Chinese Economics Thread

[steel21]

A lot of these high quality French perfumes and LV handbags are still made exclusively in France or Europe. However, lower tier western brands like Coach and Michael Kors handbags are now made in South East Asia.

The does not mean China lacks the skills and resources to make bags of the quality.

We've actually bought a Hermes Birkin 2 years ago, and there is really not that much difference in quality between a $10k bag compared to a $3.5k Farragamo, 3k LV or 2k Dior bag, it's all just marketing.

 

[daifo]

The does not mean China lacks the skills and resources to make bags of the quality.

We've actually bought a Hermes Birkin 2 years ago, and there is really not that much difference in quality between a $10k bag compared to a $3.5k Farragamo, 3k LV or 2k Dior bag, it's all just marketing.

+ Scarcity. Companies purposely limit production to make it "collectible" or an investment

 

[gelgoog]

Long term the picture looks pretty grim for thermal coal as China Japan and Korea move towards renewables. Japans thermal coal usage is expected to go into decline from 2023 onwards

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Japan is starting their nuclear power plants back up. I expect LNG and coal usage in Japan to decrease over the next decade. Especially with the population decline. South Korea has nuclear power also. In the long term it is possible Russia will pipe gas to Japan or South Korea.
Right now Russia exports natural gas via boat to Japan from Sakhalin island but there is no reason why they can't build a pipeline if the price is right.

 

[Tam]

That is true to some extent but LNG can only serve cities or region with prebuilt gas pipeline like in major port cities or metropolitan like Shangai, Tianjin, or Guangzhou not the inland or industrial heartland Also they have to built regassification plant and port handling facilities But generally they are easier and faster to built say 2 or 3 years But the pipe line take much longer to built

Many major Chinese cities are near coast anyway, and more of the industry. The reason why industry needs to be in the coast because it is cheaper to export goods and import material via sea and avoid inland freight. Once people can understand the concept of why manufacturing is best near coastal regions for this reason, and why inland regions, states, and nations will always be in a disadvantage for export and wealth, is because of access to the all important sea. This is why geography is important for manufacturing centers and powers.

These LNG liquification centers need to be in the sea because they are dangerous on land, and if they are in land, they are remotely on the coast or an island. You don't want an accident where they go boom within a population center.



Another reason why you want the LNG facilities in the water, is mainly because of the shipping industry itself is becoming a major LNG user. The LNG carrier would transfer the LNG to another LNG tanker that specializes in bunkering LNG to LNG powered ships.

And yet another reason is that the LNG carrier itself can be used as a safe storage facility for the LNG and can lie off the coast for months. This saves you the expense of creating storage facilities on land and building such facilities require going through much bureaucracy and safety work.

Even Nordstream passes through water and heads to a coastal gassification plant.

There is always the threat of leaks within a pipeline that can contribute to global warming. Then the cost of the pipeline vs. fleet of LNG carriers. It might be easier to manage these risks within a ship.

Inland regions which may have the disadvantage of access of fuel borne by ships, can seek other means of energy, including domestic coal, to nuclear energy, to solar energy.

There is another reason, and that is market economics. Gas pipeline suggests fixed buyer in one end to fixed seller to another. With LNG carriers, buyer can pick any seller at the lowest prices, while seller can offload to any buyer willing to buy at the highest rates. This allows them to buy at the lowest offer and sell to the highest bidders, allow them to flexibly adjust market rates. I can be getting LNG from Russia, to Canada or the US, then to Qatar the next. I can choose to sell to Tokyo, or Qingdao or Shanghai or Seoul in the next.

 

[Hendrik_2000]

Well the largest gas user are big industrial plant like Steel, power plant, auto, etc They are not necessary all in the coast. In fact in China case most of them are inland due to vulnerability of attack from sea. In the 60;s major primary industrial plant were moved way inland to Sichuan and other inland provinces .

LNG can supplement the gas supply structure but it cannot replace the stability of long term gas contract via trunk pipe line. You cannot depend on the vagaries of market It can go low one year and when supply tight go sky high next year.

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[localizer]

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New human development index out

China up a lil more (0.755 year preceding)

 

[Tam]

Well the largest gas user are big industrial plant like Steel, power plant, auto, etc They are not necessary all in the coast. In fact in China case most of them are inland due to vulnerability of attack from sea. In the 60;s major primary industrial plant were moved way inland to Sichuan and other inland provinces .

LNG can supplement the gas supply structure but it cannot replace the stability of long term gas contract via trunk pipe line. You cannot depend on the vagaries of market It can go low one year and when supply tight go sky high next year.

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View attachment 66570

Only Russia can potentially supply by land. However, the largest LNG resource Russia has is in the Arctic Circle.

You think its just across the border?



What kind of infrastructure do you think it would take to build a pipeline from that **red** dot on top all the way to China. To ship from that red dot all the way to Dalian, you need to take the Northeast Passage.




Its shorter than going through the Indian Ocean, less the Indian and Australian Navy wants to be a menace, and you don't have to pay an arm and a leg for Suez Canal transit fees, which is goes from hundreds of thousands of dollars per ship.

Even your article shows a gassification plant that happens to be in Dalian, which is a coastal city. In a peninsula. That is not by any means, easy geography. That Dalian plant would have to rely on ship borne sources.

If you want LNG on the western to central parts of China, then pipelines from Kazakhstan would make sense. But for those along the coast, ship borne makes more sense. Static pipelines limit you to one supplier only, which is Kazakhstan, and that also puts you in the mercy of politics there and whatever price they demand.

Variations on the market isn't based on time, but region. Let's say a city like Qingdao may want to pay for more than say in Shenzhen. You can easily adjust for regional demand. If you have oversupply, you can sell it to Korea or Japan if their buying price is right and interests you.

 

[sinophilia]

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New human development index out

China up a lil more (0.755 year preceding)
View attachment 66572

China had the single biggest move upwards in the rankings of all 189 nations/territories in the list!

Sorted by move up in the ranking:

 

[localizer]

China had the single biggest move upwards in the rankings of all 189 nations/territories in the list!

Sorted by move up in the ranking:

View attachment 66575

Nice, I think Eastern Europe living standards is a good target by 2030/35.

 

[Hendrik_2000]

Only Russia can potentially supply by land. However, the largest LNG resource Russia has is in the Arctic Circle.

You think its just across the border?

View attachment 66573

What kind of infrastructure do you think it would take to build a pipeline from that **red** dot on top all the way to China. To ship from that red dot all the way to Dalian, you need to take the Northeast Passage.

View attachment 66574


Its shorter than going through the Indian Ocean, less the Indian and Australian Navy wants to be a menace, and you don't have to pay an arm and a leg for Suez Canal transit fees, which is goes from hundreds of thousands of dollars per ship.

Even your article shows a gassification plant that happens to be in Dalian, which is a coastal city. In a peninsula. That is not by any means, easy geography. That Dalian plant would have to rely on ship borne sources.

If you want LNG on the western to central parts of China, then pipelines from Kazakhstan would make sense. But for those along the coast, ship borne makes more sense. Static pipelines limit you to one supplier only, which is Kazakhstan, and that also puts you in the mercy of politics there and whatever price they demand.

Variations on the market isn't based on time, but region. Let's say a city like Qingdao may want to pay for more than say in Shenzhen. You can easily adjust for regional demand. If you have oversupply, you can sell it to Korea or Japan if their buying price is right and interests you.

What are you talking here There are many gas field in Russia. ARctic gas field is not the only one

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The project aimed at supplying natural gas to China from fields in western Siberia is moving to the

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after Russian President Vladimir Putin gave the green light to the state-owned gas producer on 27 March.

Instead of entering China from the far west, over 3,200km away from Beijing and where central Asian pipeline gas enters China, Russian gas would arrive just 560km away from the capital, in the most populous region where demand is the highest and expected to grow

COMPETITIVE ADVANTAGE