If you want to know which way the global wind is blowing (or the sun shining or the coal burning), watch China. That's the news for our energy future and for the future of great-power politics on planet Earth. Washington is already watching - with anxiety.

Rarely has a simple press interview said more about the global power shifts taking place in our world. On July 20, the chief economist of the International Energy Agency (IEA), Fatih Birol, told the Wall Street Journal that China had overtaken the United States to become the world's number one energy consumer. One can read this development in many ways: as evidence of China's continuing industrial prowess, of the lingering recession in the United States, of the growing popularity of automobiles in China, even of America's superior energy efficiency as compared to that of China. All of these observations are valid, but all miss the main point: by becoming the world's leading energy consumer, China will also become an ever more dominant international actor and so set the pace in shaping our global future.

Because energy is tied to so many aspects of the global economy, and because doubts are growing about the future availability of oil and other vital fuels, the decisions China makes regarding its energy portfolio will have far-reaching consequences. As the leading player in the global energy market, China will significantly determine not only the prices we will be paying for critical fuels but also the type of energy systems we will come to rely on.

More importantly, China's decisions on energy preferences will largely determine whether China and the United States can avoid becoming embroiled in a global struggle over imported oil and whether the world will escape catastrophic climate change.

David Fuller's view An increasing likelihood of competition for scarce strategic resources has been a Fullermoney theme since we began to talk about a commodity supercycle in 2003. This monthly chart of the Continuous Commodity Index (CCI) (Old CRB) shows that while commodity prices fell sharply during the stock market meltdown of 2008, they were also quick to bottom and have continued to recover.

There are three important reasons for this of which all investors should be aware.

1. The global economy, led by Asia, has been considerably more resilient than forecast by western economists. While they predicted a depression, the credit slump recession was largely confined to OECD countries. The accommodative monetary policies of all governments have fuelled an economic recovery which could actually be gathering pace.

2. The extraction of industrial commodities is increasingly expensive, not least for non conventional crude oil. Agricultural commodities have reminded us that supplies are subject to the vagaries of weather.

3. In a competitive economic environment where no country wants a strong currency, there are limits to the extent to which they can devalue against each other. However, by continuing to print money in excess of GDP growth, countries are ensuring that their fiat currencies will be devalued against most goods and services.

Commodities have been Fullermoney secular themes for a decade and we maintain that they should be well represented in equity portfolios. Since commodity related instruments can be volatile, we also maintain that they are best purchased on easing.