Increasing internal demand in China for goods needs more thoughtful analysis
A shift to more internal demand for China might not benefit the US in ways we think it will. One such area is the impact of increased demand for resources and energy. And another is where the jobs are.
China Puts Up More Money to Build Solar Capacity
The government-owned China Development Bank has just made its third massive loan to one of the country’s solar energy makers, bringing its total commitment about $17 billion. The combined size of the loans is large enough to allow China to double the global manufacturing capability for solar wafers and cells. The latest recipient of the government’s largess is Yingli Green Energy Holding Co. Ltd. (NYSE:YGE), which today announced that had received an aggregate line of credit from the China Development Bank worth about $5.3 billion. In April, Suntech Power Holdings (NYSE:STP) and Trina Solar Ltd. (NYSE:TSL) received loans of $7.3 billion and $4.4 billion, respectively.
The NYT points to energy use, efficiency, and China (Rdan…the emphasis is on global warming but needn’t be):
Already, in the last three years, China has shut down more than a thousand older coal-fired power plants that used technology of the sort still common in the United States. China has also surpassed the rest of the world as the biggest investor in wind turbines and other clean energy technology. And it has dictated tough new energy standards for lighting and gas mileage for cars.
But even as Beijing imposes the world’s most rigorous national energy campaign, the effort is being overwhelmed by the billionfold demands of Chinese consumers.
…
Aspiring to a more Western standard of living, in many cases with the government’s encouragement, China’s population, 1.3 billion strong, is clamoring for more and bigger cars, for electricity-dependent home appliances and for more creature comforts like air-conditioned shopping malls.
…
Chinese cars get 40 percent better gas mileage on average than American cars because they tend to be much smaller and have weaker engines. And China is drafting regulations that would require cars within each size category to improve their mileage by 18 percent over the next five years. But China’s auto market soared 48 percent in 2009, surpassing the American market for the first time, and car sales are rising almost as rapidly again this year.
…
An older generation of low-wage migrant workers accepted hot dormitories and factories with barely a fan to keep them cool, one of many reasons Chinese emissions per person are still a third of American emissions per person. Besides higher pay, young Chinese are now demanding their own 100-square-foot studio apartments, with air-conditioning at home and in factories. Indeed, one of the demands by workers who went on strike in May at a Honda transmission factory in Foshan was that the air-conditioning thermostats be set lower. [Rdan…the mandate is 79 degrees F.]
well,
i expect a hundred ft apartment might get a bit hot. but if they ever learn how to build a decent house they won’t need air conditioning.
meanwhile it’s good that the chinese aren’t doing anything to control their CO2 emissions, because then we’d have no excuse not to control ours.
***i expect a hundred ft apartment might get a bit hot. but if they ever learn how to build a decent house they won’t need air conditioning. ***
That’s not very realistic. Much of thickly populated coastal China (and Japan) have a climate much like the US South. You can live there in Summer without air conditioning. But no sane person would want to. In fact the traditional Japanese house made of a few solid beams and a lot of light wood and paper was designed to be as cool as possible in Summer. But you can’t realistically build cities that way if for no other reason than that you will surely have occasional horrendous fires with tens of thousands of casualties.
So cities like Tokyo have lots of reinforced concrete apartment house style construction. And it does need air conditioning.
That doesn’t mean that buildings can’t be consturcted to minimize the amount of air conditioning required although, depending on the area, they also have to consider things like earthquake resistance.
***meanwhile it’s good that the chinese aren’t doing anything to control their CO2 emissions,***
What, exactly do you think the affect of shutting down a thousand coal fired power plants and massive investment in renewables is going to be on CO2? It appears to me that the Chinese are doing more than we are — although not I think from altrustic motives. In the long run — by say 2100, I’m guessing that the Chinese will emit three or four times as much CO2 as the US. Why wouldn’t they? There are four times as many of them as there are of us.
Codger
do i have to print happy faces so you can tell irony when you see it?
with four times as many of them as us, they better damn sure be more imaginative than we are about the good life. high powered cars racing from air conditioned houses to air conditioned offices is not going to work.
speaking of lack of imagination, this sane person not only lived in Florida without air conditioning, he worked outside in the summer. about ninety percent of “hot” is psychological. the people i worked for were not sane so we worked in the noonday sun, but even i can think of a way to have avoided that.
as for the houses themselves… well there you have that imagination thing again. my uncles seemed to have the knack for building upper middle class homes in florida that were cool enough without air conditioning. meanwhile the public library was kept cold enough that my eyes frosted over when i went inside, and even wearing a coat did not save me from the miseries.
not much point in having this conversation. people get married to what they know. the only thing that will decide the issue is survival of the fittest.
VT and Coberly,
What I take away from this story is the inteligence of their fed gov in financing not only new technology innovation, and new economic devlopment that will no doubt employ people but a technology that will make them less energy intensive while they develop the creature comforts of a middle class.
Obama could have chosen to fund green technology development and job growth but just decided to keep giving billions of dollars to banks with no strings and no hope for this money to be circulated through the real economy. Its not his fault as he’s been raised on the neoloiberal economic cool aid that everyone drinks. They’ve forgotten the important lessons of Keynes. Gov demand must replace that of private industry’s especially now that runaway consumer credit excess is gone. The democratic party has forgetton the role of gov ala FDR, its what being a democrat means. But there are no more demopcrats only republicans who don’t hate gay peoiple.
sgetz
i think you may have a key insight.
as for the chinese i don’t have much hope they can manage “creature comforts” without falling for the more, bigger, faster of American high mass consumption. but decomissionin those coal plants is a good sign.
Residential air conditioning is only 2.8% of U.S. energy consumption (including electrical system losses at 31.5% system efficiency), and the average occupied square feet is a LOT bigger than a Chinese apartment. A/C isn’t the U.S. energy monster, that’s the private automobile. A/C uses less energy than residential space heating (5%) or water heating (3.0%) or appliance use (9.4%). It takes on importance from an energy perspective because it drives electricity PEAK demand (not total energy consumption) in large parts of the country.
China is SUBSTANTIALLY increasing coal consumption, they are shutting down small plants and building bigger ones. China now has the second largest electricity system in the world (behind only the U.S. and about 3/4ths our size as of 3 years ago, so it will probably pass the U.S. by 2013-2015) and is rapidly catching up (They increased electricity production by 2X from 1980 to 1990, and by 5X from 1990 to 2007). They have (by far) the largest hydro generation fleet and the largest coal generation fleet in the world (little nuclear and gas, as yet) and are rapidly expanding both. They burn 40% of the coal consumed globally (more than 2.5 times as much as the U.S., with less than half our reserves). China has had a coherent (globally significant) energy policy for about the last 30 years.
benamery21…thanks for the info.
benamery
i think you are right. it’s the automobile stupid. it’s the stupid automobile. but i hate air conditioning.
and 3% is 3% of a big problem. Then we can take on space heating (my bill is a tenth of my neighbors) and “appliance use” if that is more than washing machines, it may be another place where cuts could be made without hurting a reasonable standard of living.
but for sure, it’s the cars stupid.
yeah, thanks.
shutting down the little monsters to build bigger monsters was not what i was wanting to believe.
That is what the article implied. Even as draconian as the change is happening to obtain energy sources, the highlite for me was the application of US and other standards for living the good life applied to 1.3 billion more people. For real, not some piece of fiction. And fiercely fought for as a ‘good’ part of life. This indicates to me how warped our own values are in this new environment. Of course, maybe cold fusion will save a piece of the the day.
i forgot about refrigerators. some huge differences in efficiency there from model to model.
but it’s still the cars stupid.
dan
all cold fusion would do would be to give the addict a new cheap unlimited source of cocaine.
Shutting down 30-year-old coal tech to instal today’s coal tech is an improvement. China’s pace of output growth and energy import make clear that energy consumption is going up. So we are talking about limiting the increase in use, and installing better fuel tech is a really important aspect of limiting increase.
Nice to see this being taken more or less on China’s terms, rather than the conventional US press view of trade competition. Looking at why China is doing what it’s doing with regard to energy immediatelly shows that dumping inefficient coal plants for more efficient ones and pursuing energy tech development make perfect sense. China has been growing mainly by adopting pre-existing tech and putting labor released by increased efficiency to work with that tech. They are benefitting from scientific and engineering efforts made outside of China, just as the development text says will happen. That cannot go on forever, if China wants to have any high-wage activity. Since two of the great challenges China faces are having enough energy to continue increasing per-capita income, and having an environment that will continue to support human life while growting rapidly, it makes perfect sense for China to develop energy technology. Long ago, China became a power in hydro-electric generation, for perfectly logical reasons, and exports the stuff like crazy. Water power made sense for China, so exporting hydro-power equipment made sense, too. This is just another round of the same sort of thing.
kharris
i understand your point. and hope for the best.
but high mass consumption is neither necessary nor good for the people. they could go a long way toward a high standard of living without building a car based culture. or generating more electricity so they can iron their clothes. or watch big screen tv. they could probably do without cell phones too. and pet rocks.
85% of clothes dryers sold in the U.S. are ELECTRIC, as are a majority of hot water heaters. 60M U.S. households with thermostats don’t have a programmable (2 month financial payback), 22% of U.S. households have 2 or more refrigerators, 20% of U.S. households own a pre-1993 refrigerator (2 efficiency standard revisions back). A majority of households using fuel oil or electricity for heat have natural gas in the neighborhood, many in the HOUSE.
Awesome thread yesterday on Chinese coal. Apparently due to the world recession(7% drop in coal consumption ex-China), they are likely to hit 50% of world coal consumption this year.
http://europe.theoildrum.com/node/6700
Besides increasing average coal plant efficiency, they are reducing simple boiler use in district heating.