China realizes how vulnerable its export-driven economy is becoming, and is setting itself up whilst the powerhouse in a post-peak oil regional economy. The federal government understands that companies wil dramatically reduce their orders for products from far-away lands during times of painfully high oil prices, and that the global economy will constrict as a result. So policy-makers are doing everything they could to implement a power production system independent of forces outside China.

In the media, tag words such as for instance "Conservation" and "Environmental Protection" are now actually spoken as frequently as "Harmonious Society ".But that's mostly talk. If you read China's business news each day, which I actually do, you will see a breath-taking development in your community of energy. The business enterprise press suggests a concerted effort to break from procurement of insecure energy resources outside China's control. Instead, the nation is building energy self-reliance, with environmental protection obtaining the dirty end of the stick for more info southeastasiatraders.com

China isn't building great walls to help keep away the barbarians anymore. Outside the nation, its oil companies are focused on buying up petroleum resources to provide the Middle Kingdom a resource advantage as scarcity becomes more apparent. Inside China, industry is revving up oil infrastructure capacity and refining production to produce domestic self-reliance. A lot of China's IPO (initial public offering) frenzy is directed at gobbling up investment cash worldwide to buy use of commodities now, whilst it continues to be relatively cheap and freely available on global markets.

A Flattened Economy: Imagine some sort of in which energy costs are in the stratosphere, and the West's addiction to oil helps flatten the global economy. Western countries are in a tailspin. The entire world economy is shrinking as high oil prices eat into disposable income once allocated to items imported from China. Those same oil prices have screwed up the economics of international shipping. Sound unrealistic? Read this.

 

 

 

 

 

 

 

 

 

 

 

 

 

In China, unemployment would reach stratospheric levels if there were greatly reduced factory orders from the remaining portion of the world. Today, perhaps 100 million factory workers churn out products in China. What if 10% were without jobs? You would need energy to supply public works projects to help keep those workers employed. That you do not want ten million out-of-work, hungry factory workers showing up at your front door requesting change.

An incomplete solution to the nightmare would be to strengthen regional ties, since regional economies consume less energy than global trade. Can China exist in a regional framework while continuing to expand its domestic economy under a power program focused on self-reliance? If you buy the notion of peak oil, it looks like the most effective bet. In the end, most of the world's consumers reside in China's neighbourhood. The Chinese economy is based on exporting manufactured goods. The buying must not stop.

Propping up the Greenback: Until recently, part of Chinese strategy was to put on Treasury Bonds issued by the US in the Chinese treasury as a financial tool. Purchases of those bonds helped the central government maintain a favourable exchange rate vis-à-vis the greenback for the yuan. Then came the made-in-America subprime fiasco, which led to crisis in the world's capital markets and the partial collapse of the US dollar. It cannot have now been lost on China's central bankers that propping up the buck is definitely an unsustainable long-term strategy.

As in the matter of self-reliance in hydrocarbon liquids, China will use its great energy to mitigate the difficulties it's facing. Expensive, scarce fuel means you'll need shorter trade routes, so China will definitely create a land link through Myanmar (Burma) to the Bay of Bengal. This may greatly strengthen its turn in the regional economy. It's a hop through Yunnan Province by rail, a skip to the coast in Myanmar, and a three day jump over the Bay of Bengal to Calcutta or Madras. Consider the quantity of fuel saved by going right on through Myanmar to India rather than skirting every one of Southeast Asia and travelling up the Straits of Malacca to India.

How will the investments of Western corporations fare as China focuses increasingly on a regional economy? Well, joint venture plants and factories won't be disassembled and repatriated to the investing nation. They will be used within China for China's people.

The Great 100 Year Plan: The Chinese Government must certanly be seeing parallels between the astonishing growth of its economy and the creation of Hong Kong. You build it, we keep it. You've set up our economy with your generous investments, built factories for people, given us your technology and knowhow to create goods, and tutored us on oil refining and coal technologies plus solar and wind-power generation. You can go now. Thanks for coming, but we can keep the factories or details southeastasiatraders.com