Chinese Economics Thread

[mister unknown]

https://twitter.com/i/web/status/2035838876275925437

I wrote about China and the need to move beyond LNG from insecure countries here. Not just Qatar, but Australia & countries like that.

Part of that will be met by pipeline gas from Russia & Central Asia.

Long term, the goal should be to connect Xinjiang to Iran.

Extending a gas pipeline to Iran would indeed be ideal. The China-Central Asia Gas Pipeline already extends from Xinjiang to Turkmenistan (via Kazakhstan & Uzbekistan), it should be within the realm of technical feasibility to take one step further to Iran as well.

However, if I recall correctly, one of the concerns with that option is that neither China nor Russia are particularly enthusiastic about giving Turkmenistan a large scale outlet to alternative gas markets. In theory, such an extension could potentially enable that option in the future.

The other more immediate roadblock is of course the current regional war, which remains in a very unpredictable phase right now.

 

[bsdnf]

NDRC announced temporary measures to regulate refined oil prices.

Since the domestic refined oil price adjustment on March 9, international crude oil prices have risen sharply due to the escalating conflict between the US, Israel, and Iran, with prices in the Middle East reaching record highs.

To mitigate the impact of the abnormal rise in international oil prices, alleviate the burden on downstream users, and ensure stable economic operation and social welfare, temporary control measures have been implemented on domestic refined oil prices while maintaining the existing price mechanism framework.

According to the current price mechanism, on March 23, the domestic gasoline and diesel prices (standard grades) should have increased by:
Gasoline: 2205 yuan per ton; after the control measures, the actual increase was 1160 yuan per ton.
Diesel: 2120 yuan per ton; after the control measures, the actual increase was 1115 yuan per ton.

 

[mister unknown]

NDRC announced temporary measures to regulate refined oil prices.

Since the domestic refined oil price adjustment on March 9, international crude oil prices have risen sharply due to the escalating conflict between the US, Israel, and Iran, with prices in the Middle East reaching record highs.

To mitigate the impact of the abnormal rise in international oil prices, alleviate the burden on downstream users, and ensure stable economic operation and social welfare, temporary control measures have been implemented on domestic refined oil prices while maintaining the existing price mechanism framework.

According to the current price mechanism, on March 23, the domestic gasoline and diesel prices (standard grades) should have increased by:
Gasoline: 2205 yuan per ton; after the control measures, the actual increase was 1160 yuan per ton.
Diesel: 2120 yuan per ton; after the control measures, the actual increase was 1115 yuan per ton.

I wonder whether the PRC's mid-term strategic & economic interests would've been better served by loosening gasoline price control measures, but continuing the full sales tax exemptions on NEVs (which were cut by half at the beginning of the year, as planned 3 years ago), so as to use this supply disruption as an opportunity to hasten the inevitable transition of the existing ICE vehicles to NEVs.

 

[bsdnf]

I wonder whether the PRC's mid-term strategic & economic interests would've been better served by loosening gasoline price control measures, but continuing the full sales tax exemptions on NEVs (which were cut by half at the beginning of the year, as planned 3 years ago), so as to use this supply disruption as an opportunity to hasten the inevitable transition of the existing ICE vehicles to NEVs.

Policies cannot be changed arbitrarily, NEV purchase tax adjustment was cancelled just three months after it was implemented is not their style.

And not everyone can afford a new car, excessive price increases for gasoline could affect their livelihoods.

 

[tphuang]

frankly, China is still not raising it fast enough to keep up with realities on the ground. NEV usage, whether for passenger or commercial vehicles, are harmed by this policy.

given for how long Chinese government has favored production side over demand side with the focus on increasing manufacturing and exports, it's kind of rich to say now that we need to keep gas prices artificially low and screw the EV makers

 

[mossen]

A pipeline to Iran makes sense but I could easily see it bombed in the future. Iran is likely going to be unstable due to wars/internal chaos/sanctions given the influence of the Zionist lobby over US foreign policy. Could also see various terrorist groups paid off to commit sabotage. LNG is problematic but once on the open seas, you don't have to worry too much by and large. The West won't seize Chinese tankers like they do with Russia because Russia has little economic leverage. China does.

Obviously imports from the Gulf region will have to decline. Russian piped gas sounds like a good deal, but Putin offered Power of Siberia 2 pipeline yet China declined. Presumably Xi didn't want to become overly dependent on Russia, which is a good fundamental principle. No single supplier should have a chokehold.

IMO, it makes more sense to just double down on renewables and nuclear energy instead. There is still tremendous amount of potential left for wind and solar. And China has the world's battery industry under its control anyway. Build-out can often be very rapid for renewables.

 

[Michael90]

frankly, China is still not raising it fast enough to keep up with realities on the ground. NEV usage, whether for passenger or commercial vehicles, are harmed by this policy.

given for how long Chinese government has favored production side over demand side with the focus on increasing manufacturing and exports, it's kind of rich to say now that we need to keep gas prices artificially low and screw the EV makers

Exactly what I said. I really don’t understand the Chinese government game plan in this sector . They spent decades and hundreds of billions of dollars to overtake the West and Japan/Koreas dominance on gas car industry . Yet now that Chinese companies are now finally ahead and dominant in this industry, they cut EV by half(too early by every account, they should learn from
norways example where 98% of car sales are now EVs due to strong government support and subsidies which is only now being reduced , since overwhelming majority of people who drive and EV never look again at a gas car ) and they still want to keep subsidizing gas prices to keep gas cars more competitive in China, but this will be helping western/Japanese companies more since they still dominate this sector more .
I really can’t think of one single reason for China to keep supporting the gas car industry . I understand perfectly E.U’s reason for backtracking on their 2035 deadline banning all gas cars in Europe, since their car makers are still not dominant enough in EVs and that will only benefit Chinese EVs and battery makers more . I’m sure that if Europe was in Chinas position and was dominating EV/battery sector (which was their thinking when they came out with all this laws) they would have probably sped up their target to get rid of gas cars even earlier to be honest and transition faster and get an even bigger head start over the word . Yet China seems to be moving slower despite their advantage .
anyway. Let’s see how EV sales will fare this year compared to last year.

 

[AndrewS]

A pipeline to Iran makes sense but I could easily see it bombed in the future. Iran is likely going to be unstable due to wars/internal chaos/sanctions given the influence of the Zionist lobby over US foreign policy. Could also see various terrorist groups paid off to commit sabotage. LNG is problematic but once on the open seas, you don't have to worry too much by and large. The West won't seize Chinese tankers like they do with Russia because Russia has little economic leverage. China does.

Obviously imports from the Gulf region will have to decline. Russian piped gas sounds like a good deal, but Putin offered Power of Siberia 2 pipeline yet China declined. Presumably Xi didn't want to become overly dependent on Russia, which is a good fundamental principle. No single supplier should have a chokehold.

IMO, it makes more sense to just double down on renewables and nuclear energy instead. There is still tremendous amount of potential left for wind and solar. And China has the world's battery industry under its control anyway. Build-out can often be very rapid for renewables.

Natural Gas is fundamentally expensive to store, so large reserve stockpiles aren't feasible, unlike what we see with crude oil reserves.

On Ammonia, China has already made a strategic choice to produce ammonia with domestic coal, which is somewhat more expensive than using natural gas in normal times. But these aren't normal times, so coal is likely the lowest cost and most secure option for Chinese ammonia production, whilst green ammonia production (using electricity) is further developed and made lower cost.

Then on plastics, coal is already competitive with natural gas, so again, better to double-down on more coal-based production plants.

---

So from a strategic perspective, I think it just makes more sense to slowly phase out existing natural gas usage.

 

[PopularScience]

Exactly what I said. I really don’t understand the Chinese government game plan in this sector . They spent decades and hundreds of billions of dollars to overtake the West and Japan/Koreas dominance on gas car industry . Yet now that Chinese companies are now finally ahead and dominant in this industry, they cut EV by half(too early by every account, they should learn from
norways example where 98% of car sales are now EVs due to strong government support and subsidies which is only now being reduced , since overwhelming majority of people who drive and EV never look again at a gas car ) and they still want to keep subsidizing gas prices to keep gas cars more competitive in China, but this will be helping western/Japanese companies more since they still dominate this sector more .
I really can’t think of one single reason for China to keep supporting the gas car industry . I understand perfectly E.U’s reason for backtracking on their 2035 deadline banning all gas cars in Europe, since their car makers are still not dominant enough in EVs and that will only benefit Chinese EVs and battery makers more . I’m sure that if Europe was in Chinas position and was dominating EV/battery sector (which was their thinking when they came out with all this laws) they would have probably sped up their target to get rid of gas cars even earlier to be honest and transition faster and get an even bigger head start over the word . Yet China seems to be moving slower despite their advantage .
anyway. Let’s see how EV sales will fare this year compared to last year.

Around 90% of existing cars run on petrol. Government have no choice but to put a ceiling price.

 

[sunnymaxi]

China’s construction machinery exports surge 33% in Jan-Feb, 2026.

Exports of construction machinery products reached $10.686 billion in the first two months, up 33.4 percent year-on-year, according to data released by the China Construction Machinery Association (CCMA), CCTV News reported. Even in February, despite the Chinese New Year holiday, exports still exceeded $5.1 billion, exceeding the 2025 monthly average by 5.016 percent, according to the association.

By product type, exports of construction machinery components, crawler excavators and off-road mining dump trucks saw significant growth. High-end and electric models have become new highlights in export growth.

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