Here is what's holding back China's plans for world domination

There is no doubt that China wants to subjugate Asia, echoing Japan's role during World War II. For those who think China's economy might overtake the United States economy, and thus make China a more formidable adversary, this article aims to provide detail on China's main constraint in that ambition: that its domestic coal production is near its peak and will then go into long-term decline.

Even if China can keep its energy supply constant with an accelerated expansion of its nuclear power sector, the cost of producing coal from deeper mines will mean that the costs of industrial production will rise due to higher feedstock costs. One of the reasons that China produces the world's cheapest solar panels, for example, is because it has some of the world's cheapest coal-fired power. German solar panel-producers are hobbled by that country's energiewende, which, translated from the German, means the miracle required to replace coal and nuclear power with sunbeams and breezes and still have a functioning economy.

Figure 1: The United States and China: Primary Energy Consumption by fuel in 2016.

To put China's situation in perspective, Figure 1 shows the contributions to total energy supply in China and the United States in 2016 expressed in millions of tonnes of oil equivalent (data from the 2017 BP Statistical Review of World Energy). [Editor's note: One tonne, or metric ton, is equal to about 1.102 U.S. tons.] Coal absolutely dominates China's energy supply. This would be good for China if its coal were going to last a long time. But China is depleting is coal endowment rapidly.

One of the reasons why the U.K. dominated the Industrial Revolution is because it was the major coal-producer on the planet at the time. China now dominates world coal production with half the total.

According to the theory of resource extraction, the coal that is easiest to mine is mined first, and then, after half of the total resource is mined and consumed, operating costs per tonne start rising as supply falls. The era of the cheap energy that fueled China's economic expansion in the 21st century is almost over. Note the little spike in production on the graph in 1960, which was due to the Great Leap Forward.

Trumps Energy Policy

From CNN yesterday:

America could become oil king of the world in 2018

by Matt Egan @MattEganCNN January 3, 2018: 11:33 AM ET

The United States is poised to ramp up crude oil production by 10% in 2018 to about 11 million barrels per day, according to research firm Rystad Energy.

Surging shale oil output should allow the United States to dethrone Russia and Saudi Arabia as the planet's leading crude oil producer, Rystad predicted in a recent report. The U.S. hasn't been the global leader, nor ahead of both Russia and Saudi Arabia, since 1975.

Trump Energy Policy...more WIN

http://money.cnn.com/2018/01/03/investing/oil-us-russia-saudi-arabia-shale/index.htm

I look at this differently.

China is heavily dependent on access to US markets

China is a top down oligarchy w/ very shaky internal politics dependent on continued economic expansion to keep things quiet.

IF China's access to the US is cut, even by 10%, BIG TROUBLE IN BIG CHINA.

Trump knows this. Xi knows this.

Li'l Kim don't know this, but he's about to find out.

I am skeptical about some of the assumptions presented in this piece. Domestic coal production and energy cost as the catalyst for China’s foreboding economic turmoil?

I don’t doubt that China is due for a flatline or economic downturn in the near future. And I share concerns over their reaction, or need to expand if natural resources are their savior (conquest to occupy lands with resources).

However, China has both allies and buying power. They have investments in economies around the world that can be liquidated and/or leveraged. This is not the 1930s. China has proven, they can be pretty resourceful. If they were to build 4-6 nuclear power plants in the next 10 years, they could significantly reduce their need for coal. Again, it’s a large price to pay up front, but China has been playing long ball for a long time (until the last 10-15 years anyway).

The energy escort is very important, but just one market of inputs necessary to development.

Many overlook the basic infrastructure that allowed America to rise to the top of all the developed (industrialized) world. Obama was seeking to attack that fabric, thereby “levelling the playing field”.

It is this fabric that is the root of the war on Christian western man and his descendants.
Nobody else created this infrastructure to lead the world in progress, achievement and success. They view it as oppression lol.... some say it’s success is rooted in thievery.

I'm told China's coal industry is designed to soak up the unemployed.
A guy from a KY coal company said his employer was asked to design a surface mine in a China coal field. They came up with two draglines employing six people on two shifts.
The Chinese changed this to 35 or forty people, round the clock...

Don’t get me wrong. I am fairly confident that China’s economy is in trouble and set for a correction/decline. But there are a lot of variables and contributors.

If China is hiding poverty in needless jobs (like the coal industry, as you say), then they could create the same situation with anything. For instance, in some of their “peopleless cities” they built, there are armies of people employed to keep the city clean. There are no people to make the city dirty, but there are small armies of folks that sweep and pick up trash every day.

contrary to other posts, China has a strong youth population that is “modern” and in ways of the internet and smart phones, world leaders. This youth will and in fact is taking on leadership

The government will slowly change to coincide with the ascendent youth.

The article states that cheap energy in China came from an abundance of cheap coal. Replacing that with your more expensive nuclear power plants results in higher energy costs. We’ve all heard stories of narrow profit margins in China and even huge money losing sectors in the interest of development and growth. Factor higher costs into the mix and you can understand the author’s point.

David Archibald is a peak-oil believer and a Malthusian alarmist.
Needless to say, his simplistic predictions on China focused on energy and downplaying or even ignoring other more relevant factors (population IQ and education level, political stability, trade flows, financial markets...) are dead wrong.
He’d much better restrict his crystal ball to climate matters.

David Archibald is a geologist with experience in coal and oil shale operations within Australia.

There is a difference between mining for technically recoverable resources, and economically recoverable resources. When the costs-to-attain exceed the value of the end product, the resource stays in the ground.

As a side issue, the question of oil shale in the U.S. is whether there is any positive case flow after payback of loans and expenses is factored in.

Don’t forget China is very very active in Africa. Do you think they are there for altruistic reasons?( Natural resources) The Africans would at this point rather deal with the Chinese than the Americans since everything the Americans do seems to cost, the Chinese cost will come later.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.