Chinese Economics Thread

[Ultra]

China's low-carbon electricity on track to be greater than entire U.S. grid in 15 years

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April 22, 2015
Nothing is static. Things keep changing. A few years ago, it seemed like China wasn't doing anything but building more coal plants, only caring about the rate of economic growth. The country isn't a Garden of Eden yet, but since then, environmental issues have become the

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, and the

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that authorities can't burry their heads in the sand anymore.

This has led to a big push for renewable energy and cleaner sources of power, primarily to help clean the air and make the country less dependent on external sources of fossil fuels. Take a look at this:

Renewable Energy Policy Network/Screen capture

These show the 2013 number. Notice how China, which moved up from #5 to #2 in one year, went from a fairly modest amount of solar and more than doubled it,

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? In fact, China almost added as much solar capacity in 2013 as the U.S. had as a whole.

Just last year, China said it

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, triple what they had at the time.

© BNEF

The graph above shows U.S. and Chinese power grids today, and what they are expected to be in 2030. The blue bars are low-carbon sources, which include hydro and nuclear (there might be other problems with those, but at least they don't spew CO2 and air pollution the way fossil fuels do), and the red bars show new low-carbon sources expected to be built.
The striking thing is that China's low-carbon capacity (old and new) in 2030 is expected to be larger than the whole of the U.S. power grid. Let that sink in. In a few years, China is expected to have built enough low-carbon power sources to power the whole U.S., which raises the question: If China can do it, why isn't the U.S. doing it to have a 100% low-carbon grid (ideally a 100% renewable grid)?
Here's the global solar capacity:

Renewable Energy Policy Network/Screen capture

From just 3.7 gigawatts in 2004 to 138 GW in 2013, and a lot more than that today for sure. This is just another way to see the

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that

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.

Well, China has to do a lot more to protect its solar/renewable companies then. Renewable energy/technologies are still at its infancy, it still requires a lot of government funding, guidance and protection. The collapse of solar PV giant Suntech is probably one example that hurts China's renewable/solar business sector. If China wants to be the leader in renewable energy, it needs to offer better guidance, investment and collaboration with this sector as China's future depends on it.

 

[broadsword]

Suntech and Yingli were in over their heads. They over extended their borrowings in their expectations of a rosy future. But when the supply turned into a glut, only these two major Chinese companies got caught on the hook. That is how many Chinese companies went under. They need to have good governance themselves.

 

[Ultra]

Suntech and Yingli were in over their heads. They over extended their borrowings in their expectations of a rosy future. But when the supply turned into a glut, only these two major Chinese companies got caught on the hook. That is how many Chinese companies went under. They need to have good governance themselves.

Of course, but since renewable industry is critical to China's future, letting it fend for themselve may result in the collapse of the industry. This is similiar to the LCD industry where there is an industry term called the "crystal cycle" - over investment during the boom time which leads to the glut and going bust during the hard time. The crystal cycle has shake up the industry dramatically forcing a lot of big players to exit the markets over the years. I just read this book not long ago - "

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" is more than an eye opener for me - it shows why critical industries needs to be protected. I will show you an excerpt from the book:

"After the discovery of liquid crystals and the development of its science in
Europe, the liquid crystal display prototype was invented in America, and
with the synthesis of a stable liquid crystal compound in Britain and the
advent of the hydrogenated amorphous silicon integrated circuit active
matrix addressing system, America and Japan developed the super twisted
nematic liquid crystal display for digital watches and calculators in the early
1970s.
A black - and - white twisted nematic television was demonstrated in New
York in 1978 by Westinghouse ’ s Luo Fang - Chen who had developed the fi rst
feasible liquid crystal active matrix driving system , but a month before the
demo, in an all - too - familiar scenario, the Westinghouse liquid crystal group
had been disbanded and all research terminated. Western corporations with-
drawing and Eastern companies eagerly fi lling the void was effecting a para-
digm for the liquid crystal display industry, exemplifi ed by Luo himself
eventually returning to Taiwan to become the chief technology offi cer at AU
Optronics, and the once famous “ Westinghouse ” brand television devolving
into an operation run by, and supplied with panels from, Taiwan ’ s Chimei
Optoelectronics."

Perhaps the most compelling example of the paradigm at work is RCA. At
RCA, the brilliant and far - sighted researchers, although the originators of
and the driving force behind the new liquid crystal display, and in spite of
technical breakthrough after breakthrough, RCA ’ s upper management ter-
minated the program. Why would RCA give up on what appeared to others
to be so promising? Apart from the obscuration wrought by the legacy of
the shadow mask mentioned in Chapters 13 and 18 , there was another factor:
the temptation of a dramatic new technology beckoning.
While RCA was in the early stages of developing its liquid crystal dis-
plays, IBM was turning out its earth - shaking computer mainframes, and in
the process fast becoming the supremo of high technology. RCA in 1972 could
not resist having a go at the new computers game, and rashly jumped into
the capital - intensive mainframe computer business. To make matters worse,
heeding perhaps the business school call for diversifi cation, the son of RCA
Labs great founder David Sarnoff steered RCA into the car rental, food pro-
cessing, and chicken farming businesses. Unsurprisingly, in venturing away
from the now - vogue business school prescription of core competence, none
of Bobby Sarnoff ’ s ventures worked out, and RCA quickly faced suffocating
operating losses. A severe cost - down program was initiated, and, as happens
at many companies under severe cash fl ow stress, research and development
was among the fi rst to be cut. One of the victims was the pioneering liquid
crystal display program.
Under the stultifying budget constraints, RCA ’ s liquid crystal research
group soldiered on bravely, but in 1985 gave up the ghost and the whole depart-
ment was sold to General Electric. A big new employer should spark a revival, but
any hopes of the liquid crystal researchers were soon dashed. GE not only did
not continue with RCA ’ s LCD research, it sold the entire television division,
including the LCD group, to France ’ s Thomson. A few years later, Thomson
was to sell RCA ’ s television division, including rights to the RCA brand
name, to China ’ s TCL, soon to become the world ’ s largest television manufacturer.
RCA ’ s liquid crystal group has long since dissolved, and George Heilmeier ’ s
dream of an RCA brand wall - hanging television never came to pass.
Not only did RCA miss the liquid crystal display express that it launched
itself, many related inventions, such as the complementary metal oxide semi-
conductor (CMOS) thin - fi lm transistors (TFT) used in the active matrix
addressing system, the charge - coupled device (CCD) for digital video cameras,
the light - emitting diode (LED) later to be used in the LCD backlight unit, and
other commercial successes, such as the video recording tape and compact
discs, all were developed at RCA, and each invention went on to create huge
consumer electronics markets, from none of which did RCA gain much sales,
leaving the spoils as it were to companies in Japan, Korea, Taiwan, and China.
But RCA was not alone in its inertial malaise; the end of the twentieth
century also saw the iconic high - technology giant IBM, in spite of its com-
puter prowess, also leave the liquid crystal display industry. However, as
related in Chapter 18 , to try to capitalize on the rapidly developing notebook
computer market, IBM re - entered the fray, but in order to defray costs and
risks, moved all its LCD development and manufacturing to Japan, allying
with Toshiba to share costs and risks.
But with the worldwide dotcom recession as backdrop, Big Blue retreated
once again, and in a fateful decision, seeking royalty revenue, IBM in 2001
licensed its liquid crystal display technology to Taiwan ’ s AU Optronics. Less
than a year later, IBM quit LCD manufacturing altogether, selling its entire
display division, including the state - of - the - art 3rd generation mass produc-
tion facility at Yasu, to Taiwan ’ s Chimei Optoelectronics."


The history of Liquid Crystal Display is facinating to read and probably too long for me to paste here. Need to say, originally LCD was part of the DARPA research and was part of the critical industry that Pentagon wanted to foster and grow in America, but it fell through and it all went to the Japanese, and Japanese had a commanding lead (and the only player in town) for a while but the 90s' asset bubble bust forced a lot of japanese engineeer to go work for the Korean and Taiwanese conglomerate which is why LCD tech spread and became mainstream, and drove the price down so much which eventually forced majority of the Japanese business to exit the market (I think now there is only Japan Display.... Sharp is selling its business and even Sony is selling their stake in Japan Display).

 

[Jeff Head]

pla101prc has now been banned permanently.

He is taunting moderation here and threatening to post on multiple accounts...all of which are against SD rules.

 

[broadsword]

I have no problem with the respective provincial govts saving Suntech and Yingli. They are the biggest solar companies in China and the losses would have been a huge waste considering the market potential of solar in China which we are witnessing now and in the long future. Though there are other big solar firms, the market is big enough to accommodate the two big players. They qualify as too big to fail, especially for Yingli which is making the upstream materials and supplies much to the rest of the industry.

To me, not too big to fail is when they are not the biggest companies, like not being in the top five, and their loss would have resulted in only a small advantage for foreign firms.

 

[Equation]

I have no problem with the respective provincial govts saving Suntech and Yingli. They are the biggest solar companies in China and the losses would have been a huge waste considering the market potential of solar in China which we are witnessing now and in the long future. Though there are other big solar firms, the market is big enough to accommodate the two big players. They qualify as too big to fail, especially for Yingli which is making the upstream materials and supplies much to the rest of the industry.

To me, not too big to fail is when they are not the biggest companies, like not being in the top five, and their loss would have resulted in only a small advantage for foreign firms.

Does Solyndra counts as too big to fail solar panel company?

 

[broadsword]

Solyndra's technology had issues. Getting the reflected light onto the solar cells on a constant basis was thwarted by dirt and other contamination on the back panel. So it was not a game changer worth saving the company. Of course, Solyndra was not big.

 

[Equation]

Solyndra's technology had issues. Getting the reflected light onto the solar cells on a constant basis was thwarted by dirt and other contamination on the back panel. So it was not a game changer worth saving the company. Of course, Solyndra was not big.

But it did get a lot of government funding.

 

[broadsword]

There was the hope and the hype. Solar occasionally sees paradigm shift in technology. Solyndra got funding as a startup for their new fangled technology, but Solyndra never became a big employer or money spinner. I doubt even if it continued to get funding it would be able to stay solvent in the long run.

 

[Blackstone]

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From “Lord Ringtone” to a banker accused of authorizing $1.6 billion in illegal loans, China’s list of most-wanted fugitives offers an illustrated guide to the Communist Party’s breathtaking variety of official graft.

The online rogue’s

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of 100 top overseas corruption suspects was released by Chinese authorities to pressure the U.S. and other governments to help track down and return them. The list includes Li Xiangdong, who’s accused of taking bribes while running China Mobile Ltd.’s regional digital music and ringtone business in Sichuan and absconding to Canada.

There’s also Liu Changming, a former governor of the Bank of Communications’ Guangzhou branch, accused of approving illegal loans of more than 9.8 billion yuan ($1.6 billion) between 2005 and 2007, according to the Legal Evening News. Liu vanished in 2008 before traveling to either Singapore or the U.S., according to the government’s list.

The list spans China’s industries, from finance and property to oil and car manufacturing. There are former representatives of the state-controlled news media and one ex-history professor. The campaign to repatriate financial fugitives -- dubbed “Sky Net” -- is key to President Xi Jinping’s nationwide corruption crackdown, with some 40 people on the list released Wednesday thought to be in the U.S.

Zhu Lijia, a public affairs professor at the Chinese Academy of Governance in Beijing, said the list, which includes the names, photos and personal details of the suspects, may boost international cooperation. “It could also create sufficient psychological pressure on these suspects and an environment conducive to their surrender,” Zhu said.

‘Psychological Pressure’
Nine suspects on the list hail from the banking industry, with a former president of Bank of China Ltd’s Hainan provincial branch being the highest ranking. That official, Wang Liming, left for the U.S. in 1998, according to the list.

Almost one-quarter of people on the list are believed to have multiple identities, with two possessing at least five passports. Among those with two passports was Qiao Jianjun, a former director of China Grain Reserves Corp., who’s suspected of illegally transferring 300 million yuan to the U.S., the official China Daily

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last month.

In March, the U.S. Justice Department indicted Qiao and his ex-wife, accusing them of channeling stolen funds into the country and fraudulently obtaining U.S. visas.

Canada, with 26 former officials, was the second-most popular destination for fugitives on the list, which was released by the Ministry of Public Security and the Central Commission for Discipline Inspection, the Communist Party’s graft-busting agency. New Zealand was third, with as many as 20.

Police Chief
Twenty-three people on the list were women. The youngest person was a 31-year-old woman who had worked at a Beijing-based pension fund.

The oldest was a former police chief of Fuzhou, the capital of the southeastern Fujian province. Xu Congrong, now 81, fled to the U.S. in 2003 after collaborating with local organized crime figures on money laundering and drug-trafficking, according to the party-run People’s Daily.

Among the better-known cases cited was that of Yang Xiuzhu, a former Zhejiang province property official, who fled to the U.S. in 2003 with estimated assets of 253 million yuan, the official Xinhua News Agency reported. Her family bought a five-story Manhattan building as early as 1996 for $5 million, the report said.