China Pushing Oil To $100 Per Barrell May Be Bad, But $10 Per Bushel Wheat Would Be Worse, Says Business Restoration Partners
Doane Advisory Services and Business Restoration Partners are contemplating a detailed macro/resource/financial/agricultural study on the Chinese economy that will offer guidance to just about any company that will feel the effects of developments in Chi
EWING, NJ / PR FREE / Mar 27 2006 -- Imagine that it’s the year 2010, and China has had a bad crop year. In the late 1950s China suffered a devastating famine that resulted in roughly 40 million persons starving to death. If it should happen again, the Chinese have something today they didn’t have in the 1950s: $700 billion of currency reserves with which to buy grain on the open markets of the world.
"Under such a nightmarish scenario there’s really no way to know how high grain prices could go," explains Jim McCune, managing partner of Business Restoration Partners. "The impact of such a famine would spread quickly and be severely felt worldwide." Of course this is a “worst case” scenario that no one expects to happen and is unpredictable in any event. But what about current trends in China’s seemingly unquenchable appetite for resources of all kinds that are visible today- are there things people do know about now that will have a huge impact on American business in the future? The answer is a resounding yes.
To answer this crucial question Doane Advisory Services and Business Restoration Partners are contemplating a detailed macro/resource/financial/agricultural study on the Chinese economy that will offer guidance to just about any company that will feel the effects of developments in China. China’s supply of and demand for energy resources will be an important focus of the study, with the primary focus of the study centered on developments in China’s agricultural markets and their expected impact on world—and particularly American—agriculture.
Concerning agriculture, China’s per capita income is rising and urban residents in China are shifting to better diets that include more animal product protein. "Good, high quality cropland is being lost to factories, housing and parking lots," explains Doane Advisory Service’s Chief Economist Rich Pottorff. "At the same time strong economic growth is causing serious pollution problems for China’s water supply while greatly increasing the demand for water. Only about a decade ago China was self-sufficient in soybean and cotton production – today they are the world’s largest importer for both crops." Further changes are virtually assured as the dramatic evolution of 21st century China continues.
"Our initial work on China’s economy tells us that this information is critical to the success of American businesses, particularly to those involved in either the energy or agricultural industries and a big part of our impetus for doing the study is the piecemeal nature of most information available today on China and the need for a linked, consistent analysis of all the interrelated pieces of the outlook for China’s economy," says Mccune.
This research project is now in only its initial stage. Given the expense and effort involved in a comprehensive study such as this, the study will only go forward if there is enough interest from American businesses to proceed.
To learn more about the study, visit www.business-restoration-partners.com, or contact Rich Pottorff at Doane Advisory Services by phone at (314) 372-3517.
