*FIFY
Chinese Economics Thread
- Thread starter Norfolk
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Chinese NBS often underestimates income to make it look like China is poorer than it actually is to avoid WTO obligations for developing countries and not have to provide aid. China has a political identity as a developing country so promoting that narrative is important. This has little material effect on FDI as Chinese FDI is not tied to domestic incomes. So it's purely beneficial for China to overstate poverty.
The US on the other hand has a political narrative of being always the best, richest and most glorious which is why they artificially inflate their GDP with imputed rent (up to 1.8 trillion USD), medical costs etc and underestimate their inflation by excluding food, energy and housing from CPI. Any hint of being poor, in recession or having economic trouble reduces US attractiveness to FDI and depresses consumer spending which has material harm to the economy. US has political motivation to puff themselves up as much as possible.
Jack Ma must be doing his duty to the motherland.
And yet according to one of America's supposed foremost economist, Harvard University President, and former Treasury Secretary, Larry Summers, America must achieved massive unemployment of at least 16 million people to lower inflation. Social unrest that'll follow, misery, crimes etc...and political instability are apparently a nothing burger in America.
Oh but in China any attempts to correct the economy will be seen in a never ending declaration of "China collapse theory." House prices are high? Chinese economy about to collapse. The government crackdown and the values have gone down: China's economy about to collapse, rinse and repeat.
@Bellum_Romanum bro the same nonchalant attitude during the past administration of Benigno Aquino, the Elitism that prevail during his time. Until it affect them then they will respond and IF they do respond the policy is the minimalist effect on them and dammed the rest.
What do you guys think of this article?
So its been discussed before that power consumption got reduced because of the slow down from lockdowns, and this Reuter article doesn't provide numbers or details on China's coal inventories, other than coal import which accounts for 7% of total coal consumption. So how does it turn into a power supply risk even if the coal output is high? is low quality coal really that significantly less energy dense?
Also there's this article from Bloomberg back in march that maybe related to this problem.
So its been discussed before that power consumption got reduced because of the slow down from lockdowns, and this Reuter article doesn't provide numbers or details on China's coal inventories, other than coal import which accounts for 7% of total coal consumption. So how does it turn into a power supply risk even if the coal output is high? is low quality coal really that significantly less energy dense?
Also there's this article from Bloomberg back in march that maybe related to this problem.
China Orders Power Firms to Replenish Coal as Prices Remain High
That Reuters article is a jumbled up mess. It confuses a lot of things. There are several grades of coal. The higher grades have lower water content and high carbon content hence more energy per unit of weight. The highest grades are commonly dubbed as coking coal and are used to produce steel. They are too valuable to use for electric generation.
Electric generation uses the lower or mid grades. Preferably you would use the mid grades on electric power plants, since it causes less air pollution and less ash is sent into the air causing air quality issues, but several countries use the lowest grade coal, the dirtiest one, because they either lack the other varieties or they aren't cheap enough. Germany for example exclusively burns the dirtiest crappiest so called brown coal i.e. lignite. Of course the crappier the coal the more amount of it you will need to generate same amount of power. So it only makes economic sense to burn this low grade coal if the power plants are really close to the coal mine. Otherwise the transportation costs make this coal not cost effective.
It is a lie that Mongolian coal grade is lower quality than Australian coal. Mongolian export coal, Russian export coal, North Korean export coal, are highest quality coking coal aka anthracite. Used for steel production not electric generation. Indonesia exports a lot of mid grade coals for power generation. But they have had issues ramping up supply lately.
China has basically all types of coal in its own territory. But most of it is mid grade coals. So they used to import Australian coal for steel production. Then with the trade war with Australia they switched to Mongolian and Russian coal. Initially there were hiccups with supply but these are being smoothed out as transportation capacity in those countries to China is increasing. Russia built new port facilities and railways to transport coal in the Far East. Mongolia is building railways into China for transporting coal. One became operational just this last month. As for shortage of coal used for electric generation that problem was solved by increasing production in mines in China. The problem was never lack of imports from Australia but the government policy to reduce the amount of mines keeping only the most modern ones to increase worker safety. China used to have extremely high amount of coal miner deaths. Largest worldwide. Some colder winters than usual meant there was a coal squeeze and there were energy shortages. So the government decided to build new coal power plants and reopen some mines. In the long run, China will increase amount of nuclear power plants, and imports of natural gas from Russia, but right now the coal is necessary. And that article is just the lowest grade piece of crap I have seen.
Thanks for clearing it up, the article is indeed a confusing mess that I don't know why I bothered to even give a moment of thought. I read a domestic news article on China's coal situation last night that I can't seem to find again today, and the summary is that the situation is stable in the northeast while the south will be a lot tighter in the incoming months due to temperature changes and weather, but overall the situation is improving as the government is improving their measures on ensuring coal production and supply.
