, the US, and Brazil. It is a wholly owned subsidiary of Brookfield Asset Management, a global asset management company. The specific clients within BRP is the Strategy and Market Development Group. This group conducts long-term research on economic, market, and regulatory issues to support Brookfield's investment decisions in power and utilities. A key function of the group is to provide long-term forecasts of energy commodities (natural gas, oil, coal) to underpin investment decisions.

Since undertaking pro-market policy reforms in 1978, China has enjoyed a boom in economic growth. In recent years, growth rates have consistently been in the range of 10%, far surpassing those of developed nations and most other developing nations. Given China’s size, this fast growth has had a major impact on the global economy and, in particular, has driven a boom in commodity markets in the past decade. Indeed, China's seemingly insatiable demand has allowed commodity prices to rebound sharply following the financial crisis despite a deep recession and tepid recovery in developed countries. Many market observers take China's fast growth and its impacts on commodity prices as a given, at least in the medium-term. However, some believe there is more uncertainty than is generally recognized. The objective of the study broadly speaking is to shed light on China's likely growth path over the next ten years and the magnitude of risks to the outlook and to that of commodity markets.