HOUSTON (CNNMoney) -- China's massive building boom shows little signs of slowing, bringing with it a huge appetite for raw materials -- and the threat of inflation
That's the outlook from Jing Ulrich, head of China equities and commodities at J.P. Morgan, who spoke at an oil industry conference Monday.
Ulrich said the government plans to build 36 million units of low-cost housing over the next five years. China is also pushing ahead with a plan to build nearly 10,000 miles of high speed rail over the next five years, spending $150 billion a year on the project.
"How much raw material, how much energy is required," said Ulrich, speaking at the IHS CERA annual conference, one of the biggest energy conferences worldwide. "Does the world have enough copper, enough oil to supply China's insatiable appetite?"
But the building boom comes with a dark side: inflation.
Food prices are now increasing at an annual rate of 10%, while wages for factory workers jumped 20% to 25% in the last year, said Ulrich.
The health of the global economy and demand from emerging markets is a key driver for energy prices, particularly oil.
Ulrich made no mention of the recent events in the Middle East, which have helped push crude prices up over $100 a barrel in the last couple of weeks. Several Middle East experts and executives from Persian Gulf oil companies are slated to speak at the conference Tuesday.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.09%||4.03%|
|15 yr fixed||3.25%||3.18%|
|30 yr refi||4.12%||4.07%|
|15 yr refi||3.29%||3.19%|
Today's featured rates:
Shares of several uranium miners are soaring this year on hopes that Donald Trump will commit more investments to nuclear power. But investors need to get careful. The stocks are as volatile as radioactive elements. More
President Trump issued an executive order rolling back Obamacare. Here's what's next for the health reform law. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
If you're smart about when you first claim Social Security, you can increase your benefits and reap the rewards for the rest of your life. More