China's Emergence as a Superpower (2015 onwards)

[davidbfpo]

IMHO a strange article from WoTR which suggests the Australian-US alliance is threatened by the Chinese ownership of the port facilities @ Darwin:http://warontherocks.com/2015/12/wha...in-australia/?

Here is a sample passage:

....Australia is betting Chinese access to the Darwin Port will not strategically endanger the presence and training of Australian Defense Force (ADF) units and their American counterparts. The cost-benefit calculations of welcoming Chinese investment just a few miles from U.S. and ADF forces simply do not add up: Greater risks to national security emerge amid limited economic benefits for the Northern Territory. Speculation about whether Darwin will ultimately transition from a Chinese-managed commercial port to a clandestine hub for Chinese espionage of Australian and U.S. forces, or even more seriously, an impediment to the U.S.–Australian security relationship in use as a Chinese naval logistics facility merit closer examination, given implications for Australian and American security and defense ties.

The author overlooks the wider Sino-US relationship, yes ownership of port facilities is noteworthy, a far greater threat to US security is the PRC's ownership of so many US Treasury bonds.

[Firn]

Good catches, those NYT articles are a fine read. Especially the one about Africa.

The author overlooks the wider Sino-US relationship, yes ownership of port facilities is noteworthy, a far greater threat to US security is the PRC's ownership of so many US Treasury bonds.

To be honest the view that Chinese investment into US Treasury bonds is something of a threat is at best overblown. What can they do once they bought them, sell them?

Personally one of the best strategic things happening to the US is the large amount of Chinese money streaming into the country, especially the housing market. While I understand that in some localities this causes problem for US housebuyers overall it provides an economic boost for sellers and builders and might dampen the threat of conflict as increasingly large Chinese assets are put at risk is such case. Even more so if the influx of students continues...

[Firn]

The greatest economic story of the last four decades has been Chinese growth, which has enabled hundreds of millions to escape poverty and to embrace new opportunities. The huge benefits however came with clear costs, of which the air pollution is the most widely known.*

The strategic implications of China's hunger for ressources have been discussed earlier so I want to focus in the next posts on the great Chinese push in renewable energy, electric transport and related factors. Combined it wil reduce or at least dampen some energy imports, although it will hardly change the fact that China needs vast volumes of trade with the rest of the world, especially the west.

Installed Wind capacity has become big but transmission is still problematic:

“China is a vast land, and here in Xinjiang, we’re very far away from the rest of the country,” Zhu said. “We need transmission to send this electricity thousands of miles away.”

Zhu points to the south, where Goldwind has just built nearly a hundred top-of-the-line turbines. The fierce wind blows through them, too, but their blades aren’t turning. Goldwind is waiting for China’s electrical grid to catch up.

The government’s building five ultra-high transmission lines in Xinjiang to send this energy to the places that need it, but it will take time. “A huge transmission line takes three to five years to build, but a wind farm only takes a year to build, said former Goldwind CEO Yu Wuming.

And that’s why, said Goldwind’s Zhu Xinxiang, 40 percent of the electricity generated by Dabancheng in the past year went nowhere. The energy could have powered a million homes, preventing air pollution and reducing China’s carbon footprint, but there weren’t transmission lines in place to carry it all

China has invested more then any country in HVDC lines but there is still much work to be done.



China has vastly expended it's wind capacity and is currently likely World leader however the grid problems will hold energy production greatly back which is a big problem from ROI to pollution.

All in all wind generation greatly profits from the technological developments of the last years and the sparsely populated interior regions should increasingly provide the densly populated coastal East with electricity.



Higher gross capacity will in the long run lessen the storage problem and should push prices down.

The two graphics come from the excellent blog of Ramez Naam.


*It is important to point out that heavy industries and heating with coal had a devastating impact on Chinese cities already fifty years ago, think early late 19th century Europe.

[Firn]

Forget to post the wind potential of China. Obviously such maps should be just taken as a very rough guide at a more or less current state of technology. Developments as those outlined above increase the capacity per area.



The growth of Wind power can be better illustrated with a graph:





That Solar starts to shares some of the problems of Wind is a sign of the times:

Around 9% of China’s solar PV capacity was forced to sit idle for the first six months of 2015, NEA reports, with the northwestern regions of Gansu and Xinjiang home to the majority of dormant generators.

As the pace of renewable electricity capacity accelerates, some sections of the Chinese grid have been unable to absorb the new generation adequately, forcing authority bodies to either delay solar PV connection or leave idle those solar farms that cannot be satisfactorily integrated into the grid.

Of course this also happens to some fossil plants but the nature of renewables with a high initial investment and free energy input make such grid problems a lot riskier for the investors.




Growth has been strong indeed:

According to the latest statistics from China’s National Energy Administration (NEA), installed capacity for the country’s PV power generation reached 37.95 GW as of the end of September, with 31.70 GW provided by PV power stations and 6.25 GW coming from distributed PV power projects. For the nine months, the country added 9.9 GW of PV power generation capacity, an increase of 161 percent when compared with the same period of a year earlier. The amount includes 8.32 GW from PV power stations and 1.58 GW from distributed PV power projects.

I don't know of course the specifics of the Chinese dealmaking but I found the return on investment rather interesting:

China Photovoltaic Industry Association chairman Gao Jifan explained that, throughout the whole industry chain, the internal rate of return for development projects at China’s PV power stations has been ranging between 8 percent and 10 percent, significantly higher than the average level for the manufacturing sector overall.

There is no doubt that China could in the long run replace fossil fuel and even nuclear with renewables when it comes to the production of electricity. It's a question of rather simple math and investmentsm into a process which will take time. But what about heating and transport?

[Firn]

Transport has also undergone a massive transformation in the last decades, be it by air or land, car or train, bicycle or electroscooter. And indeed China has led the world in two-wheeled electromobility, with around 200 million electric two-wheelers moving now mostly people through it's cities and villages.

2015 has been the year where China, the world's largest car market, also took the lead (no pun intended) in electric cars with up to 250000 units sold.

[AdamG]

BEIJING - China has created three new military units and will update equipment as well as modernising its command structure, state media said on Friday, as part of a major overhaul of the armed forces announced by President Xi Jinping in November.

Xi's push to reform the military coincides with China becoming more assertive in its territorial disputes in the East and South China Seas. China's navy is investing in submarines and aircraft carriers and its air force is developing stealth fighters.

At a ceremony on Thursday, Xi inaugurated a new general command unit for the army, a missile force and a strategic support force for People's Liberation Army (PLA), state news agency Xinhua said.

State television showed Xi handing over a large red flag to Li Zuocheng, the new head of the land command force. Li was previously commander of the key Chengdu military region, which includes restless and strategically vital Tibet.

The missile force is taking over from the Second Artillery Corps to control the country's nuclear arsenal but keeping the same commander, Wei Fenghe.

Xinhua said Xi urged the new unit to "enhance nuclear deterrence and counter-strike capacity, medium- and long-range precision strike ability, as well as strategic check-and-balance capacity to build a strong and modern Rocket Force".

His reforms include establishing a joint operational command structure by 2020 and rejigging existing military regions, as well as cutting troop numbers by 300,000, a surprise announcement he made in September.



In a separate report listing the powerful Central Military Commission's recommendations on the reform process, Xinhua said the troop cuts will focus on non-combat personnel.

Phasing out old equipment and developing new weaponry as well as reducing the number of models operated will be another big feature of the reforms, Xinhua said.

China has been moving rapidly to upgrade its military hardware, but integration of complex systems across a regionalised command structure has been a major challenge.

The troop cuts and broader reform programme have proven controversial, though, and the military's newspaper has published a series of commentaries warning of opposition to the reforms and concern about job losses.

Xi has also made rooting out deeply entrenched corruption in the military a top priority, and dozens of senior officers have been investigated and jailed. —Reuters

- See more at: http://www.gmanetwork.com/news/story....g2Af9tjl.dpuf

[Firn]

China's jittery investors/speculators and the opaque regulators with rather counterproductive, often-changing rules offer a first-class movie.



Great stuff. Overall the service factor seems to do very well, put the index is mostly composed by SOE, among them many manufactores. But then again value and price are two different concepts and not necessarily tied closely together, at any rate not in the Chinese stock market.

Lots of movement in the reserves and the currencies, too...