China Opens A Window of Opportunity 2014-2020

by John Brian Shannon.

Three Decades of GDP Growth

After three full decades of impressive GDP numbers, China’s strong growth looks set to continue until the end of the decade.

Never in history has any country accomplished such staggering GDP growth numbers, modernized its infrastructure, oriented its political structures to accept a minimal degree of capitalism, and carry the demands of 1.35 billion people.

Let’s take a look at China’s 1979-2013 GDP numbers.

China GDP growth 1979-2013. Image courtesy of the IMF.

China is now enjoying stable growth rates. In short, as China’s economy has matured, it has successfully transitioned from a Frontier economy to an Emerging economy — and with plenty of momentum in hand, has settled-in to the long-term task of building a Developed economy.

For those willing to engage with China there is the potential for substantial reward, and as in any emerging economy, an element of risk is associated with investing there. In the case of investment or corporate relocation to China, responsible leaders and individual investors alike, are wise to seek the guidance from experienced professionals as they navigate several cultures and languages and the various levels and departments of a (still) communist government.

Focus on Planning

Fortunately, statist economies like China’s are centrally-planned in five year cycles, and for the most part these five year plans are released, translated, and then published by the media.

For one example of China’s long-range planning, in this case regarding China’s aggressive energy, renewable energy and conservation policies, please see: CHINA – Atmospheric Pollution Prevention Action Plan – State Council on the issuance of air pollution control action plan notification – Guo Fa 2013, No.37 [English Translation]

For a summary of that official document, please see: China’s new Atmospheric Pollution Prevention Action Plan

Addressing the Source

One of China’s most pressing problems is the quality of life for her citizens, the absence of which can affect overall citizen satisfaction and even worker productivity.

The poor air quality in China, which reportedly leads to 410,000 premature worker deaths per year, has been addressed with a huge push towards renewable energy. The Common Language Project (clpmag.org) provides a telling snapshot:

“China faces a number of serious environmental issues caused by overpopulation and rapid industrial growth.

Water pollution and a resulting shortage of drinking water is one such issue, as is air pollution caused by an over-reliance on coal as fuel.

It has been estimated that 410,000 Chinese die as a result of pollution each year.

Deforestation and desertification are also issues and an estimated one-fifth of agricultural land since 1949 has been lost to soil erosion and economic development. The country is also host to the trade of endangered species. The country’s rivers constitute the largest potential source of hydropower in the world.

Since 2007, China has stepped up government efforts to work toward environmental sustainability by holding local officials to national standards, publishing national climate change policies and establishing groups on climate change.” — clpmag.org

Measurable Results

To say China’s leadership has posted an aggressive response to air pollution, water pollution, soil contamination and the follow-on effects on citizen health and the economic costs of widespread pollution is a verifiable understatement.

In only a few years, China has surpassed wind and solar PV leaders Germany and the U.S. in the production and installation of wind turbines and solar panels and increased energy efficiency.

Announced in July of 2013, China’s National Energy Administration told the media that they expected to install 10 GW of solar by year end of 2013, another 10 GW of solar to be installed in year 2014, and yet another 10 GW of solar to be installed in year 2015.

While many nations were installing mere MegaWatts (MW) of solar or wind power in an effort to ‘look green’ — China’s energy officials said that although they had planned to install 10 GW of solar power in 2013, China may have surpassed that target by a full 4 GigaWatts for a grand total of 14 GW of solar installed in year 2013!

It was later announced that 12 GW would be installed in year 2014, and it has been reset once more to 14 GW of solar PV power to be installed in year 2014.

The latest pollution reduction measures announced in China now point to increased spending on energy efficiency and a commitment to the installation of 14 GW of solar panels in 2013 (already done), another 14 GW in year 2014 (in progress) and yet another 14 GW for 2015.

Now that’s an active pollution management file.

Energy news is never boring in China — so stay tuned!

Published by

John Brian

Editorial Board at kleef&co. Published by the UNDP.