The following article is taken from Lutte de Classe (Class Struggle), Issue 170, September-October 2015, the magazine of Lutte Ouvrière (Workers Struggle), the revolutionary workers group active in France. Although it’s a few months old now, it is still highly relevant. Keep in mind, however, that since this is a northern hemisphere publication, when they refer to summer it would be winter in NZ, etc. Also the dollars referred to are US dollars.
In the summer of 2015, China was at the center of economic uncertainty. Stock market crashes in Shanghai brought about the fall of financial markets worldwide. The yuan was devalued, leading to talk of a currency war. The prices of raw materials rapidly declined. And finally, the International Monetary Fund (IMF) lowered its estimates of global economic growth.
The most tangible event was the fall in the prices of raw materials, but in fact this was also the oldest trend. Between 2011, when raw materials were at an all-time high, and today, the decline in the prices of coal, iron, copper, nickel and oil, among others, has been on the order of 50%. More than a crash, this is actually a long trend of decline, with prices returning to what they were before the crisis of 2008. This tendency has accelerated in the past few months. The price of coal has gone from $117 per ton in 2011 to $66 per ton in 2014. The price of iron has fallen from $170 to $60 per ton. For copper, the trend of decline has continued since its peak of $10,000 per ton in 2011. Its price today is around $5,000 per ton. The price of nickel fell by even more, from more than $26,000 per ton in 2011 to less than $10,000. Oil prices are the most striking example of this acceleration, with the price of a barrel of Brent Crude falling from $120 in 2011 to $110 in 2014, then to less than $50 in the summer of 2015.
This fall has generally been interpreted as the consequence of the breakdown of growth in the Chinese economy. China is the last of these so-called “emerging” countries that the politicians and leaders of the system used to present as capable of being “engines” for global growth or, in other words, to offer markets and outlets to Western corporations. These “emerging” countries, not so long ago draped in praise, are now being singled out as Read the rest of this entry »