China's Secret Reason for Electrification
Preparing for War, but not on Climate Change
China is electrifying its economy at breakneck speed. But the way it does it makes little sense if carbon emissions were the reason.
So why are they doing it?
Because they are busy making China more resilient to THE geopolitical threat that could bring the country to its knees.
Analysts like me occasionally stumble on completely dissonant data. Dataset A supports “opinion 1”, while dataset B supports the diametrally opposed “opinion 2”.
There are 3 ways this can be solved:
Just find which of the dataset is wrong or incomplete.
Admit you just don’t understand and move on.
Find a new interpretation, “opinion 3” that can make sense of both datasets at once.
For a while, not just me but analysts worldwide have been struggling with an apparent contradiction:
Dataset A: China does not care about global warming at all.
As a proof of that, we don’t need to look further than the ever-expanding volume of coal burned for power generation, as well as a new coal power plant opening EVERY WEEK.
With coal the most carbon-intensive energy source, it is pretty clear that China’s leadership does not actually care about carbon emissions and global warming. They claim to want to phase out coal, but actions speak louder than words.
Intensive drilling for oil and gas inland, in the waters around China, or as far as Guyana (as I explained in the CNOOC report) confirms “opinion 1” of a carbon-intensive future for China.
Dataset B: China is the world leader in the energy transition
China is responsible for building most of the world's renewable power generation both wind and solar. As the WEF acknowledges, “China is leading the renewable energy revolution“.
It has also by very far the most electrified transportation system. Already in 2019, China had 50x times more electric buses than the rest of the world combined.
China has also more (electrified) high-speed train railroads than the rest of the world combined.
(I feel I have to say “than the rest of the world combined” a lot in this article)
Half of the world's electric vehicles (EV) are in China.
Electric and hybrid vehicles make for 1/4 of total sales in China.
To top it all, China will build a gigantic number of 150 nuclear (carbon free) power plants in the next decade.
Very clearly, China is sparing no expense in subsidies, massive public projects and spendings to reduce its carbon footprint.
So contrary to dataset A, “opinion 2” is that dataset B shows that China does everything it can to decarbonize its economy.
Finding Opinion 3
In virtually EVERY article and report I read on the topic, the journalist or analyst ignores this contradiction.
Green enthusiasts praise China for doing so much and bemoan the West for failing to replicate this green push.
Global warming and decarbonization skeptics point at coal consumption, and say all the Western green policies are idiotic as neither China nor India will ever do anything similar.
The few that recognize the mere existence of both datasets A & B only mention it in passing. Something along the lines of “despite green efforts, power generation still needs more efforts”.
This type of comment is highly unsatisfactory.
Why start so hard with vehicle electrification, when switching away from coal would have been a lot more efficient method to reduce carbon emissions?
The real reason is missed by analysts because nowadays, everybody is obsessed with being pro- or anti- climate policies.
The real reason is about supplies and a self-sufficient economy.
China's push for autonomy
As I will explain in the next report, China’s leaders are (rightly so) obsessed with the threat of a blockade.
How would a blockade manifest first? By cutting China off the energy supplies from overseas.
Instantly, the flow of 10 million oil barrels per day would stop. So would the 15 billion cubic feet of gas per day. And the 250 million tons per year of coal.
This would mean endless power outages. People not able to commute to work. Heavy industries like steel and petrochemical grinding to a halt. No more pharmaceutical production. No more fertilizer production.
No oil also means no mining, even coal mining for that matter.
Instantly, not only the economy but the very things necessary to keep the Chinese people ALIVE would stop. Things like fertilizers, food, warmth, power, and transportation.
This would also utterly crush the country’s military power. Rather inconvenient as such a blockade would happen during or as a preparation for a global war with the USA and its allies.
Armies run on fuel.
There is, and will not be for at least 20 years, no valid alternative to fossil fuel to run a military force efficiently.
Electric buses are possible, electric tanks are just not an option.
So in the case of war + blockade, you would need to save ALL the local gas & oil production for the war effort (military + industrial production of weapons).
For reference, energy shortage is probably what defeated Germany in both World Wars.
Electrification to make China blockade-proof
It is clear that solar and wind are a less cost-efficient way to produce power than burning coal, oil, or gas.
But you know what a built solar farm or windmill does not need once built? Imports.
Especially when your country controls the entirety of the renewable energy supply chain…
In a very similar way, maybe an electric car or bus is not that much more efficient than an internal combustion one.
But once you built its batteries, using currently abundant fossil fuels, EVs can run on all sorts of “fuel” besides oil: hydro, sun, wind, nuclear, and yes, coal; all sources of energy China is “overbuilding”.
Such a coincidence that all this overbuilding and “mismanagement” exclusively goes toward non-oil & gas power generation…
And toward electrified mass transit transportation, like A LOT more than needed high-speed trains and turning ALL buses electric. Almost as if planes and cars could become stranded by oil shortages and people would need alternatives to keep going to work…
What a coincidence indeed…
Why coal?
This is really the last piece of the puzzle. China and its neighbors are very coal-rich.
Coal is a solid, while oil is liquid and natural gas is - well - a gas.
So coal can be stockpiled on a massive scale very easily, contrary to oil (hard) and gas (very hard).
In case of a coming war, you would want to ramp up imports as much as possible, giving you months or years of stockpiled energy.
If you are Xi, you would want a lot of new power plants that can be relied on during a war and a blockade.
So you would build:
Hydro, Solar, and Wind anywhere you can fit them, producing power “for free” without “fuel”.
Nuclear power plants, supplied with Chinese, Russian, and Kazakh uranium (Kazatoprom produces half of the world's uranium, no supply risk here).
Coal power plants, relying on local production and some imports from neighbors:
Russia, a supplier only limited by transportation bottlenecks, also building the 3nd largest coking coal mine on Earth since 2020, RIGHT on the Chinese border, (coking coal is more used for steel making) whose new owner has been referred to as “The Russian businessman is China's middleman of choice“.
Kazakhstan, a country I featured in my last report, and other central Asia countries as well as Mongolia.
African allies, including BRICS member South Africa.
Australia is still a large import source, but forcing a switch to other suppliers is likely the real reason behind the Australian coal import ban of 2021.
The plan
So in my (not so humble) opinion, I think I figured why China is “wasting” literal TRILLIONS on renewable energy and EVs. This is not for economic reasons, but a strategic plan long in the making.
The country is aiming for a critical mass of EVs + trains to keep the economy running without sea-born oil imports.
New coal power plants, new nuclear power plants, new solar power plants, and new windmills will be there to power these EVs.
New pipelines from Russia will help as well.
These plans for energy autonomy have been accelerated to warp speed since 2020-2021.
My suspicion is that this stems from 2 factors:
Xi consolidating power. Other factions might have been more concerned about avoiding conflict or making money. Xi’s faction is busy preparing China for conflict.
Biden administration doubling, tripling, quadrupling down on Trump’s trade war policies. China’s leaders might have hoped for a detente after the erratic policies of the Trump era. The opposite has likely fueled paranoia and reinforced Xi’s position. Freezing the $300B monetary reserves of Russia was the last straw.
The next publication will be the long-promised “The coming blockade of China” report, which I will publish over the weekend.
It explains how it will play out, depending not on IF it happens, but WHEN it will happen.
I think you're spot on here
Thanks for the well written piece and sharing your insights. What do you think would be the roadblock for China not being able to implement this plan?