Chinese Economics Thread

[ACuriousPLAFan]

Unbelievable stuff
Just in the state of Ceara:
Deal signed w/ Mingyang, SPIC, PowerChina, Envision, BOC & HW for renewables, green hydrogen & tech

So, huge cooperation bw China and Brazil in power sector, especially projects involved in energy transition. That's kind of what Saudis are getting from China also. Main diff being Saudis want solar->H2 and Brazilians want offshore wind->H2

If you don't appreciate the important of green H2, just see how many gov't are eager to sign H2 deals with China.

For many years ever since I saw Jeremy Clarkson introducing Toyota's H2-powered car on Top Gear back in the 2000s, I have always believed that Japan is the indisputable leader in the green H2 energy of the world, and would remain so for many years or even decades to come. Nobody could ever come close to beating Japan in hydrogen technology, as they are the real pioneer of the field.

Who knows China would suddenly rush into the room, roughly push Japan aside and claim the title of global leader in H2 technology in a whim. Truly unbelievable...

Kudos to China!

 

[tphuang]

For many years ever since I saw Jeremy Clarkson introducing Toyota's H2-powered car on Top Gear back in the 2000s, I have always believed that Japan is the indisputable leader in the green H2 energy of the world, and would remain so for many years or even decades to come. Nobody could ever come close to beating Japan in hydrogen technology, as they are the real pioneer of the field.

Who knows China would suddenly rush into the room, roughly push Japan aside and claim the title of global leader in H2 technology in a whim. Truly unbelievable...

Kudos to China!

The Japanese really bet on the wrong things. It focused on H2 powered cars rather than H2 industrial applications, which is where the demand actually is. Most of China's H2 demand are in places like ammonia (fertilizers), methanol, refinery feedstocks, steel plants and such.

You need like a solid base to make green H2 workable. If you don't have low cost renewable production, then green H2 is not competitive. That's why you see IRA and the Europeans are all looking to subsidize green H2 production, but China doesn't need to do that. Its green H2 is already reaching competitive levels to H2 from NG, because the cost of solar/wind have come down so much. H2 basically solves the renewable problem where all the production happens in areas far away from your big cities and power is generated inconsistently. You don't need to build costly high voltage grids. You don't need to buy ESS equipment. Once you solve the issue of transporting hydrogen, you can just produce electricity for practically nothing and then generate your ammonia and have it transported.

I just find it funny that the Europeans keep saying we need to remove our dependence on Russia & china. So they end up getting energy needs from global south countries (with large wind/solar potential) that get all their hydrogen production tools from China. lol, so now we have Saudi, Egypt, Morocco and Brazil all doing this. Lula is in Portugal now to discuss energy. Aside from hydrogen, what else could he be talking about? Brazil, is not a major oil or natural gas exporter.

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s well as documents for cooperation in energy, geology, and mining matters.

China is global south's solution for this energy transition

 

[Strangelove]

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China EV Maker BYD to Build $290 Million Battery Component Plant in Chile​

April 22, 2023

China EV maker BYD to build $290 million battery component plant in Chile.

China’s BYD Co Ltd

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, , the world’s largest electric vehicle (EV) maker, plans to build a $290 million lithium cathode factory in Chile’s northern Antofagasta region, said Chilean economic development agency CORFO.

The South American country’s government has named BYD Chile a qualified lithium producer, CORFO said, giving it access to preferential prices for lithium carbonate quotas.

BYD, which supplies electric buses for Chile’s public transportation system, did not immediately respond to requests for comment.
The plant will produce 50,000 tonnes per year of lithium iron phosphate (LFP) for cathodes, using lithium carbonate as an input. It is scheduled to start operating in 2025 and generate 500 jobs, CORFO said in a statement late on Wednesday in Chile.
Jose Miguel Benavente, CORFO Executive Vice President said:

We hope to give a strong boost to promote the generation of products in the lithium value chain.

On Thursday, President Gabriel Boric pledged to nationalise the lithium industry in Chile, the world’s second-largest producer of the metal essential in EV batteries, to boost its economy and protect its environment.




And on the subject, boss Wang Chuanfu (sitted looking at phone) was spotted riding the Shanghai subway going to the Shanghai Auto Show. Nothing fancy for this billionaire.

 

[In4ser]

The Japanese really bet on the wrong things. It focused on H2 powered cars rather than H2 industrial applications, which is where the demand actually is. Most of China's H2 demand are in places like ammonia (fertilizers), methanol, refinery feedstocks, steel plants and such.

Japanese were never been good at the big picture. They're great at simplification and proficiency but they tend to get tunnel vision on the things that really matter. They sided with Germany and Italy in WW2 which had barely any naval presence in Asia against the UK and the US and then missed the boat with the internet and digitalization too. The last time they caught on with revolutionary change was with industrialization and it was only because the West put a gun to their head with gunboat diplomacy.

 

[tphuang]

Japanese were never been good at the big picture. They're great at simplification and proficiency but they tend to get tunnel vision on the things that really matter. They sided with Germany and Italy in WW2 which had barely any naval presence in Asia against the UK and the US and then missed the boat with the internet and digitalization too. The last time they caught on with revolutionary change was with industrialization and it was only because the West put a gun to their head with gunboat diplomacy.

funny thing is that longer term, Japan will end up relying on China for its energy needs. Unless it's set on buying expensive and less capable GE turbines, China will end up dominating Japanese wind and solar market. Japan also has no electrolysis tech to speak off. If you consider China's close distance to Japan, it can choose between buying cheap Chinese green H2 production solution or buying green H2 from China directly, lol. Let's see what they do. After all, Japan is completely reliant on expensive LNG imports right now. and oil imports. China can cut off their energy supplies so easily.

If it wants to have "energy independence", it pretty much has to depend on China, lol. Interesting times.

Same with Korea, Taiwan, Philippines, Indonesia, Singapore, Vietnam. All these countries.

 

[luminary]

Rice production is

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to experience its largest shortfall in two decades.

According to a report by Fitch Solutions, prices are driving up prices for more than 3.5 billion people across the globe. China, the U.S. and the European Union are all experiencing a strained supply, with the ongoing war in Ukraine and poor weather in rice-producing economies, such as China and Pakistan, blamed.

Rice prices are expected to remain at current highs until 2024, said the report, with analysts warning of the impact on major importers. The global shortfall for 2022/2023 is forecast to come in at 8.7 million tonnes, with rice shortages potentially hurting the poorest households.

 

[tphuang]

Some really great charts that David Goldman posted today

March exports to Iran way up

https://twitter.com/i/web/status/1650462942972837891

Overall, exports to Central Asia, Russia, Turkey, Saudis. This is really something to look at. How can you be up 50% to so many Asian countries. They must be taking over manufacturing market for all these countries

updated cloud market share in China

https://twitter.com/i/web/status/1650475296800354311

also links to Caixin article about growth in cloud from the big telecom companies. Quite interesting they are seeing so much additional market share at the expense of tech companies.

Chinese ports are really efficient

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This might have been posted already, but just a point that $22B isn't really that much money. They can do better

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[paiemon]

China put too much money in the real estate is because the local governments depend on land sales for budget, a big part. They know the price will rise no matter what. So it is the fall of past governments. Also the urbanization of China and uneven developement of cities has led to some sky high price in large cities like Shenzhen, Shanghai, etc. The solution is to having a newer governance model for local government to generate budget as well as make development between tier-1, tier-2 cities less uneven.

I agree that the government is guilty for stoking the herd mentality, and is still trying to prop up prices for the sake of the economy (similar to many other countries around the world) thus still preserving the allure of real estate as an investment vehicle. Changing the government financing model to be less driven by land sales, land taxes, etc would certainly alter the incentives but I also think governments need to alter the mental calculus that real estate will always appreciate by tackling the economic factors at play such as supply in certain cities (esp. for rental housing) and through tax changes that increase the cost/reduce the return of putting capital to work in non-primary residence housing while making other savings routes more attractive.

 

[tphuang]

The ESS market in China continues to get more incredibly cheap in April after a banner month in price drops in March

https://twitter.com/i/web/status/1650537445878902794

EPC prices dropped 14.5% MoM in March
In April, prices sink to new lows as BYD seems to have found new gear in offering super low ESS price.
The implication is that the expansion of renewable energy has gotten a lot cheaper, since both the wind/solar systems as well as ESS have gotten so much cheaper.

 

[Overbom]

Building block for setting up a property tax is now ready

https://twitter.com/i/web/status/1650798183822544898