The opinions expressed here are those of the author, a columnist for Reuters.

By Gavin Maguire

LITTLETON, Colorado, May 15 (Reuters) - China remains the world's most energy-intensive economy and top power consumer, but commodities analysts monitoring the country's raw material needs may have to tweak their models to account for key structural shifts in its economic makeup.

A years-long weakness in the property sector - historically the main driver of economic growth - has forced a major recalibration in how the country generates demand, creates jobs and allocates capital.

The result has been a historic contraction in activity associated with the property sector, including in the production and transport of key materials such as steel and cement.

Together, these developments have materially altered the energy and commodities intensity of China's economic inputs, just as steady expansion in high-end manufacturing has drastically changed the country's output mix.

The backdrop has shifted with U.S. President Donald Trump's visit to Beijing this week for a summit with Xi Jinping, where any extension of last year's trade truce - including commitments on rare earth exports - would ease one of the most acute pressure points in global commodities markets.

Here is a breakdown of how China's economy has transformed in recent years and how commodities analysts need to update their models to track the health and trajectory of the world's largest trade partner going forward.

SERVICES SURGE

China's mammoth secondary sector - which includes extraction and refining of raw materials and construction - was key to the country's emergence as the top global commodities consumer since the 1990s.

It was the primary engine of economic growth from the mid-1970s through 2009.

However, since 2010, the services sector - covering finance, retail, insurance and tourism - has overtaken the secondary sector as the main economic driver and the top overall employer.

That shift has been sharpened by the real estate crisis and a near-frozen construction sector.

Overall investment in real estate has contracted steadily since 2022 following a buildup of debt among key property developers, resulting in a record-long contraction across the housing and construction sectors.

The fallout from the real estate crisis has extended deep into the construction materials sector, where output of steel, cement, glass, ceramics and household piping has shriveled to multi-year lows.

China's consumption of thermal coal, natural gas and other key industrial feedstocks used by the construction materials sector has also taken a hit, sending bearish signals across global base materials markets.

One complication for analysts is a sharp upturn this year in China's exports of cement and clinker, which are the main ingredients in concrete production.

Both the volume and value of China's cement shipments have climbed to their highest in well over a decade so far in 2026, according to China customs data, offering a lifeline to producers even as domestic demand remains stunted.

But those same exports threaten to undermine the profitability of producers in other countries due to the scale of China's cement sector, and so may trigger a contraction in total production elsewhere.

HIGH-QUALITY GROWTH

While China's property developers and construction materials producers have struggled, other key parts of its industrial landscape have steadily expanded in recent years, cushioning the economy from a sharper slowdown.

China's output of electric vehicles, renewable energy products, batteries and other technology components has climbed to record highs since 2022, lifting both high-end manufacturing and retail.

For commodities analysts tracking China's economic health, monitoring these segments is now essential.

The scale of China's EV and battery industries alone has reshaped global flows of related commodities, including lithium, graphite, nickel, cobalt and rare earths, of which China is the top global consumer.

Equally important is tracking China's exports of EVs, batteries and renewable energy systems, as the widening reach of China's producers stands to impact the demand profiles for several raw materials markets in scores of countries.

In EVs, batteries and renewable energy systems in particular, Chinese firms account for a vast majority of exports to Europe, Africa, the Middle East and Latin America.

Record-large shipments of cut-priced components are raising tensions with rival producers of those same products and components, especially in Europe.

But China's penetration into markets continues to accelerate, cementing its position as the top supplier of most key clean energy technologies around the world.

The spread of Chinese components is also displacing demand for the raw materials needed to make those same products in importing countries, adding another layer of complexity for analysts.

China's high-end manufacturing reach also extends to nuclear reactors and their constituent parts, with exports of Chinese-made components also hitting record highs so far in 2026, customs data shows.

These exports represent new frontiers for China's manufacturers, which were formerly only bit-part players in the global nuclear reactor industry.

The manufacturing growth across the clean energy spectrum is central to Beijing's long-term vision, and should enable expansion in both domestic output and export reach.

For analysts, keeping pace with China's rate and direction of change is no longer optional - it is the job.

(The opinions expressed here are those of the author, a columnist for Reuters.)

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