RISE OF CHINA
SOME RECENT DEVELOPMENTS…
The demise of the China economic miracle has been predicted for many years..:>) We’re not economists by trade, but we have worked in China (as consultants in industries ranging from luxury consumer goods to high tech) and we’re bullish on China.
You may be studying Chinese for purely academic reasons. Or perhaps you’re anticipating working in a field that may take you to Asia – we’ve met lots of recent college grads doing their first gig in China in fields ranging from medicine to energy to digital marketing (that’s what we do in our spare time).
Either way, we think China is rapidly expanding its footprint as a cultural, political and economic superpower.
Here are a few tidbits that we hope will catch your attention!
MOVE OVER, AMTRAK!
When we first arrived in China in 2007, the China High Speed Railway (CHR) had barely debuted with a short hop from from Beijing to Tianjin. But we tried it out and, even though our ride never went over 200 kph, we were impressed!
The first railway station in Tianjin was nothing special, but the train itself was sleek, clean and the service impeccable and punctual.
And while the US debates what to do with an aging transportation infrastructure, China marches on at an extremely rapid pace – take a look at the chart below – by 2025, the CHR system will have more than 38,000 km of track.
CHR HISTORY BY THE NUMBERS
|2007||1ST CHR LINE - BEIJING TO TIANJIN - 240 kph|
|2008||1ST COMMERCIAL MAG LEV LINE - SHANGHAI|
|2016||EXTENDED SYSTEM - 20 PROVINCES - 22,000 km|
|2025||PLANNED SYSTEM - ALL PROVINCES - 38,000 km|
THE NEW SILK ROAD
With the withdrawal of the US from the Trans-Pacific Partnership (TPP), the door has opened China to project soft power across Asia to Europe.
The “One Belt – One Road” initiative is the largest trade infrastructure project in the history of the world…when it is finally completed in 2040 (you read that right), it will provide an integrated network of gas & oil pipelines, railways and maritime routes and ports that span all the way from Southeast Asia and thru China, Pakistan and Iran to Russia and various European countries.
The initial investment in this project is a staggering $1 trillion USD, but by the time the project is complete,, China will have invested over $5 trillion USD.
As an advocate of globalization, Xi Jin Ping is hoping that this will provide China and its trading partners with a unified system that encourages greater trade between all of the participants.
Notwithstanding its reputation for pollution so thick you can’t see across a 6 lane highway in Beijing, China has made a remarkable commitment to reversing its stance on the environment.
This not only makes sense from a quality-of-life perspective, it also is a huge contributor to China’s economic stability (and growth).
In 2016, China produced more renewable energy (wind, solar and hydro) than the next 5 countries combined.
The government is making a huge financial commitment to renewable energy – estimates are that China will spend more than $350 billion USD in renewable initiatives by 2020.
And the government has turned the electric vehicle (EV) sector on its head with a mandate that by 2020 12% of all new vehicle sales must be EV. Intentionally or not, China has made EV’s economically feasible – virtually every major auto manufacturer now has no choice but to step up or be left out of the world’s largest auto market (28 million cars were sold in mainland China in 2017.
ENVIROMENTAL PROGRESS BY THE NUMBERS
|RANK IN WIND / SOLAR CAPACITY||#1 (2016)|
|NEW INVESTMENT IN RENEWABLE ENERGY||$360B (2020)|
|NEW JOBS IN RENEWABLE SECTOR||13M (2020)|
|SHARE OF WORLDWIDE EV / HV SALES||40% (2016)|
|EV TARGET (% of TOTAL FLEET)||12% (2020)|