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Thursday, February 29, 2024

MEDIA EXTRACTS ON CHINA #494

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#1 RE EV’S – TESLA DETHRONED OR JUST A BLIP?

#2 CORRUPTION AT MINISTERIAL LEVEL IN CHINA

#3 “CHINA’S STRIKING ADVANCES IN GREEN TECHNOLOGY” SAYS THE FINANCIAL TIMES

#4 CHINA DISCOVERS TOMB FROM 193BC

#1  MORE ON ELECTRIC VEHICLES – EVs

      NIKKEI ASIA

Tesla has been overtaken as the world’s bestselling maker of electric cars by a Chinese rival that is backed by Warren Buffett, the renowned investor. The American carmaker run by Elon Musk said it had delivered 484,507 vehicles between October and December, about 11,000 or so more than industry analysts had predicted. However, the Shenzhen-based BYD had reported on Monday that it had sold 526,409 fully electric vehicles in the same period.

It marks the first quarter in which BYD has outsold Tesla, although the latter still sold more across 2023, totalling 1.81 million cares compared with BYD’s 1.57 million. Tesla’s output was up 38 per cent year-on-year, but it fell short of the two million mark that Musk, 52, had targeted, despite a series of price cuts to try to woo would-be customers.

BYD benefited from a stronger end to the year for the broader Chinese electric vehicle market amid a price war that led to a 70% surge in sales in December.

The Chinese carmaker is unlikely to be a familiar name to many, despite having been founded in the mid-1990s by Wang Chuanfu, 57, who remains the company’s chief executive, and his cousin. It started out making rechargeable batteries used in phones and laptops before moving into the car industry

BYD’s growth has come almost entirely from its home market, where it is the dominant player. Last year, six out of the top ten bestselling electric cars in China were made by BYD. Recently it has been moving into other markets, including Europe.

The company also has become the envy of its overseas rivals. While they have been battling spiralling costs of raw materials and shortages of computer chips, BYD controls mines and makes its own batteries and chips.

Despite beating forecasts, Tesla’s shares were held back by the news of the company’s dethroning, having held the title of the world’s bestselling ­electric vehicle manufacturer since 2015. The shares were flat at $248.42 at the close in New York, valuing Tesla at nearly $800 billion. It therefore remains the world’s most valuable carmaker.

GRAHAM PERRY COMMENTS;-

Two points; first, it is a real achievement for BYD to sell more EVs than Tesla in the last quarter of 2023. As readers of this column will be aware, Chinese EVs have made a real impact in its sales into Europe  causing the EU to take measures to restrain its forward thrust into Europe. The second point is the financing role played by Warren Buffett – the well known US and international investor.

At the very time when the US is seeking to isolate China and impose high tariffs and duties on China goods entering the US, Warren Buffett has deepened his involvement with China. The White House is trying to close down the hatches on China just at the time its #1 investor is increasing his involvement with China.

This development highlights the conflicting priorities between US Politics and US Business. The White House focuses on the role of the US in the world whilst US Business focuses on the role of profit and     asset growth of the company. The two clash. The US Government wants to restrain, diminish and curtail China. It wants to bring China to heel as it did with the USSR in 1991. But US Business has a different set of priorities. It needs to meet the demands of its shareholders and pursue a blend of profit and growth to keep them satisfied.

It would have been a big moment for Buffett when the White House  learned of his investment in BVD and an ever bigger moment when BVD sales topped the figures of Tesla, the biggest entrepreneur in the Western world – Elon Musk.

A word of caution; this is just one quarter – October 2023 to December 2023. But for all that caution the figures are a worry for Mr Musk and a greater worry for President Biden.

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#2  CHINA’S BATTLE AGAINST CORRUPTION

      SOUTH CHINA MORNING POST

China’s battle against corruption set new records last year, with the ruling Communist Party’s anti-corruption watchdog launching probes into 45 senior officials, according to a tally by the South China Morning Post.

The record number of investigations came five years after Chinese President Xi Jinping declared a “crushing victory” in his war on corruption, a sweeping crackdown that was launched in 2013. The ongoing probe signals that he has little interest in letting up on an effort to clean up China’s officialdom while pushing authorities ever harder to implement his policies.

The number of senior-level investigations launched in 2023 jumped by 40 per cent compared with 2022, when the Central Commission for Discipline Inspection (CCDI) – China’s top anti corruption agency – recorded 32 investigations into high-ranking officials, based on official announcements by the CCDI.

China’s disciplinary enforcers add ‘bad’ books, sex, drugs to serious offences.

Most of the subjects who were placed under investigation – sometimes referred to as “tigers” – belonged to a pool of officials known as “centrally managed cadres”, meaning they held ranks at the deputy ministerial level or above. A smaller number of them held slightly lower ranks but occupied key positions in important sectors.

Unlike their subordinates who are managed and supervised by the local branches of the party’s organisation and disciplinary agency, the group of senior officials are under direct management of the Communist Party’s Central Organisation Department, its top personnel body. If any wrongdoing is found, they would face top level investigations from the CCDI.

27 of the 45 senior cadres who had faced detention by the disciplinary watchdog were found to have retired from their positions when they faced investigation, according to further research.

“Among the officials arrested in recent years, not many were caught corruption in their current positions. Most of the problems occurred in the past few years, or even more than 10-20 years ago. The CCDI is no longer following the previous unspoken rule that retired officials will be spared from investigation,” he said.

Xi’s anti-corruption drive – stressed in the opening paragraph of his first major address to the Party at the commencement of his first term of office in 2012 – was never about settling political scores though some of his personal opponents may have fallen from grace. The Chinese political system makes a better job of keeping their politics clean.

GRAHAM PERRY COMMENTS;-

It is useful to recall the catch phrase – Mao saved the Country. Deng saved the Economy. Xi saved the Party. Maybe a little dramatic – but only a little. Mao Tsetung ensured the creation of China by defeating the Kuomintang and the Japanese Invader. Deng Hsiaoping brought big changes to China’s economy that enabled the people to enjoy prosperity, increased material well being  and also facilitated the Belt and Road Initiative with 150 participating countries.

Xi Jinping’s determination to keep the Party clean and free from corruption has ensured that progress and growth in the economy, and integrity and character in the work of the Party members, has been maintained.

Lord Acton, a 19th Century UK historian is famous for saying – “Power Corrupts and Absolute Power Corrupts Absolutely” The Yugoslavian Communist, Milovan Djilas, wrote about the New Class by which he meant that Communist Parties that succeed in winning power are prone to corruption and instead of serving the people they serve their own leadership and their own interests.

Xi warned of this development in his very first Party speech in 2012. He said that if corruption took root in China, the people of China would quickly lose their faith in the Party and dispense with it. This explains why he has maintained a strong focus on the behaviour and work of Party members especially at the highest level.

Corruption is not just about bribes. It is about the abuse of power. The Party serves the People and not the advancement of the Party members. An example occurred when an earthquake destroyed all the buildings in a Town except the building that housed the members of the local party leadership – that building was made with stronger reinforced materials than the collapsed buildings. The Party officials was looking after the Party leadership and not the people. They were all removed from office.

The Party is at the apex of power and power must be exercised to promote the well-being of the people and not the advancement of the individual party members. If they do a good job and are well qualified for higher office they will be promoted. If on their way up they  engage in corrupt behaviour they can expect to be expelled and punished.

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#3 “CHINA’S STRIKING STRIKING ADVANCES IN GREEN TECHNOLOGY” 

THE FINANCIAL TIMES.

China’s BYD overtaking Tesla as the world’s best-selling brand of electric vehicles is one of the most eye-catching headlines of the first week of 2024. But it is just one of the green milestones that China has recently achieved.

More important for the world’s environment was the news late last month that China’s share of renewable energy capacity — mostly solar, wind and hydro — reached about 50 per cent of its total generation capacity in 2023. Renewables’ installed capacity surpassed that of coal power for the first time, according to Xinhua, China’s official news agency.

China’s advances in deploying clean tech should be applauded, even if it is continuing to expand its use of fossil fuels such as coal. The country remains the world’s biggest emitter of carbon dioxide, a greenhouse gas implicated in global warming, accounting for 31 per cent of global emissions in 2022 — more than double America’s 13.6 per cent. Its progress towards a green transformation is therefore of vital importance.

Key insights lurk among the detail. One is that new renewable energy was more profitable than relying on coal and gas for 14 Chinese electricity generators researched by Rystad Energy, a consultancy. While China’s renewables installation in its early days was pushed by state policy, it now seems increasingly to be driven by the profit motive.

Another revelation is that China’s state-owned enterprises, often seen as lumbering giants, are helping to accelerate the adoption of clean tech. Such SOEs, which contribute the lion’s share of China’s gross domestic product, have the resources and backing to develop at scale some of the biggest solar and wind plants, even in remote areas. These dynamics, coupled with a clear political imperative, provide some reason for optimism.

China is on track to shatter its target of installing 1,200GW of solar and wind energy capacity by 2030 five years ahead of schedule, says Global Energy Monitor, an industry publication. Several international experts also forecast that Beijing’s target of reaching peak CO₂ emissions by 2030 will probably be achieved ahead of schedule. If this happens, it may embolden China’s voice in climate negotiations.

Already, “environmental responsibility” is part of a Global Civilisation Initiative unveiled by Xi Jinping, China’s leader, last year as part of Beijing’s vision for an alternative world order to challenge that of the US-led west. Indeed, as leaders in solar, wind and EV technologies, Chinese companies harbour considerable ambitions to capture overseas markets in the developing world as well as in the west.

For the West, China’s growing prowess in clean tech represents a dilemma. The US and European countries risk becoming overly reliant on a strategic rival for some key renewable technologies. To avoid this, rather than engaging in knee-jerk protectionism, they need to do more to nurture their own green sectors through incentives, faster planning procedures and investment in infrastructure. But when it comes to climate change, Beijing’s green advances should be seen as positive for China, and for the world. 

GRAHAM PERRY COMMENTS

China’s BYD overtaking Tesla as the world’s best-selling brand of electric vehicles is one of the most eye-catching headlines of the first week of 2024.

But it is just one of the green milestones that China has recently achieved”

“Renewables’ installed capacity surpassed that of coal power for the first time, according to Xinhua, China’s official news agency.”

“Key insights lurk among the detail. One is that new renewable energy was more profitable than relying on coal and gas for 14 Chinese electricity generators”.

“China is on track to shatter its target of installing 1,200GW of solar and wind energy capacity by 2030 five years ahead of schedule, says Global Energy Monitor, an industry publication. Several international experts also forecast that Beijing’s target of reaching peak CO₂ emissions by 2030 will probably be achieved ahead of schedule”

China is often portrayed as the Bad Boy of Climate Change and it is the case that it is continuing to expand its use of fossil fuels such as coal. But the West often overlooks the reliance on coal that facilitated  the Industrial Revolution in the UK between 1760 and 1820, and the construction of the US railway system towards the end of the 19th Century that was at the heart of US economic development and led to the surge in international power of the US in the 20th Century.

China has been an underdeveloped country that readily recalls the 19th Century of Humiliation that Western countries imposed on China. China is still playing catch up. It will soon be the largest economy in the world but in terms of the standard of living it still remains a moderately prosperous country with an average income per person of approximately $13,000.

China has repeatedly confirmed that  it will be carbon neutral by 2060 but it is not standing still and waiting for 2060 to be reached. Cited above are examples of current pro-Green policies, not least the achievement of BVD in becoming the largest seller of Electric Vehicles; second, Renewables installed capacity has exceeded coal power for the first time; and, thirdly, China is on track to break its target of installing 1,200GW of solar and wind energy capacity by 2030 five years ahead of schedule.

China has a record of meaning what it says and US Climate Supremo, John Kirby, speaks positively about his meetings in China with officials leading China’s Green commitment. Green achievements are not sexy and lose their appeal with reliance on statistics but they are still real and one can predict with certainty that China will meets its Green targets all the way up to 2060.

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#4  ARCHAELOGICAL FINDS DATED 193BC              SOUTH CHINA MORNING POST

Archaeologists in China recently discovered a well-preserved burial site in southwest China from the early Western Han dynasty (202 BC – 25 AD), which contained enough evidence that the team could confidently say the tomb was sealed in 193 BC.

The site was found during the construction of a hydropower project in Chongqing municipality in southwestern China.

The high quality of the site was primarily because it was underwater, but the chamber had not been breached, meaning the wooden coffin and funerary objects sat undisturbed for millennia without discovery or deterioration, according to state-owned newswire Xinhua.

This aerial photo shows the archaeological site of a tomb dating back to the Western Han dynasty (202 BC – 25 AD) in Wulong district of southwest China’s Chongqing municipality. Photo: Xinhua/Huang Wei

The wooden coffin remained exceptionally well preserved, and scientists found 600 artefacts during the first excavation, which included various items made out of lacquer, wood, bamboo, bronze, and pottery.

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Huang Wei, who led the excavation project, said in the report: “What is exciting about this discovery is not just the large number of unearthed artefacts but also a list of burial items that indicate a precise record of burial, which has been verified as 193 BC, providing clarity on the tomb’s date. A piece of unearthed jade ware shows the prominent position of the tomb owner.”

The date makes the tomb the earliest known Western Han burial site discovered in China. One significant discovery was finding ganzhi, which are ancient pieces of wood used to represent the sexagenary cycle of the Chinese zodiac. The sexagenary cycle is a 60-year cycle with more specific zodiac representations, such as the “fire horse” or “water pig”.

These wooden slips were how ancient Chinese civilisations communicated through writing before the invention of paper. The ganzhi, or wooden slips, are the first time that the specific artefact has been discovered in China.

GRAHAM PERRY COMMENTS

I include this non-political item to keep abreast of important advances in China. It is quite thrilling to see the confidence among Chinese archaeologists that this discovery is not just about the large number of unearthed artefacts but also a list of burial items that indicate a precise record of burial, which has been verified as 193 BC,

GRAHAM PERRY

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