So how do Chinese forklift brands measure up on the global market? Can China take over the world market for forklifts?
Asking purely out of interest
Chinese Economics Thread
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Asking purely out of interest
So how do Chinese forklift brands measure up on the global market? Can China take over the world market for forklifts?
Asking purely out of interest
It's quite interesting to see what Chinese energy companies are doing. They are basically slowly building up their involvement in oil & gas market while Western companies are somewhat dialing down a little bit due to the 0-carbon goals. Given that hydrocarbon is still likely to play a role in the foreseeable future, this creates quite the dilemma.
More than anything, it solidifies my view that China will be getting oil significantly cheaper than other countries for a while. Not bad for a country that has basically plateaued in oil production.
First of all, China has effectively taken control of most oil fields in Iraq
The article here does a good job of explaining the economic benefits to China from having control and long term access to these oil fields. Normally, long term pricing are signed at more favorable rates vs spot market.
Secondly, China utilizing its leverage over Iran to get even more favorable terms in developing Iranian oil fields. It knows that the lifting cost of Iranian oil is really low. As such, it can get more favorable pricing while still allowing Iran to be profitable. Now that JCPOA has failed, Iran really has not alternative options.
I've been pretty hard on how China should interact with Iran, but if it can get this kind of favorable terms, then it should definitely dive into things.
The implication for global oil market is quite interesting
First, China is buying less from Angola, Venezuela & Nigeria. With these cheap long term oil contracts locked in and excessively cheap sanctioned country oil coming also, there is just less need to pay spot prices. Of the longer term contracts, I'd imagine Saudi & UAE pricing have to be the highest at this point. This also tells me they are not getting the same level of discount from Venezuela although their oil is harder to refine.
The end result is lower energy cost for domestic consumers and also massive amount of exports. For example, this is quite interesting.
BASF was the world leader in this but we know German energy cost is going way up and BASF opened a plant in China. Even aside from that, Sinopec has been getting a lot of cheap oil & gas & coal and continues to expand its production with this Hainan plant and the Tianjin plant under construction .
They've also signed deals recently with Aramco for new petrochemical refinery. Although, this is likely to consume more expensive Saudi oil
That means lower cost for domestic consumption of petrochemicals and for export market.
I've also talked about the greater diesel export they've been doing. It's unclear to me how much of this profit will be reinvested in their business, but there is no doubt good amount will be and the additional PnL here from capturing the refined to sanctioned crude spread will be good for the Chinese economy.
More than anything, it solidifies my view that China will be getting oil significantly cheaper than other countries for a while. Not bad for a country that has basically plateaued in oil production.
First of all, China has effectively taken control of most oil fields in Iraq
The article here does a good job of explaining the economic benefits to China from having control and long term access to these oil fields. Normally, long term pricing are signed at more favorable rates vs spot market.
Secondly, China utilizing its leverage over Iran to get even more favorable terms in developing Iranian oil fields. It knows that the lifting cost of Iranian oil is really low. As such, it can get more favorable pricing while still allowing Iran to be profitable. Now that JCPOA has failed, Iran really has not alternative options.
I've been pretty hard on how China should interact with Iran, but if it can get this kind of favorable terms, then it should definitely dive into things.
That last part is what I call a hard bargain. This is the even more unbelievable part. No wonder Xi invited Raisi to China. I would too if I'm getting this bargain from Iranians.
The implication for global oil market is quite interesting
First, China is buying less from Angola, Venezuela & Nigeria. With these cheap long term oil contracts locked in and excessively cheap sanctioned country oil coming also, there is just less need to pay spot prices. Of the longer term contracts, I'd imagine Saudi & UAE pricing have to be the highest at this point. This also tells me they are not getting the same level of discount from Venezuela although their oil is harder to refine.
The end result is lower energy cost for domestic consumers and also massive amount of exports. For example, this is quite interesting.
From 2021 numbers,
BASF was the world leader in this but we know German energy cost is going way up and BASF opened a plant in China. Even aside from that, Sinopec has been getting a lot of cheap oil & gas & coal and continues to expand its production with this Hainan plant and the Tianjin plant under construction .
They've also signed deals recently with Aramco for new petrochemical refinery. Although, this is likely to consume more expensive Saudi oil
That means lower cost for domestic consumption of petrochemicals and for export market.
I've also talked about the greater diesel export they've been doing. It's unclear to me how much of this profit will be reinvested in their business, but there is no doubt good amount will be and the additional PnL here from capturing the refined to sanctioned crude spread will be good for the Chinese economy.
As I made the comment earlier in the thread about Chinese companies being better at B2B sales - Chinese forklifts are actually good quality forklifts but they are sold to 3rd party distributors globally who then white label them with their own brands.So how do Chinese forklift brands measure up on the global market? Can China take over the world market for forklifts?
Asking purely out of interest
This is a consistent pattern you see across Chinese manufacturing. Midea, for example, has decided to use the Toshiba brand for its global high-end business because guess what, Toshiba is a better brand than Midea in the eyes of the global consumer. Additionally a lot of other American branded white goods are also made by Midea under the ODM model. Let me also add here that Midea makes way more money selling its products under brands it owns (including Toshiba) than it does doing contract manufacturing for say Whirlpool.
Before people start calling Midea traitorous (insert 'how dare you use a Japanese brand') - the goal of Midea is not to be right, but to make money. Midea does what it needs to do to move product and make money.
Similarly, you have a lot of domestic Chinese companies in other brands come out with these Western/Japanese sounding company names/product names:
Estun/Efort - 埃斯顿/艾弗特 - Domestic Chinese leaders in robotics
Mihoyo - 米哈游 - The company behind Genshin Impact (which by the way, does not sound Chinese at all)
Things are obviously evolving but this takes years if not decades. What people also need to get accustomed to the fact that this is the status quo today - and regardless of how you feel about it, yelling like that old grandpa from Simpsons doesn't change a thing in the real world.
What's the status of China's rail freight network? We hear so much about HSR but little about the slow freight lines. Does China have something like India's planned dedicated freight corridor?
I'm thinking, with the rise of electrification the best way of land transport in the future could become electric rail + short distance EV trucks, since long distance EV trucks are not really feasible
I'm thinking, with the rise of electrification the best way of land transport in the future could become electric rail + short distance EV trucks, since long distance EV trucks are not really feasible
First time I hear someone asking does China have an equivalent to India's XXX. Why does China need a dedicated freight corridor? A normal railway network run by competent people should be able to handle both freight and passenger traffic just fine.
2023-02-23 14:44:33Ecns.cn Editor : Zhao Li
(ECNS) -- Chinese state-owned enterprises invested over 1 trillion yuan ( about $150 billion) in research and development in 2022, said Zhang Yuzhuo, director of the State-owned Assets Supervision and Administration Commission of the State Council on Thursday.
Over the past 10 years, the SOE's investment fund in R&D has continuously increased, registering 6.2 trillion yuan, which is more than one-third of the national total, Zhang added.
A total of 764 national-level R&D platforms and 91 key national laboratories have been established.
"The SOEs have employed 1.045 million full-time R&D personnel, accounting for one-fifth of the country's total, and 231 academicians from the Chinese Academy of Sciences and the Chinese Academy of Engineering, accounting for one-seventh of China's total," he said.
The technology breakthrough cover manned spaceflight, lunar exploration and space probes, deep sea and deep earth exploration, satellite navigation, nuclear power, etc, he added.
Last year, China's State-owned enterprises achieved 39.6 trillion yuan in business turnover and 2.6 trillion yuan in profits.
The real question is, does China have an equivalent to India's additional roof payload carrying trains?
And the answer is:
They do!!!
I guess what they have done is that they have moved most passenger traffic to high speed railway. The excess capacity of the slow railway network can now be dedicated to freight transport.