Focus on China

Focus on China

I’m KayDee Gilkey with the Market Line Report for January 22, 2013.

The commodity markets were closed yesterday for the Martin Luther King Holiday, so there are no prices to report.

Today rather, we will be visiting with Dr. Dave Kohl, globetrotting emeritus ag econ professor from Virginia Tech who was in LaGrande on Saturday at the ninth annual Cattleman’s Workshop. As always it was good to catch up with Dr. Kohl and learn more.

Kohl: “It’s really interesting in China, its the second largest economy in the world and they’ve actually given financial stimulus to their economy. So their economy is rebounding. So goes China, so goes agricultural commodities because they import a lot of our agricultural commodities. So China is making a very, very good rebound and that may bode fairly well for commodity prices.”

He cites the increase in Chinese household income as an example of their improved economy over the last decade. In 2000, the average Chinese household made $1,090 a year and in 2012 that income had increased to $6,500. Sadly, compare that to U.S. households during that same period. In 2000, the average U.S. household income was $54,000 and it has dropped to $47,500 in 2012.