Chinese Economics Thread

[supercat]

Foreign investment grew 8% last year in U.S. dollar terms. Investment from EU increased a whopping 92.2%, indicating that EU will not decouple from China anytime soon, as the U.S. wishes.

China's actual use of foreign capital hit more than 1.23 trillion yuan in 2022, up 6.3 percent year-on-year, the Ministry of Commerce said on Wednesday.

In US dollar terms, the amount was 189.13 billion, increasing 8 percent on a yearly basis.

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Foreign investment from South Korea, Germany and UK surged significantly with an increase of 64.2 percent, 52.9 percent and 40.7 percent respectively, while the investment from the EU, members under China-proposed Belt and Road Initiative and ASEAN increased by 92.2 percent, 17.2 percent and 8.2 percent respectively.

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China now has 78 of the world's 500 most valuable brands, second only to the U.S.

https://twitter.com/i/web/status/1615556588206440449

 

[chlosy]

Foreign investment grew 8% last year in U.S. dollar terms. Investment from EU increased a whopping 92.2%, indicating that EU will not decouple from China anytime soon, as the U.S. wishes.

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China now has 78 of the world's 500 most valuable brands, second only to the U.S.

https://twitter.com/i/web/status/1615556588206440449

Long way to go

 

[AndrewS]

How do I even start?? It is like saying "Godzilla is a mammal and thus is the fastest because cheetahs." It is not even wrong, it is just fundamentally nonfactual.

Chemical reactions are fundamentally an electron phenomenon. Electricity is also an electron phenomenon. There's nothing that fundamentally makes electronics more or less easy than chemical reactions. Trying to push any significant amount of electrons over ie the 7-8 eV bandgap of a ceramic insulator melts the ceramic long before it conducts even a picoamp. Meanwhile activation energy of some chemical reactions is 0 (they occur on contact) - see hydrazine and N2O4.

You're not looking at the big picture.

Yes, chemical reactions are fundamentally an electron phenomenon. But the reactions operate at a scale which essentially makes them a "mechanical" process.

You have the following energy losses at each stage of the Hydrogen process

1. Create the Hydrogen - 25%
2. Compress and Transport - 10%
3. Burning in fuel cell to produce electricity- 40%

By the end, you've only got 40% efficiency. And your choice of materials is limited because you need hydrogen to "burn" in order to create heat/electricity

---

Plus if you read, I'm not saying that batteries/electronics is fundamentally easier than a chemical reaction.

If you actually read, I'm actually saying that batteries and electronics are far more complex and there are orders of magnitude more possibilities available in terms of materials and design. In comparison, a chemical reaction is pretty straightforward which means you can't really do much to it.

So we can expect the rate of improvement in batteries/electronics to be easier in comparison to Hydrogen/Ammonia

Plus I don't understand why you are using the example of ceramics as the example to your argument.
If anything, it just highlights that materials such as ceramic insulators are available as an option in the design of batteries/electronics.

I can also see some research on using ceramics as the electrolyte for a solid-state Sodium battery. Again, this highlights the flexibility available in terms of material choices.

 

[FairAndUnbiased]

You're not looking at the big picture.

Yes, chemical reactions are fundamentally an electron phenomenon. But the reactions operate at a scale which essentially makes them a "mechanical" process.

You have the following energy losses at each stage of the Hydrogen process

1. Create the Hydrogen - 25%
2. Compress and Transport - 10%
3. Burning in fuel cell to produce electricity- 40%

By the end, you've only got 40% efficiency. And your choice of materials is limited because you need hydrogen to "burn" in order to create heat/electricity

---

Plus if you read, I'm not saying that batteries/electronics is fundamentally easier than a chemical reaction.

If you actually read, I'm actually saying that batteries and electronics are far more complex and there are orders of magnitude more possibilities available in terms of materials and design. In comparison, a chemical reaction is pretty straightforward which means you can't really do much to it.

So we can expect the rate of improvement in batteries/electronics to be easier in comparison to Hydrogen/Ammonia

Plus I don't understand why you are using the example of ceramics as the example to your argument.
If anything, it just highlights that materials such as ceramic insulators are available as an option in the design of batteries/electronics.

I can also see some research on using ceramics as the electrolyte for a solid-state Sodium battery. Again, this highlights the flexibility available in terms of material choices.

This is why @Patchwork_Chimera laughs at you. You talk like a subject matter expert and tried to explain something that you don't understand, without qualifying that it's just your understanding of the subject. Instead you tried to sound authoritative. And when corrected, you barely even know where you are wrong, and instead of admitting your knowledge is limited, you double down.

Electrons don't "rotate" in "orbits" at "2200 km a second". This was the funniest part to me. Like a little ball spinning around the nucleus.

OK, let's say that this is just a conceptual misunderstanding. What do you think happens with these electrons when a chemical reaction happens? And you think no chemistry happens inside a battery?

What do you mean "chemical reactions happen at a scale where it's essentially mechanical"? You mean there's no chemical reactions in confined spaces? Orly? Heterogeneous catalysis anyone? How about all of biochemistry?

Maybe by "mechanical" you mean "macroscopic energy scales". Yes combustion happens at a macroscopic energy scale. That's why we use it for grid energy and to move heavy vehicles like ships and cars lmao.

But why else? Because combustion fuels have high energy density. Why is that? Because the relevant energy scale (this is what you meant to say btw, not "mechanical") for an electrochemical reaction in battery is on the order of 100-200 kJ/mol.

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Combustion reactions for hydrocarbons are on the order of ~1000 kJ/mol for methane and it only goes up from there.

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This is why combustion is used. It has incredibly high molar energy.

I don't specifically say hydrogen is good either, where did I say hydrogen is good? I said your reasoning doesn't make sense, and it is absolutely true that it doesn't.

 

[abenomics12345]

This is why @Patchwork_Chimera laughs at you. You talk like a subject matter expert and tried to explain something that you don't understand, without qualifying that it's just your understanding of the subject. Instead you tried to sound authoritative. And when corrected, you barely even know where you are wrong, and instead of admitting your knowledge is limited, you double down.

Electrons don't "rotate" in "orbits" at "2200 km a second". This was the funniest part to me. Like a little ball spinning around the nucleus.

OK, let's say that this is just a conceptual misunderstanding. What do you think happens with these electrons when a chemical reaction happens? And you think no chemistry happens inside a battery?

What do you mean "chemical reactions happen at a scale where it's essentially mechanical"? You mean there's no chemical reactions in confined spaces? Orly? Heterogeneous catalysis anyone? How about all of biochemistry?

Maybe by "mechanical" you mean "macroscopic energy scales". Yes combustion happens at a macroscopic energy scale. That's why we use it for grid energy and to move heavy vehicles like ships and cars lmao.

But why else? Because combustion fuels have high energy density. Why is that? Because the relevant energy scale (this is what you meant to say btw, not "mechanical") for an electrochemical reaction in battery is on the order of 100-200 kJ/mol.

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Combustion reactions for hydrocarbons are on the order of ~1000 kJ/mol for methane and it only goes up from there.

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This is why combustion is used. It has incredibly high molar energy.

I don't specifically say hydrogen is good either, where did I say hydrogen is good? I said your reasoning doesn't make sense, and it is absolutely true that it doesn't.

You sound like you're involved in this in your day-to-day job - can you ELI5 for the rest of us who aren't SMEs on chemistry/physics? Specifically isolate where you think @AndrewS has gotten wrong, in layman's terms.

By the way, I pointed out a few key points where I think @AndrewS has gotten wrong ('lack of land in tier 1 cities', 'excess deposits misunderstood for savings') - have you re-assessed?

If the notion is that "Hydrogen is not going to work because its not efficient at 40%" - the comparison has to be made vs. ICE engines, and as @FairAndUnbiased illustrated, energy density is one of the key issues for hauling around a truckload of batteries. I'm just going to leave this well circulated (at least should be) chart from the EIA on energy density. You can see why gas/diesel is so difficult to replace and why you can't power cars on uncompressed natural gas turbines despite it burning more 'efficiently' as compared to diesel or gasoline.

 

[abenomics12345]

So even if all new car sales are electric, it still takes that time for all that EV electricity demand to fully appear.

Norwegian EV penetration is at 20% of the car parc - electricity demand has not increased nearly the degree you would expect it. Can you walk through the math on at what point will it impact electricity demand?

Assuming you're in Japan, I'm not surprised electric car investments haven't come up in conversation.

Lol - if you paid any attention to the Japanese automotive industry you would know they bet on hydrogen fuel cells and they bet wrong big time. By the way I'm not in Japan, I just created the account at a time when Abenomics was the biggest 'thing' in the markets.

So people will mostly pay to still have access to the grid for emergencies and the comfort of knowing that it is available. But in terms of actual electricity consumption, it would make sense to generate your own cheaper electricity which can be used immediately or fed into a vehicle.

Economically it makes *zero sense* to separate the fee of using electricity vs. the grid with which you access electricity. I've had this exact conversation with utility regulators and electric utility companies across the world. You might as well say in Mawsynram India (most rainfall in the world) they should collect rain water on their roof top and not build a water pipe, ("cuz rainwater is cheaper than building water pipes").

The grid is a public good - unless everyone goes off grid, it needs to exist, and the cost of maintaining that infrastructure is necessary and a sunk cost. Whatever generation capacity you can do at roof top scale, you can do it cheaper at utility scale. Economics 101 ser.

Plus if you look at China, it's predominantly apartment buildings. So rooftop solar can provide some or much of the electricity demand, but will still need a grid connection. The larger scale of installation also helps drive down the per-unit cost.

Lol, walk me through the electricity demand of a 25 story apartment block and the solar efficiency of that apartment block's roof top - if you tell me that "wind is not available where it is needed", you can't possibly suggest that "solar is going to be generated at a place where it is needed".

For the average house/apartment (even country?), they're probably going to need 4 hours of storage given the likely energy generation mix, which could easily be provided from a vehicle battery

And where are we going to find the place to park all those cars? If you understand the real estate 'stock' in China - majority of places don't even have parking lots.


I think if I were to summarize what I observe, you mistake/conflate "what is technically possible" with "what is economically feasible" on a regular basis.

 

[FairAndUnbiased]

You sound like you're involved in this in your day-to-day job - can you ELI5 for the rest of us who aren't SMEs on chemistry/physics? Specifically isolate where you think @AndrewS has gotten wrong, in layman's terms.

If the notion is that "Hydrogen is not going to work because its not efficient at 40%" - the comparison has to be made vs. ICE engines, and as @FairAndUnbiased illustrated, energy density is one of the key issues for hauling around a truckload of batteries. I'm just going to leave this well circulated (at least should be) chart from the EIA on energy density. You can see why gas/diesel is so difficult to replace and why you can't power cars on uncompressed natural gas turbines despite it burning more 'efficiently' as compared to diesel or gasoline.

View attachment 105476

I am not SME in batteries. But I know bad science when I see it because his mistakes aren't related to a particular form of science.

it's a whole bunch of fundamental factual misconceptions. From not understanding the quantum model of the atom, to not understanding electrochemistry is what batteries use and just another form of chemistry, to not understanding energy scales... like, where do I start to correct this???

Nothing says combustion is harder to manage than battery. Nothing says batteries have to improve quickly, in fact, they improve slowly.

Why does it seem, then, that batteries improve in leaps? Because they literally do - you switch to a new battery chemistry. You don't keep improving the same battery chemistry the way you can with a combustion engine.

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Are there infinite battery chemistries out there? No, there aren't. They're well constrained by electrochemistry, which occurs on a lower energy scale than combustion.

That doesn't mean I think EVs are a bad idea or that hydrogen is a good idea. It just means that we can't expect batteries alone to 100% replace the incredible power of combustion. But they can supplement them, and for the purposes of EVs, it is indeed a potential substitute.

Luckily, Chinese companies like BYD and Geely have a great upgrade potential because they not only have strong battery tech, they're able to integrate combustion engines at near the thermodynamic limit (43%, higher than most power plants!) to those batteries.

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This is why I believe EVs are a game changer and an entirely new paradigm: even hybrids have double the fuel efficiency of combustion cars, thermal electricity powered pure battery EVs have the same fuel efficiency as hybrids, and it only goes up the more renewables you have in the grid.

The other part about using batteries as a buffer between the engine and the wheel is for precision control and energy recovery: regaining energy from braking, using only as little energy as necessary, and needing less mechanical transmission components.

This is why I agree with @tphuang that the automotive industry upgrade into EVs, both pure and hybrid, will be a huge growth driver.

 

[abenomics12345]

I am not SME in batteries. But I know bad science when I see it because his mistakes aren't related to a particular form of science.

it's a whole bunch of fundamental factual misconceptions. From not understanding the quantum model of the atom, to not understanding electrochemistry is what batteries use and just another form of chemistry, to not understanding energy scales... like, where do I start to correct this???

Nothing says combustion is harder to manage than battery. Nothing says batteries have to improve quickly, in fact, they improve slowly.

Why does it seem, then, that batteries improve in leaps? Because they literally do - you switch to a new battery chemistry. You don't keep improving the same battery chemistry the way you can with a combustion engine.

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Are there infinite battery chemistries out there? No, there aren't. They're well constrained by electrochemistry, which occurs on a lower energy scale than combustion.

That doesn't mean I think EVs are a bad idea or that hydrogen is a good idea. It just means that we can't expect batteries alone to 100% replace the incredible power of combustion. But they can supplement them, and for the purposes of EVs, it is indeed a potential substitute.

Luckily, Chinese companies like BYD and Geely have a great upgrade potential because they not only have strong battery tech, they're able to integrate combustion engines at near the thermodynamic limit (43%, higher than most power plants!) to those batteries.

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This is why I believe EVs are a game changer and an entirely new paradigm: even hybrids have double the fuel efficiency of combustion cars, thermal electricity powered pure battery EVs have the same fuel efficiency as hybrids, and it only goes up the more renewables you have in the grid.

The other part about using batteries as a buffer between the engine and the wheel is for precision control and energy recovery: regaining energy from braking, using only as little energy as necessary, and needing less mechanical transmission components.

This is why I agree with @tphuang that the automotive industry upgrade into EVs, both pure and hybrid, will be a huge growth driver.

Certainly what we are seeing in China is the proliferation of PHEVs - and partly this is because of the charging infrastructure issue I pushed back against him on in my post above; additionally this is why I suspect the likes of Nio are pushing out BaaS changing stations because yunno, majority of Chinese people don't live in 'burbs with 2 garages and a cul de sac where they can charge their EVs overnight.

I agree on the notion that any expectation of a 100% BEV world is just....unrealistic. What intrigues me about hydrogen is that it solves the intermittency issue with storage (water pump storage, compressed air storage, battery storage aren't quite sufficient to make this work) at a large scale and enables energy trade (the way crude oil does) across the world.

Air Products is part of a big project in the Middle East as a big of a science project on Green Hydrogen - we'll see where it goes.

 

[FairAndUnbiased]

Certainly what we are seeing in China is the proliferation of PHEVs - and partly this is because of the charging infrastructure issue I pushed back against him on in my post above; additionally this is why I suspect the likes of Nio are pushing out BaaS changing stations because yunno, majority of Chinese people don't live in 'burbs with 2 garages and a cul de sac where they can charge their EVs overnight.

I agree on the notion that any expectation of a 100% BEV world is just....unrealistic. What intrigues me about hydrogen is that it solves the intermittency issue with storage (water pump storage, compressed air storage, battery storage aren't quite sufficient to make this work) at a large scale and enables energy trade (the way crude oil does) across the world.

Air Products is part of a big project in the Middle East as a big of a science project on Green Hydrogen - we'll see where it goes.

PHEV is indeed highly suited for the Chinese market. Those without parking spaces don't buy a car. Those who have a public parking or a non charging apartment garage space can plug it in when they can at a commercial charger a little and fuel up for the rest. Those who have a charging parking space can buy BEVs.

Replacing all pure combustion cars with PHEV and BEV while encouraging everyone else to use public transit or bike could reduce Chinese oil consumption by ~50%, putting it within reach of only using domestic + Russian oil. It could also displace Japanese and German legacy automakers in everything but the luxury combustion car market which is small compared to mass market cars, and do so not only in China, but in the entire Global South. This is creation of a new market that does not yet exist - the low cost PHEV car, addressing a major concern of Global South customers within their price range.

Hydrogen has its own problems with energy density despite high specific energy. But hydrogen to methanol, if done without fossil fuel, greatly improved that problem. Maybe hydrogen to ammonia for ships.

 

[tphuang]

There are two aspects to Hydrogen as a fuel source:
1) developing vehicles, ships and everything that utilizes Hydrogen
2) actually producing the hydrogen fuel itself.

At this point, all the money for 1) is actually going into BEVs and PHEVs. China has probably spend more RnD on hydrogen vehicles than anyone else. But in terms of infrastructure, costs, efficiency level and even car development itself, hydrogen is just way behind battery right now.


I mean this is pretty unflattering look at current hydrogen inefficiencies. All of this can improve though. I think with more money thrown at this, cost and efficiency will both improve. At this point, the auto market has already spoken, battery EVs (to a less extend PHEV) has won against hydrogen vehicles. BYD has EVs for everything now. So the future application of hydrogen is likely in transportation that requires more dense energy storage like shipping and such. We've seen some battery electric container ships but they can basically just go down Yangtze River and that's it. There is also a lot of industrial usage for hydrogen fuel that you can't do with battery power like mentioned here.

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The green hydrogen to be produced at Kuqa, for example, is earmarked for Sinopec’s nearby Tahe refinery, where it would substitute for the gray hydrogen (extracted from natural gas) currently being used there. Green hydrogen proponents say the fuel could be used in many other hard-to-decarbonize industries, such as steel.

But the problem can be found later on in that article. Sinopec doesn't expect to make money until 2025. so you need some kind of incentive system where companies are willing to loose money for a while before the technology matures and supply chain gets built up. For all the problems with Chinese gov't, setting long term goals is one thing they can do better than Western democracies.

2) Production of green hydrogen is another issue. As much as it gets talked about, the current hydrogen production in China is like 99% not green. And China already produces electrolyser cheaper and at a higher quantity than anyone else. Even with that, it's going to take years to produce enough to even produce enough hydrogen for their current hydrogen fuel usage level! And we know hydrogen fuel usage is only going higher in the future. I don't even want to think about how much resources will be needed to produce enough electrolysers to actually produce enough green hydrogen. That's why I'm excited about that sea water to hydrogen fuel report. Maybe that's one way for the world to produce enough hydrogen fuel.

btw, this is another area where the Europeans are crying foul about Chinese price.

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