China's economy now focuses on manufacturing and services

China's economy is changing, making it harder for traders and economists to track its needs for raw materials. Until 2020, simple data points, like oil and iron ore imports, were enough to predict China's economic health. However, the country is now leaning more towards manufacturing and services, which require fewer materials. In the past, rising imports of crude oil and iron ore indicated strong demand from construction and industry sectors. But the rise of electric vehicles and a debt crisis in the property market have changed this. Electric vehicle sales surged from 1% in 2015 to 40% in 2024, significantly reducing fuel consumption. Meanwhile, issues in the property sector, a once vital part of the economy, have lowered demand for iron ore. This year, property prices and investments continue to decline, impacting the construction industry. In contrast, manufacturing is thriving. The production of key materials like copper and aluminum has reached record highs, showcasing the shift in economic focus. China's exports of manufactured goods have also recently increased. However, they might face challenges due to new tariffs imposed by the U.S., which could reduce global demand for Chinese products like electric vehicles and solar panels. The U.S.-China trade deficit remains a significant issue, and how China adapts to these changes will be closely monitored in 2025 and beyond. Traders and economists will need new data points to assess the evolving landscape accurately.