Transcript Andrew Leung

Andrew Leung International Consultants Ltd
A Sustainable China in a Turbulent World:
Survival, Adaptation and Transformation
Andrew K P Leung, SBS, FRSA
A presentation for the TOChina Program
University of Turin, Italy
Wednesday, 5 May, 2010
1
Stage is set in 21st Century
• The World is Flat, Thomas Friedman, 2005 – Walmart Just-In-Time; UPS
2% world GDP across the globe; internet sans frontiers (Facebook,
Twitter,LinkedIn etc)
• Global value chain migration (Rolls Royce 60% research and 70%
components); creative destruction and world competition (‘Bear outside
your tent’)
• Communist Manifesto, Karl Marx,‘expanding markets …over the entire
surface of the globe ,,,,, new wants …products of distant lands and
climes …universal interdependence of nations’
• Power shifts into individuals - ‘Cosmocrats’ – A Future Perfect – The
Challenge and Hidden Opportunities of Globalization, John Micklethwait
& Adrian Woodridge, 2000
• Three Billion New Capitalists, Clyde Prestowitz, 2005
• Future profits lie in scale, knowledge, creativity, technology and brands
- $1 profit DVD player; 1.65% value of iPod, Google becoming world’s
most profitable
• China launched ‘Going Global’ strategy 2001
• Globalization and Its Discontents, 2002 + Making Globalization Work,
2006, Joseph Stiglitz; The Theory of Moral Sentiments, Adam Smith
2
• Global Financial and Economic Crisis and Rising Protectionism
The swing of the global pendulum
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National Intelligence Council Report Project
2025:
– US leadership capacity weakening (EU
fractious) v rise of BRIC + ME
– New developing countries alliances e.g.
ASEAN + 3, SCO – pose challenge to oldstyled UN, IMF, WB
– Global industrialization - geopolitics and
geo-economics of energy, food, water and
climate security
– Struggle for development in failing states =
Arc of Instability
– China’s dramatic growth – Beijing
Consensus – set to play a key role in new
world order
Emerging Markets lead contributers to
world growth – China 27% v US 21%: DCs15%
v US/EU@23% world GDP)
Emerging Markets lead contributers to world
growth – China 27% v US 21% to growth: DCs
15% v US/EU@23% world GDP)
3
Some New Power Brokers
Foreign assets ($T) MGI, July 2009
Pension Funds
Mutual Funds
Insurance assets
Oil Producers
Asian SWFs
Hedge Funds
Private Equity
2007
30.4
26.2
18.9
5.1
4.35
1.9
0.906
2008
25
18.8
16.2
*5
*4.76 (!)
1.4
0.938
2013(est)
8.9 – 13.2
7.5 – 8.5
1.5 – 2.4
1 – 1.2
Net capital outflow from surplus
countries ($b, 2006) (Mckinsey & Co)
Oil producers
East Asia
West Europe
Rest of World
1995
2006
35
133
110
4
____
282
484
446
308
81
___
1319
(!) Increase virtually all due to China
* Total $4.5b @day
4
East Asia dynamics re-defined
(When China Rules the World, Martin Jacques, 2009)
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Complex supply chain centred on China
•
ASEAN + 3; ACFTA (largest FTA with 2b people); 2003 Treaty of Amity
& Cooperation; Chiang Mai Initiative (currency swaps);‘East Asia FTA’ +
‘Asian Monetary Fund’; ASEAN + 6 ; Process-oriented Constructivism
(Socialization of Power – Influence without Authority) Qin Yaqing + Wei
Ling, in China’s Ascent, Cornell University Press, 2008)
•
China now South Korea’s largest trading partner + Singapore + Philippines
+ Thailand all closer to China (all formal US allies)
•
Intra-NE Asia trade (China, Japan, Taiwan + 2 Koreas) 52% total 5,
ASEAN imports + 30-40% p.a.
•
4 x US aid to Philippines; 2 x Indonesia; far > US to Laos, Cambodia,
Myanmar (Chinese navy access to Indian Ocean)
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Increasing Mandarin learning + Chinese tourists
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Australia double benefit – rising resource export and cheap imports
•
Taiwan more accommodating
•
Japan - Manufacturing; trade > US, influence < Japanese nationalism
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US influence declining except for naval power
•
East Asia Economic Union? Asian Dollar? RMB regional currency? A
future Asian Commonweath?
5
Africa becoming more China-centric
(When China Rules the World, Martin Jacques, 2009)
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FOCAC 2006 Beijing (48 countries; 2007-9 Action Plan: $5b
Development Fund, $5b preferential loans + credits: schools, hospitals,
professional training etc )
China’s % share of Africa’s export of selected commodities
Crude Oil Metals
Wood
Cotton
Angola
100
Sudan
98.8
Nigeria
88.9
Congo
85.9
Gabon
54.8
42.3
DRC
99.6
Ghanna
59.8
SA
46.5
Cameroon
39.7
Tanzania
24.3
53.8
rd
Africa’s 3 trading partner (US, France) > UK; soon 1st
Africa > 30% of China’s total oil imports
Angola > Saudi Arabia as China’s largest oil supplier (15%)
More direct flights Africa/China > few Africa/US
Chinese Diaspora = 500,000 growing
Future 100m tourists (Abah Ofon, The New Sinosphere, 2006)
> IMF/WB – undermining v pathway to development
Beijing Consensus > Washington Consensus
Overarching e.g. Zimbabwe (railways, power supply, Air Zimbabwe,
ZBC); Zambia (‘a district’– Opposition candidate); 5 SEZs
More Winner > Losers v narrow economic development
2007 PEW Global Attitudes 10 Africa countries – China> US
6
Threshold of China’s Renaissance
(When China Rules the World, Martin Jacques, 2009)
Ranking of economies (Goldman Sachs, 2007)
2025
1. US (~$20T)
2. China (~$18T))
3. Japan (~$5T)
4. India
5. Germany
6. Russia
7. UK
8. France
9. Brazil
10. Italy
11. Mexico
12. Korea
13. Canada
14. Indonesia
15. Turkey
16. Iran
17. Vietnam
18. Nigeria
19. Philippines
20. Pakistan
21. Egypt
22. Bangladesh
2050
China (~$70T)
US (~$38T)
India (~$38T)
Brazil
Mexico
Russia
Indonesia
Japan
UK
Germany
Nigeria
France
Korea
Turkey
Vietnam
Canada
Philippines
Italy
Iran
Egypt
Pakistan
Bangladesh
• Already EU’s and Japan’s largest trading partner;
leading in SE Asia and Africa; Latin America’s 2nd
largest trading partner by 2010
• People’s satisfaction - China 72%, UK 44%, US
39%, France 28%, Germany 25% etc
• > 40 m Chinese Disapora
7
•‘All roads lead to China ?’ - Pax Sinica?
Grand Design v Deng’s caution
•
Grand Design nationalism,中国不高兴 (Unhappy China) 2009
•
Global Realities, Risks and Constraints –
Internal –
• Inequalities, 5 Imbalances, Corruption, Rule of (> by) Law,
Governance, Checks and Balance, Environment, Ethnic
Harmony, Aging (4-2-1)
• Population Burden – now @ GDP < 100 countries, 2025/50
@ GDP => Turkey; 2050 5.4% (86.4m) of projected 1.6 b
population still in farming
External –
• Global military reach, energy and resources, technological
gap, creativity and innovation, financial expertise, ideas and
values, global institutions, conflict with Western norms
• Dangers and Opportunities of Power Transition:
Institutionalized International Order > Security Dilemma China’s Ascent – Power, Security, and the future of
International Politics, Robert S. Ross & Zhu Feng (Editors,
Cornell University Press, 2008); China’s Rise – Challenges
and Opportunities, Bergsten, Freeman, Lardy, and Mitchell,
Petersen Institute and CSIS, Washington DC, 2008
•
Deng’s 28-word caution : 冷静观察，稳住阵脚，沉着应付，韬光养
晦，决不当头, 有所作为 (in line with conclusions of 大国崛起 Study
Project + ‘Neoliberal Defensive Realism’, Tang Shiping, in China’s
Ascent, Cornell University Press, 2008)
8
How Open is China’s Economy?
• Open economy- Closed society? ‘No Pepsi in Danone’, CocaCola v
Huiyuan (Anti-Trust?), Diageo v Shui Jing Fang 水井坊
• Trade = 75% GDP (v US < 40%, Japan, India, Brazil 25 – 35%)
• China’s foreign trade growing faster than GDP over past 25 yrs
• FDI $90b, first amongst developing countries, 3 rd largest in world
• Massive IPOs - BoC ($9.7b), ICBC ($21.9b), Alibaba ($1.5 b, largest
Internet IPO v Google; Sinopec ($7.3b 100% Swiss Addax Petroleum
2009 ; China XD Electric ($1.5b largest 2010); global IPO $5.6 b Jan
2010 (only $72 m, 2009) - $4.5 b or 79% by China.
• Private sector 70% economy (Hu Angang)
• Growing consumption: Retail $800 b (2006) < only US, Japan, > rest
of Asia. 30% global retail growth 2003-8, ~$1.3 T by 2012; World’s
largest car market (13.5 m v 10.9 m in US), 48.7m v 250 m cars in
US. 2009 best selling BYD Multi-hybrid. Most buyers households <
mileage (Why gasoline consumption doesn’t gel!)
• FDI policies -SEZs, tech parks distort market (China Daily 27.2.08 )
• State’s ‘Visible Hand’: RMB, exchange control, SOEs (+ Big Four
Banks 34.5% total lending); macro-adjustment policies. Total loans fell
22% to RMB7.5 T v +95% 2009, moderating M2 expansion to 17%
2010 v 28% 2009. Budget deficit to be 2.9% GDP 2010, v 2.4% last
year. Target GDP 8% 2010 v 8.7% 2009
• TFP (inc Tech +Efficiency) +4% p.a. v1990 fastest in world history
(UBS report 2009)
• Unstable, Unbalanced, Uncoordinated, and Unsustainable – 17TH
Party Congress, Premier Wen, 15.03.07. (5 Imbalances: Regional,
Environmental, Social, Central-Local, Outward )
Adam Smith – Too little or Too much?
•
(Mckinsey Quarterly, 2006) except*
% China GDP & Lending
SOE Private
% GDP 23
Lending 35
52
27
Equity % GDP
US
China
Bank deposits Equity
US
China
19
72
34
15
Corporate Debt % GDP
139
17
*Public Debt % GDP
US
China
% Financial stock
US
China
145
1
*Household Debt %
60 (105% by 2012)
18
US
China
140
14
The Triffin Dilemma
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Article by Zhou Xiaochuan, Governor, PBOC
•
1960s USD glut (Marshall Plan + exuberant US economy)
led to abandoning the Gold Standard
•
Triffin Dilemma – Conflict of Goals or Interest between
national v global monetary requirements
•
Reinforced SDRs to be managed by IMF; supported by a
pool of currencies; SDR-denominated securities and assets;
SDRs as medium of international trade
•
Unlikely to materialize anytime soon but apparent support
from
o Benn Steil, Director of International Economics, US
Council of Foreign Relations
o Joseph Stiglitz, Nobel Prize laureate and head of UN
Panel
o Jeffrey Sachs, Professor of Columbia University and
Special Advisor to UN Seccretary-General
o Dominique Strauss-Kahn, Managing Director, IMF
o Brazilian President
o Russian Presidential aide
•
Subject to Voting Rights adjustment, China willing to
assume more proactive IMF role (a) to help regulate global
finances (b) to address the Triffin Dilemma (c) to help
protect China’s USD Savings (d) to build up the RMB as an
international currency for eventual convertibility
11
Getting out of the US Dollar Trap
• The USD Trap (Paul Krugman, Nobel Prize laureate)
• Zhou Xiaochuan, Governor, PBOC hinted at unofficial
USD peg being ‘temporary’ (FT 6.03.2010)
• Three Ways out of the USD (Nomura, 5 March 2010)
(1) Incremental Diversification out of US
Treasuries (Dec 2009 foreign-held UST dropped $53b of
which $34.2 due to China)
(2) Reducing current account surplus (gradual
RMB appreciation, more imports, more consumption,
outward FDI (inc SWF) especially in resources e.g.
 Aluminum Corp of China (Chinalco) $19.5 b in
Rio Tinto
 $25 b loan for 15 m tons crude for 20 yrs with
Russia’s Rosneft and Transneft
 $10 b loan for oil deal with Kazakhstan
 $10 b Sinopec deal with Petrobras (20.5.2009)
(3) Eventual RMB internationalization as a global
reserve currency e.g.
 Currency swaps (> $120 b)
 Promoting RMB as settlement currency (HK + Asian
countries)
 Issuing RMB bonds (initially in HK)
12
MegaTrend 1 – Massive Urbanization
McKinsey Global Institute (Preparing for China’s
Urban Billion, March 2008) :
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1 b urbanites by 2025, + 350 m in 221 cities
each > 1 m population (EU=35)
15 super-cities each > 25 m population
11 hub-and-spoke conurbations each > 60 m
population
Westward Ho! Most new urbanization to
spawn in currently-less-developed central,
north-east and western provinces
Concentrated mode of urbanization projected
to save 35% of carbon footprint and 2.5%
GDP in government expenditure
A YouTube snapshot
http://www.youtube.com/watch?v=cBqsSrPhyz4
Global implications: resources, business
opportunities, experimentation, civil society
13
MegaTrend 2 – Rapid Mobility
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Extensive inter-provincial highway
network 2nd only to US Interstate in 17
years
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Railway (6% of world’ total length, 25%
total traffic) to increase from 78,000 km to
100,000 km by 2020 (world’s largest
railway expansion since 19th century)
•
More city conurbations to be linked by
integrated transport infrastructure e.g.
$ 1.64b sea-spanning bridge over
Hangzhou Bay linking Shanghai to
Ningbo and other cities in the Provinces of
Zhejiang and Jiangsu with a combined
population of 72.4 million
•
Global implications: rapidly developing
Chinese middle-class, changing lifestyles,
vast supply chains
14
MegaTrend 3 – Rise of the middle-class
•
Combined urban disposable income of @annual
household income > RMB 100,001 to 200,000 to grow
from 0.1% of total 2005 to 36.4% by 2025 (Serving the
New Chinese Consumer, The McKinsey Quarterly, 2006
Special Edition).
•
Largely come from 100 m ‘single-child’ generation, inc
post-80s, post-90s, and 21st century new-comers
•
Luxury goods sales already 12% by value of world’s
total, to grow to 33% by 2015
•
Car ownership to expand from 11/1,000 towards world
average 120/1,000 (<US 500/1,000) 500 m cars by 2050
(Goldman Sachs)
•
Young entrepreneurs to jump from current 300,000
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Average 50,000 USD millionaires to be added annually
•
A more consumer-oriented economy emerging in
coming decades
•
Global implications: reducing over-reliance on exports,
mitigating economic imbalance with the US.
15
MegaTrend 4 – Largest moderate-income economy
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China > US by 2027/28 and > by 75% by 2050
(when India = US) (Goldman Sachs, The
Economist, 30.6.2007)
•
China’s @GDP ranks < 100 in the world =
some poorest countries in Africa. By 2050,
@GDP = middle-income nation in Asia or
Eastern Europe
•
Aging population profile ( > 30% to be aged 60
or over by 2050) Subsidized voluntary basic
pension plan for rural population to grow from
60% in 2010 to 80% by 2015
•
Legacy of One-Child Policy, 4-2-1 phenomenon,
relaxed if both parents single children, likely to
be relaxed further
•
Still > 100 m with < $1 a day v 800 m such in
1978. Poverty to shrink significantly in coming
decades
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Global implications: China will get old before
getting rich. Needs a benign internal and external
environment to consolidate an economic
foundation to face social and financial burden of
a looming aged profile
16
MegaTrend 5 – Quiet Green Revolution
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Green Great Wall 4,480 km forestation absorbing 8% or
500m tons emissions p.a.- 20% or 1 b tons absorption by 2010.
Small coal-power plants of < 10m kW capacity closed by
2007. Most of < 50m kW likely to be cleared or expanded
within a decade.
To invest $2.3 trillion in energy development 2001-30, inc
$200b to increase renewable energies from 8.3% to 10% of
primary energy by 2010 and 15% by 2020, + 7% to 10% p.a.
by 2010 and 20% p.a. by 2020, inc hydro-electric, nuclear,
coal-seam gas, biomass, wind, solar, terrestrial heat and wave
energies (IEA)
Hydro-electric power world’s first in installed capacity 145
m kW and 482.9 billion kWh power generation
Total of 110 million square meters of solar panels by far the
world’s largest
Wind power has increased 7 x to > 6 m kW, 5th largest
2 nuclear power stations p.a. for the next 15 years.
BYD, (Shenzhen) introduced 15.12.2008 world’s first massproduced plug-in hybrid electric vehicle @US$22,000,
range 100 km on electric engine. Miles XS500, range 120
miles at 80 mph, to launch in Tianjin in 2009 (Iain Carson and
Vijay V Vaitheeswaran, Zoom: The Global Race to Fuel the
Car of the Future, Hachette Book Group, 2007)
Dongtan eco-city concept of sustainable housing and urban
design on the cards for new cities, towns and villages. Ecofriendly lifestyle catching on with rising middle-class.
Methane gas from human and animal waste in villages
Law on the Circular Economy effective 1.1.2009 mandating
energy, water, and material recycling, conservation and
emission reduction supported by tax breaks and fines.
Global implications: an ecologically-conscious society with
1/5 mankind; world’s car industries to be revolutionized
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MegaTrend 6 – Science, Technology and Innovation
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Chang’e-1 Moon Probe (2007), Shenzhou-7 Space Walk (2008).
Planned Tiantong-1 small space station in 2010 -11 + docking with
Shenzhou 8, 9, & 10; Lunar Rover on moon surface 2013-17; Lunar
Rover exploration and return 2017-20; planned satellite Yinghuo1(+ Russian Phobos-Grunt) to fly towards Mars 2009; possible
participation in European Space Agency’s Aurora manned Mars
exploration program 2030
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5m university graduates p.a. mainly engineers and technologists,
top in nos.scientific papers. Vast majority no productive research.
Still no home-grown Nobel Prize laureates. Committee
representation, let alone chairmanship, extremely low in world-class
scientific organizations
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But fast developing technologies in energy and water resources,
environmental conservation, proprietary technologies, life sciences,
aeronautics, and ocean sciences
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Various silicon valleys, leading science parks e, g. Beijing’s
Zhongguancun and high-tech cities like Hefei, Anhui. 40% of
overseas post-doctoral students in US are from China. Growing
numbers of scientific returnees to seek greener pastures
•
International corporate R& D centres 750 (100 in India), 35% v
UK 47% and US 59%
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Shenyang Aircraft Corporation joint ventures in assembly and
fuselage manufacture with Boeing, Airbus and Bombardier. May
2008, Commercial Aircraft Corporation of China formed with
capitalization of $2.7 billion to compete with Boeing and Airbus.
China’s home-made regional jet ARJ21 maiden flight on
28.11.2008 with an order book > 100 aircraft
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Global implications: China’s aerospace industry, including
commercial satellites, is set to grow by leaps and bounds.
International space program cooperation. Growing competition in
world’s aircraft industries. Advances in life and environmental
sciences and commercialization
18
MegaTrend 7 – China goes more Global
• 3 world top 5 by market capitalization - PetroChina ($1trillion, 2 x
ExxonMobile), ICBC (world’s largest bank), and ChinaMobile
• Chinese corporations + SWFs taking equity in financial and energy
companies: ICBC 20% in Standard Bank, Africa’s largest bank;
CHINALCO (Aluminum Corp of China) planned 30% stake in bauxite
mine of Rio Tinto; Geely bought Volvo from Ford for $1.8b and majority
stake in Magnanese Bronze (London Black Cab)
• Controlled outflow - $10b (Deutsche Bank); Liberalising QDII - 50%
overseas investment quota for approved equity funds
• 4 of Big Five state-controlled banks have embraced foreign equity: HSBC
19.9% of BoCom; BoA 10% of CCB; Goldman Sachs 10% of ICBC; RBS’s
(recently divested) 10% of BoC. Local incorporation of foreign banks –
Citibank, HSBC, SCB, BEA
• China to grow RMB private equity – Wu Xiaoling, Dep Gov, PBoC, 2007
China M & A Annual Conference, Tianjin. Launch of stock index futures
– approved in principle (08.01.2010)
• RMB as storage of value and stable means of exchange. RMBdenominated transactions and financial products more acceptable for
China-related businesses. Eventual full convertibility.
• China to build 3 transnational high-speed (200-350 km/hr) rail links by
2025 (a) Kunming to SE Asia (Vietnam, Thailand, Myanmar, Malaysia,
Singapore); (b) Urumqi to Kazakhstan, Uzbekistan, Turkmenistan, Germany?) (c) Heilongjiang – Siberia – W Europe (BJ/Lon in 2 days)
(SCMP 8 March 2010)
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MegaTrend 8 - Defense
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Historical trauma with continental-sized borders and
coastline anxious to protect territorial integrity
(including Taiwan) + choke-points of life-blood
energy supply
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Total defense expenditure (2/3 for personnel,
training and maintenance) < UK, Japan, France, and
Germany v US expenditure > rest of world combined.
As % GDP, much < UK, Russia and France v US
(China’s 2006 National Defense White Paper)
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In light of US repeatedly rejection of call from 160
countries, China included, to de-militarize space,
China showed capability of killing moving satellite as
space defense deterrence
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Already a nuclear power, only major country without
a single aircraft carrier, doubt about cost- benefit of
blue-water navy + regional diplomatic interests
giving way to clear signal (Defense Minster, 20.3.09)
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Likely to to keep up with modern military technology
for more cost-effective credible deterrence,
including submarines and asymmetric warfare
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Global implications: need for more transparency to
ease ungrounded fears (China needs benign
environment to continue survival); scope for more
international cooperation for peace-keeping and fight
against piracy
20
MegaTrend 9 – Building a Harmonious World
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Best defense is having no enemies – Confucian Harmony Also joining no
blocs.
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Simply cannot afford to be aggressive. Need for benign environment to
build solid foundation - numerous challenges and contradictions + looming
aging population profile
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US - Leadership accepted except where national interests undermined, but
differences on China’s internal issues and international approach to conflict
resolution remain
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EU- main trading partner and plenty of scope for economic, trade, investment,
technological, and scientific cooperation, but differences on China’s internal
issues remain, less so v US
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Russia – Energy partner and balance against uni-polarity
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ME – Main oil supply source – eager to see more stability (geopolitics) but
unlikely to intervene in ME politics
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ASEAN and the Asia community growing importance in global supply
chain + geopolitical advantages in the Asia-Pacific
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Central Asia - Shanghai Cooperation Organization – harmony in neighboring
region and alternative energy supply route – national security
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Africa for 3rd world cooperation and trade/investment in resources
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Latin America – also 3rd world support + Venezuela (energy + support in US
backyard); Brazil (soybeans and resources)
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Global implications: Waning dominance + economic symbiosis, US needs
China as much as China needs US (Global Trends 2025 – A Transformed
World, National Intelligence Council, Washington D.C., November, 2008).
China growing global influence likely more active in UN, World Bank and
the IMF, dynamics for a more harmonious world best suited to China’s
national interests.
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MegaTrend 10 – Civil Society
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Vibrant civil society rapidly developing, e.g. spontaneous response to Sichuan earthquake
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Quarter of a million local NGOs campaign for consumer rights + environment + the under-privileged
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80 to 100 million practising Christians (Jesus in Beijing, David Aikman, 2003)
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Vibrant 36 million blogs.
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More public hearings for major polices, often mandated by law
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Local elections held for all village and county chiefs and urban neighborhood committees
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More party secretaries and senior officials monitor public feedback through the internet
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CPC ‘government for the people’, law-based governance, official accountability, public transparency, public
consultation, fight against corruption, more freedom of expression as instruments for legitimacy. Direct entry to
government through public examinations. Competitive progression to high office. Confucian ideal of Mandate of
Heaven ‘shi ren xinzhe, shi tianxia’ (He who loses the hearts and minds of the people, loses the world).
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CPC think-tank on reform of political system post-17th Party Congress – NPC and CPPCC, centralizing power to
appoint judges in the provinces (Storming the Citadel, Professor Zhou Tianyong et al, November 2007).
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Global network of Confucius Institutes, ultra-modern CCTV English channels, ancient culture and architecture,
UNESCO-designated world heritage sites, colorful arts and customs all attracting an ever-mounting number of
foreign tourists + trade, business, professional, academic, and educational visitors from all corners of world
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Renaissance China defined by 21st C interpretation of the Confucian Golden Mean, calibrated balance between
opposites, + prudent harmony between contradictions
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Global failure of market fundamentalism + looming ecological collapse - a blindness to excess and a disregard
for prudence. A renaissance China stands a good chance of restoring a measure of global balance and harmony.
A roadmap for Sustainable Industrial Development
State Council, October 2008
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Value-added hi-tech industries + 5% : IT, bio-eng, aeronautics, space
aviation, new energy & materials, marine industries
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Energy efficiency, conservation + emission reduction in processes,
projects and buildings; restrict energy-and-emission intensive industries
(coal – 77.2% 1980 - 69.4% 2007);Energy Law in draft; 12th FYP 2011-15
•
Renewable energies - nuclear, hydro, solar, wind, biomass, marsh gas,
solid + liquid bio-fuels as % primary energy by up to 10%; coal-bed gas up
to 10 bcm
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‘Less input, consumption, emission + high efficiency’, including energy
optimization, energy conservation and eco-preservation
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Concrete progress building water-conserving society; complete anti-flood
systems large rivers + drought resistance of farmlands
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Recycling Economy - Circular Economy Promotion Law 29.8.08
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Accelerate service sector - value-added contribution to GDP by 3%
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S & T + international cooperation ‘C but Differentiated R’
State Council February, 2009
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Light, petrochemical, non-ferrous metals + logistics industries – ruralurban consumption, tech upgrade + innovation, -outdated capacity;
environmental protection and energy conservation, M & A to achieve scale,
clusters in central & Western provinces, quality and food safety
24
China’s Green Opportunity
McKinsey Quarterly, May 2009
• 2005 GHG emissions mgt CO2 equivalent
• Unrestrained growth
• 2030 frozen technology scenario
• Policy reduction (policies, targets, tech development)
• 2030 Policy scenario
• Full technical abatement potential*
• 2030 Abatement scenario
*
*
*
*
*
6.8
+ 16.1
22.9
- 8.4
14.5
- 6.7
7.8
Green Power – 2005 % Coal (81) 2030 % Coal (34) hydro (19), nuclear (16), wind
(12), solar (8), gas (8), other (4)
Green Transport – 330m cars by 2030 > US; 100% green cars by 2020 = oil import
less 30-40%
Green Industry – 1/3 of energy consumed 44% emissions; technology, efficiency,
standards, conservation, recycling (e.g. coal-bed methane), agric waste, CCS
Green Buildings – eco-villages, towns and cities; natural gas, CFL (compact
fluorescent light-bulbs); green designs, efficient heating and ventilation
Green Ecosystems – Forest coverage being raised from 11 to 20% by 2010; regulated
grazing; widespread use of agricultural methane (already 23m homes); sustainable
agriculture – land management, desertification and water management
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Lessons from Financial and Ecological Collapse
•
•
Survival, Adaptation, and Transformation
Global Financial and Economic Crisis
– Overleveraging ($1.4 quadrillion debt, some still
underneath the carpet)
– Excessive fundamentalism
– Adam Smith’s missing Visible Hand
– Global economic imbalance
– Who Moved My Cheese? Spencer Johnson, 1999
– Chrysler, Volvo, Magnanese Bronze v GM, GE,
IBM, R J Reynolds, BYD, Suntech, Alibaba
•
Collapse, How Societies Choose to Fail or Succeed,
Jared Diamond, Penguin Books, 2009
–
Easter Island – Splendid isolation, 1400 m from
nearest habitable island; first settled 900 A.D,
original pristine paradise, Giant Palm (80 ft tall,
6 ft diameter); statue (moai) production peaked
1200-1500, @up to 65 ft tall 270 tons;
accumulative deforestation; collapse of food
chain; by 1700 population crashing + wars, all
statues toppled by 1884, today only 2 small trees
and 2 small shrubs left
–
Greenland Inuit v Norse – Adapted sewn-skin
kayak + harpoons with bladder floats as efficient
hunting machines for resource-rich whales;
Norse tied to European origin: church, walrus
tusks for income (wiped out by new supply of
ivory from new colonial era)
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Andrew Leung International Consultants Ltd
Thank you
Andrew K P Leung, SBS, FRSA
www.andrewleunginternationalconsultants.com
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