Chinese Economics Thread

[Martian]

China overtakes United States as world's-largest electricity consumer

In 2010, China became the first country in the world to smash through the 4,000 terawatt-hours threshold. China consumed 4,190 terawatt-hours of electricity. The United States fell into second place by consuming only 3,876 terawatt-hours of electricity. All hail the new king!

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"China's power consumption up 14.56 pct in 2010 -Xinhua
Mon Jan 17, 2011 2:18am GMT

BEIJING Jan 17 (Reuters) - China's total power consumption in 2010 rose 14.56 percent year on year to more than 4.19 trillion kilowatt-hours, official news agency Xinhua said, citing data from the China Electricity Council."

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"2011 Electricity Demand To Fall Slightly On More Normal Temps - EIA
* JANUARY 11, 2011, 2:16 P.M. ET

NEW YORK (Dow Jones)--Electricity demand consumed across the U.S. is expected to fall in 2011 after surging higher last year on extreme hot and cold temperatures, according to the Department of Energy's short-term energy outlook released Tuesday.

Electricity consumption closely tracks growth in economic activity. But last year unusually hot and cold weather caused demand to rebound sharply as households cranked up their air conditioners and heaters, depending on the season. This activity snapped a rare two-year decline in power demand, caused by the housing crisis that deepened into the worst economic downturn seen in the U.S. in decades.

Total U.S. energy consumption, which rose 4% last year to 10.62 billion kilowatt hours a day, is now expected to significantly lag economic activity amid the return to "more normal temperatures," according to the Energy Information Administration's monthly short-term energy outlook."

[Calculation: 10.62 terawatt-hours a day * 365 days per year = 3,876 terawatt-hours of electricity consumed by U.S. in 2010]

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Rank.....Country.............Value (kW-hours)............Date of Info
1..........United States....3,741,485,000,000.......2009 (actual, see below)
2..........China................3,643,000,000,000.......2009 (actual, see below)
3..........European Union....2,884,000,000,000..........2007 est.
4..........Russia................1,023,000,000,000..........2007 est.
5..........Japan.................1,007,000,000,000..........2007 est.
6..........India.....................568,000,000,000...........2007 est.
7..........Germany................547,300,000,000...........2007 est.
8..........Canada..................536,100,000,000...........2007 est.
9..........France...................447,200,000,000...........2007 est.
10........Brazil.....................404,300,000,000...........2007 est.

References:

United States:

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[tphuang]

i don't think this is actually a good thing. China's GDP is 6 billion compared to 14.6 billion for US. So that means its efficiency when it comes to electricity usage is about 2/5 of US. Not exactly a good thing when your entire country is already all polluted.

 

[nameless]

that's why the world needs to drop USD as the reserve currency and go with real money like gold/silver. US is not doing things to help the world. It is doing things to help itself (although I think it's doing a terrible job of that). There hasn't been any reason for the world to keep US as the reserve currency since the end of Bretton Woods II. You have to use a currency that's independent of domestic politics as the reserve currency.

Triffin dilemma

Have you been to China recently?.....

College graduates tripled in number in recent year, its a matter of supply and demand.
Labor shortages does not mean there is no unemployment, it has to do with specific types of jobs and wages.

dude, the housing bubble in China has some serious social effect. The housing demand in Beijing is created by speculation from coal mine owners and property speculators from the South. If it's based purely on real demand, there is no way housing prices in Beijing would be within the same ball park as housing prices in New York.

The wealth gap between the haves and have nots becomes so visible and that creates social tensions. At the same time, that takes away middle earners the ability to buy housing for their sons to get married. This is the kind of stuff that causes PRC leaders to stay awake in the middle of the night.

There is definitely real demand in Beijing, the population increase, the car ownership and congestion clearly imply a strong demand. And the major gap is between the city and the country side.

a bubble burst is needed to correct the imbalances in the economy and housing market for sure. It will be really good for most of the populations. Of course, this entire bubble is created by the hot money flowing into the country and also the excessive lending by the banks. Once it blows up, it will be horrible for the country, because BOC is explicitly backing all of this debt. At certain point, it needs to allow the banks to fail for their bad lending practices, but I doubt that will happen.

No, a bubble can deflate as well. There are clearly limits real-state lending, and the owners have to become bankrupt for the banks to get involved.

So, what they will do is similar to what the Western countries have already done. Which is bailing out the banks for bad lending practices and not allow anyone to fail. So then, the big banks will keep doing the same thing and continue to create bubbles in the economy. Lol....

Wrong, who is rising interest rates, curbing hot money and lending, rising reserve ratio, building low income housing? Certainly not those western countries, those banks make loans to people who clearly can not afford it, your idea that China follows these countries does not stand to the evidence.

 

[nameless]

i don't think this is actually a good thing. China's GDP is 6 billion compared to 14.6 billion for US. So that means its efficiency when it comes to electricity usage is about 2/5 of US. Not exactly a good thing when your entire country is already all polluted.

In terms of PPP they are about equal and the per capita consumption is much lower for China. Not to mention China's aggressive moves toward renewable energy and nuclear.

 

[Red Moon]

dude, the housing bubble in China has some serious social effect. The housing demand in Beijing is created by speculation from coal mine owners and property speculators from the South. If it's based purely on real demand, there is no way housing prices in Beijing would be within the same ball park as housing prices in New York.

I'm not saying the bubble is based on real demand. Simply, that people need apartments. That's why I said:

Those who have been warehousing apartments may loose a fortune, but that will not affect the poor or middle earners.

The price of apartments sounds to me like the worst problem China faces. And it's worse, because, at least a couple of years ago, some officials seemed to look at it as a way of building wealth (Bush style). Now there's talk of a property tax, which is way overdue, though it looks to me like it will be easy to avoid. At least it's a start. There's also the option of cutting out foreign corporations from real estate development, or limiting them in some way.

The point about latent demand is that the apartments indeed could sell to the ordinary people if prices can be made to come down.

i don't think this is actually a good thing. China's GDP is 6 billion compared to 14.6 billion for US. So that means its efficiency when it comes to electricity usage is about 2/5 of US. Not exactly a good thing when your entire country is already all polluted.

Well, if China produces 8 times as much steel as the US, and similar multiples aluminum and other metals, plus the cars, ships and buildings the stuff goes into, I'm surprised the situation isn't even worse. Increasing gdp at this point should be mainly a matter of raising the technological level. I don't think things will get worse.

 

[KYli]

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China's Economic Growth Accelerates, Adding to Rate Pressure
By Bloomberg News - Jan 19, 2011 9:00 PM ET



China’s growth accelerated to a more-than-forecast 9.8 percent in the fourth quarter, adding pressure for more monetary tightening to counter inflation.

The expansion reported by the statistics bureau in Beijing today compared with a 9.6 percent annual gain in the previous three months. The median estimate in a Bloomberg News survey of 22 economists was 9.4 percent. Consumer prices rose 4.6 percent in December, matching the median forecast.

Chinese officials may keep ratcheting up bank reserve requirements and allow more gains in the yuan after the currency strengthened to a 17-year high as President Hu Jintao visited the U.S. this week. The World Bank sees “considerable scope” for higher benchmark interest rates, with Citigroup Inc. and Credit Suisse Group AG estimating that inflation may peak at as much as 6 percent in the first half.

“Growth won’t be a problem this year,” said Zhuang Jian, a Beijing-based economist with the Asian Development Bank, before today’s release. “Inflation remains the top immediate risk for the economy.”

December’s inflation compared with November’s 5.1 percent annual pace, which was the fastest in more than two years. For 2010 as a whole, consumer prices rose 3.3 percent, breaching a government target of 3 percent.

Overtaking Japan

China’s economy expanded 10.3 percent in 2010 to 39.8 trillion yuan ($6.04 trillion), the fastest pace in three years, the statistics bureau report showed. That compared with 9.2 percent in 2009. The nation’s standing as the world’s No. 2 economy may be confirmed on Feb. 14 when Japan reports gross domestic product for the fourth quarter.

Urban fixed-asset investment rose 24.5 percent in 2010 from a year earlier. Retail sales grew at an annual 19.1 percent in December, partly boosted by inflation, and industrial production rose 13.5 percent, the statistics bureau said. Producer prices jumped 5.9 percent.

Premier Wen Jiabao pledged this week to prevent “abnormal” loan growth amid concern that resurgent lending may add to excess money in the financial system, fueling asset bubbles and inflation.

China’s foreign-exchange reserves jumped by a record $199 billion in the fourth quarter and new loans breached the government’s target for 2010. Companies from Baoshan Iron & Steel Co. to Starbucks Corp. and McDonald’s Corp. have raised prices.

Risk of ‘Overshooting’

Policy makers’ commitment to taming inflation means they risk “overshooting” and causing a slowdown that hampers the global recovery, Allen Sinai, president of Decision Economics in New York, said in an interview in Tokyo this week.

The central bank will increase the key one-year lending rate to 6.81 percent from 5.81 percent this year and let the yuan gain about 6 percent against the dollar, Nomura Holdings Inc. estimated this week.

The Chinese currency closed yesterday at 6.5824 per dollar, with President Barack Obama telling counterpart Hu that the yuan remains undervalued and gains so far have “not been fast enough.” Chinese Commerce Minister Chen Deming said U.S. export controls and China’s role in global manufacturing helped to explain the nations’ trade imbalance.

China aims to hold inflation at 4 percent for the full year, state television reported last month, citing the National Development and Reform Commission, the top economic planning agency.

‘Social Discontent’

Inflation of even that level is “serious” in China, according to Ma Jun, Deutsche Bank AG’s chief China economist. “People are used to low inflation and high inflation will easily cause social discontent,” he said, citing a 1.6 percent average annual rate for the 10 years through 2009.

The central bank has raised reserve ratios for the largest banks to 19 percent, excluding any extra requirements for individual lenders. Still, local-currency lending has already exceeded 1 trillion yuan in the year to date, the 21st Century Business Herald reported, citing an unidentified person familiar with the matter. Lending was 481 billion yuan in December.

The benchmark Shanghai Composite Index rose by the most in five weeks yesterday after speculation that the December inflation number had leaked and was 4.6 percent, less than November’s rate.

--Li Yanping, Zheng Lifei. With assistance from Jay Wang, Sophie Leung and Aki Ito. Editors: Paul Panckhurst, Ken McCallum.

 

[Martian]

China leapfrogs U.S. wind power industry to become #1

A wind farm in Roncheng, China

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"China leapfrogs U.S. wind power industry
January 24, 2011 | 10:24 am
by Tiffany Hsu

Chinese turbines are now harnessing more wind power than machines installed in the U.S., according to a trade group Monday.

For the first time ever, the Asian giant’s capacity –- the amount of electricity that can be generated using wind –- blew past the U.S. to soar 62% to 41,800 megawatts. American-based turbines can produce up to 40,180 megawatts, a 15% jump from the beginning of 2010, according to a report from the American Wind Energy Assn.

The U.S. wind market had a rough year overall, ending 2010 with 5,115 megawatts of new installations –- just half of the record amount put up in 2009. The fourth quarter saw just 3,195 megawatts erected, a slide from the 4,113 installed in the same period in 2009.

The association blamed short-lived government subsidies.

But after a key incentive, the 1603 federal Treasury grant program, was extended for a year in December, the wind industry began to perk up. As 2011 begins, roughly 5,600 megawatts of wind power capacity is under construction, the trade group said.

Some new projects being hammered out include electricity prices set at 5 cents or 6 cents per kilowatt hour, which would make wind power competitive with natural gas, the association said.

“Our industry continues to endure a boom-bust cycle because of the lack of long-term, predictable federal policies, in contrast to the permanent entitlements that fossil fuels have enjoyed for 90 years or more,” said Denise Bode, the group’s chief executive, in a statement.

Companies have built utility-scale wind projects in 38 states so far. Texas leads the pack with 10,085 total megawatts of capacity, followed by Iowa with 3,675 megawatts.

California, which features the windy Altamont Pass and Tehachapi regions, lags in third place with 3,177 megawatts installed."

 

[AssassinsMace]

Re: China leapfrogs U.S. wind power industry to become #1

China to create largest mega city in the world with 42 million people
China is planning to create the world's biggest mega city by merging nine cities to create a metropolis twice the size of Wales with a population of 42 million.

By Malcolm Moore in Shanghai and Peter Foster in Beijing 12:21PM GMT 24 Jan 2011
City planners in south China have laid out an ambitious plan to merge together the nine cities that lie around the Pearl River Delta.

The "Turn The Pearl River Delta Into One" scheme will create a 16,000 sq mile urban area that is 26 times larger geographically than Greater London, or twice the size of Wales.

The new mega-city will cover a large part of China's manufacturing heartland, stretching from Guangzhou to Shenzhen and including Foshan, Dongguan, Zhongshan, Zhuhai, Jiangmen, Huizhou and Zhaoqing. Together, they account for nearly a tenth of the Chinese economy.

Over the next six years, around 150 major infrastructure projects will mesh the transport, energy, water and telecommunications networks of the nine cities together, at a cost of some 2 trillion yuan (£190 billion). An express rail line will also connect the hub with nearby Hong Kong.

"The idea is that when the cities are integrated, the residents can travel around freely and use the health care and other facilities in the different areas," said Ma Xiangming, the chief planner at the Guangdong Rural and Urban Planning Institute and a senior consultant on the project.

However, he said no name had been chosen for the area. "It will not be like Greater London or Greater Tokyo because there is no one city at the heart of this megalopolis," he said. "We cannot just name it after one of the existing cities."

"It will help spread industry and jobs more evenly across the region and public services will also be distributed more fairly," he added.

Mr Ma said that residents would be able to use universal rail cards and buy annual tickets to allow them to commute around the mega-city.

Twenty-nine rail lines, totalling 3,100 miles, will be added, cutting rail journeys around the urban area to a maximum of one hour between different city centres. According to planners, phone bills could also fall by 85 per cent and hospitals and schools will be improved.

"Residents will be able to choose where to get their services and will use the internet to find out which hospital, for example, is less busy," said Mr Ma.

Pollution, a key problem in the Pearl River Delta because of its industrialisation, will also be addressed with a united policy, and the price of petrol and electricity could also be unified.

The southern conglomeration is intended to wrestle back a competitive advantage from the growing urban areas around Beijing and Shanghai.

By the end of the decade, China plans to move ever greater numbers into its cities, creating some city zones with 50 million to 100 million people and "small" city clusters of 10 million to 25 million.

In the north, the area around Beijing and Tianjin, two of China's most important cities, is being ringed with a network of high-speed railways that will create a super-urban area known as the Bohai Economic Rim. Its population could be as high as 260 million.

The process of merging the Bohai region has already begun with the connection of Beijing to Tianjing by a high speed railway that completes the 75 mile journey in less than half an hour, providing an axis around which to create a network of feeder cities.

As the process gathers pace, total investment in urban infrastructure over the next five years is expected to hit £685 billion, according to an estimate by the British Chamber of Commerce, with an additional £300 billion spend on high speed rail and £70 billion on urban transport.

 

[Martian]

China is now the world's third most-popular destination

Popular tourist destinations in China

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"China now the world's third most popular destination
January 27, 2011 - 11:02AM

China has replaced Spain as the world's third most visited country, behind France and the United States, figures from the UN World Tourism Organisation showed yesterday.

China had 55.98 million international arrivals last year, up 10 per cent, edging past Spain, which received some 53 million foreign tourists, a rise of 1.4 per cent, according to figures released by the Madrid-based body.

France remained in top spot, with 78.95 million visitors, followed by the the United States with 60.88 million, up 2.8 per cent and 10.9 per cent respectively.
Advertisement: Story continues below

In 2008, the United States overtook Spain to become the number two destination.

The UNWTO said previously that global tourism rebounded strongly from the economic crisis, jumping 6.7 per cent in 2010 on the back of strong growth in emerging economies, such as China.

"It is clear that the strong players of Asia are going to continue to be the strong players, not only China, but particularly China," UNWTO Secretary-General Taleb Rifai said last week.

"The world is changing, the geopolitics of the world is changing, the centres of gravity are changing and we can't expect tourism to be away from that."

AFP"

Note: Thank you to Brotherhood for the picture collage.

 

[tphuang]

Re: China is now the world's third most-popular destination

Triffin dilemma
College graduates tripled in number in recent year, its a matter of supply and demand.
Labor shortages does not mean there is no unemployment, it has to do with specific types of jobs and wages.

yes and if the wages for those labour jobs go up, a lot of the college grads would give up their dreams and go for those jobs. In fact, you already see that with a lot of young college grads in China. The issue in China is that a lot of people are no longer willing to work for dirt low wages, so there is a shortage in that kind of labour. But there is no shortage of labour in general. If you go to China, you'd see all kind of unproductive jobs because communist gov't need to somehow find employment for people.

There is definitely real demand in Beijing, the population increase, the car ownership and congestion clearly imply a strong demand. And the major gap is between the city and the country side.

there are so many stories of empty homes where people buy property and don't live there, just waiting for prices to go up. That's not real demand, that's speculation. And it's not just in China, it's a phenomenon all across the world.

No, a bubble can deflate as well. There are clearly limits real-state lending, and the owners have to become bankrupt for the banks to get involved.

Wrong, who is rising interest rates, curbing hot money and lending, rising reserve ratio, building low income housing? Certainly not those western countries, those banks make loans to people who clearly can not afford it, your idea that China follows these countries does not stand to the evidence.

yes, China is taking some measures, but it's not enough. When you have that much credit growth (and this has been widely reported), that money has to go somewhere. It will either go in to real estate, stock market, commodity, food/energy or infrastructure projects. In fact in China, it's going to all of the above. You see inflation everywhere because of this tremendous credit growth. Funnily enough in America, even with this huge expansion in money supply, we actually have a credit contraction, because money is not flowing through the economy.

There are some serious problems in China's bank lending. The big SOEs and local governments are getting easy flow of money due to their connections with the banks. The banks are implicitly backed by the government, so they continue their bad lending in spite of official calls to stop lending as much. And a lot of local governments are just wasting money. My hometown in China is building a city wall and a moat. How can that be a good usage of money? So, a lot of those lending get wasted because the money come so easily

At the same time, small business are having trouble getting money from banks, so they get their money from savings and such. And they are so much money efficient in their growth.

In terms of PPP they are about equal and the per capita consumption is much lower for China. Not to mention China's aggressive moves toward renewable energy and nuclear.

btw, I'm not saying that China is not moving in the right direction. There are some fundamental reasons on lower energy efficiency in China. It's always more energy intensive for $1 million of gdp to be generated in manufacturing compared to servicing. However, there are also a lot of areas where things are clearly not been done efficiently. They are building all these wind farms, but a large part of them are not connected to the grid. How can that be a good thing?

I'm not saying the bubble is based on real demand. Simply, that people need apartments. That's why I said:
The price of apartments sounds to me like the worst problem China faces. And it's worse, because, at least a couple of years ago, some officials seemed to look at it as a way of building wealth (Bush style). Now there's talk of a property tax, which is way overdue, though it looks to me like it will be easy to avoid. At least it's a start. There's also the option of cutting out foreign corporations from real estate development, or limiting them in some way.

The point about latent demand is that the apartments indeed could sell to the ordinary people if prices can be made to come down.

the prices will drop eventually and it could really be bad. What you see in China in the big coastal cities is not real demand, but speculation. I don't know how else can you call cases where people buy apartments and then don't actually live there, but just wait for prices to go up. property taxes is just the first step. They need to institute capital gains tax for this too. And also, they need to stop this lending craze + rampant credit growth.

Well, if China produces 8 times as much steel as the US, and similar multiples aluminum and other metals, plus the cars, ships and buildings the stuff goes into, I'm surprised the situation isn't even worse. Increasing gdp at this point should be mainly a matter of raising the technological level. I don't think things will get worse.

yes, part of the lower efficiency is due to manufacturing been a larger portion of Chinese GDP. Things have been getting much better, but things can still improve.