By Todd Royal
Nothing will move the world negatively or positively more than China when it comes to energy. Though China’s economy is 12 percent smaller than previously believed according to the US based, Brookings Institution. Brooking’s research backed up longstanding suspicion that the government hasn’t been keeping accurate economic statistics that is then publicly reported data.
If data is misinterpreted at best or official lies are coming from China then party-backed companies will encroach further into China’s economy causing energy chaos that will be difficult to interpret. What likely occurs is China builds the cheapest and most abundant, scalable, efficient and flexible energy they have: COAL.
The biggest troubles ahead for China, world economies and energy are that China has mounting debt problems. Trillions of dollars in debt has run up for years to gain a debt-fueled prosperity of buildings, infrastructure and exports. With China’s historically slowing economy, the communist party, and President Xi are clamping down, and these economic problems will further Chinese use of cheaper coal, nuclear and natural gas as their main sources of energy moving forward. This massive scale of borrowing and debt is a looming reason China will increase global emissions: they need cheap energy and electricity to service debt and grow their economy.
Other additional woes for China that will directly or indirectly counter the China narrative of being the leader in solar and wind power along with electric vehicles (EV) are: “Wage growth has cooled, surveys show the Chinese manufacturing sector have begun shedding jobs, imports are down, hurting other major exporting economies,” but other issues are more troubling for energy and China’s future. China’s true energy nature is revealed in its “rapidly aging population and a falling birth rate,” which will not be allowed gracefully.
Since China enacted their one-child policy and terminated over 300 million Chinese pregnancies this has decimated their productivity, child replacement rate, and will be a leading reason why they will continue using the dirtiest, cheapest forms of energy.
The US has also devastated many parts of their economy – particularly, African-Americans – over using abortion as population and birth control measures. This has deep implications for how energy is extracted, imported, exported, used and the overall wellness for a nation lacking children. Nations that heavily abort their children like the US, Russia and China are usually more combative with neighboring countries and either invade them (think US in Iraq or Russia in Crimea) or take over entire regions (China in the South China Sea) in a quest for resources and workers for their unproductive economies.
Beijing has been globally combative since the Obama administration attempted diplomacy and an open-hand of friendship to China, but was rejected. What you have now is President’ Trump’s US-led trade war and the Europeans confronting China over destructive trade, military, technical and illegal intelligence surveillance coupled with corporate theft that benefits Chinese state-run firms. European diplomats are openly excoriating China’s unsavory advances in the South China Sea and its economic gains that seek to do away with liberal, economic openness and cooperation at Europe’s expense. The Europeans said about the Belt and Road Infrastructure Project Initiative:
“Europe’s Belt and Road sceptics charge that it is opaque, strategically aggressive and can impose crippling debts on recipient states – all allegations that China denies.”
The Europeans though are their own worse enemy with “Eurosceptic remainers,” before, after and during the Brexit debacle. China will exploit this geopolitical weakness to their advantage and their energy usage will become a dirtier commodity under Beijing’s leadership. China is currently building hundreds of new coal-fired power plants throughout their provinces and cities.
Literally, China cannot afford to lose one bit of economic and social productivity and their aging population is what is causing their economy to begin grinding to a halt. The same problems of an aging population over rampant abortion-use are happening in the US, Russia, the entire European Union (EU) and Japan. This isn’t a Chinese phenomenon. What then occurs are other nations reliant on Chinese imports, their economies also slow and renewable energy, transitioning to a carbon-free or low-carbon society and EVs all pause going into affect. The Chinese clean energy transition – even in the form of expansive use of natural gas – will fade in importance to debt and economy woes. China’s one-child policy that advanced their aging process decades ahead of time will take energy into a direction none of us can even quantify or imagine.
President Xi’s model for China also doesn’t bode well for efficient Chinese energy usage since Xi made himself dictator-for-life leading to oppression within China, and environmental degradation will continue under his rule. Even US policymakers who hate President Trump are now tired of China’s overbearing style on the world stage. A possible takeover of Taiwan, a global trade war and Chinese pride on full display that means more fossil fuels and higher emissions since militaries run on oil, natural gas, refined petroleum, aviation fuel and nuclear power – renewable energy in the form of wind turbines and solar panels – will always take a back seat when a country’s national security and foreign policy are on the line.
Add the takeover of the South China Sea and expanded influence in Asia and it is not surprising China has increased their use of coal to fuel militarized activities. With China’s debt position wracking nerves globally it is not a far off assumption to postulate the world will become dirtier through increased coal use over its “debt woes,” instead of using cleaner natural gas. Finding technological breakthroughs that are needed for renewable energy and energy battery storage systems to become scalable, reliable, affordable and flexible will not be at the forefront of Chinese forward-thinking. This system Xi ruminates over and contemplates has been tried before with disastrous results because it:
“Has a record of suboptimal performance that features despotic governance, long stagnation of economy, suffocation of science and technology, retardation of spiritual pursuits, irrational allocation of resources (oil, natural gas, coal, nuclear and renewable energy), great depreciation of human dignity and life, low and declining living standards for the masses, and mass death and destruction periodically and frequently.”
Is this the new normal for China or a return to Mao’s destructive big-red-time-machine? No one actually knows, but it doesn’t bode well for their overwhelming use of fossil fuels and higher emissions in Asia and globally.
Countries will always choose their own self-interest rightly understood over energy policies and outcomes that don’t produce abundant, reliable, affordable, scalable and flexible energy results.
*Todd Royal, M.P.P. is the Managing Partner for Energy development, Oil & Gas, and Renewables for Ascendance Strategies, a global threat assessment and political consulting firm that is based in Los Angeles, California