Your grace attended to their sugar’d words,

But look’d not on the poison of their hearts :

God keep you from them, and from such false friends!

– Richard III

Written by O.B

Chinas offer to help Eurozone countries with their debt crisis last week could bear ominous tones behind the veneer of goodwill. The buying up of Greek bonds by Beijing will financially tie Athens to the demands of the CCP whether they are special trade preferences on Ouzo liqueur, abstinence from Nobel Peace Prize ceremonies, or even military satellite bases on Greek islands. It is an offensive that heralds a new generation of neo-colonialism. From Ancient Greece (ironically) to Rome, from the British Empire to the USA in the 20^th Century, China is heir apparent to becoming the world’s next superpower. With a foreign trade reserve that equals the entire EU debt, the Chinese are suddenly economically able to ‘rescue’ countries in need.

The situation is not just isolated in Europe. In one of the biggest foreign loans in history, Hugo Chavéz accepted $20 billion dollars in return for a steady supply of Venezuelan oil earlier this year. Africa continues to surrender its economy and infrastructure to the Eastern dragon as this month the continent signed on a loan agreement worth a further $10 billion dollars, further pushing Chinese investment in oil and mineral rich African countries, to the tune of $115 billion, a 46% increase in the last decade.

The transition of China from debtor to creditor has been extraordinary, and very much against the international tide. Ever since Deng Xiaoping unleashed the market economy, China has developed into the world’s largest foreign reserves holder. In 2009, China’s two sovereign wealth funds (the China Investment Corporation and the National Social Security Fund) held reserves of almost $2.4 trillion, close to 30% of the $8.1 trillion total.

By contrast, the West has inexorably been plunged into debt. EU debt is near equal to China’s foreign reserves as I have already mentioned, whilst the USA is saddled with 23% of the global total. On its side, China has issued warnings that Europe in particular will struggle to recover from its ‘chronic’ debt crisis. The recent €750bn European and IMF rescue fund is flawed in that the rescue financing will in the long run have to be paid at high interest rates according to Beijing. China’s Commerce Minister Chen Deming has commented that such “measures just turn an acute disease into a chronic one”.

The offer to help is there, and currently for the Eurozone, there are precious few other options to salvage economic stabilization. The question is whether we view China’s benevolence as purely that, or whether ulterior motives lie underneath the vocal and financial support offered. There is no question that a European recovery is in China’s best interests. As its biggest trading partner, there is an urgency to resume the demand for its exports, since China continues to produce more than it can consume. Yet money talks, and myriad forms of influence are steadily being bought by an increasing state-capitalist China. And what is one man’s gain, so becomes another mans loss; as China buys up government bonds internationally, the dollar steadily becomes weaker, reducing US economic influence. China has already agreed with Russia to quit the dollar in all further bi-lateral trade.

Three decades ago with the passing of Mao Zedong, an economy in ruins was left as his legacy. Struggling to stabilize itself domestically, China would play little part in the revival of the world economy after the oil crisis of the 1980’s. Now the situation facing the CCP is vastly different; buy, buy buy.

The letter said the lack of free speech in China is a “scandal,” the Morning Post reported. Signatories of the letter include Li Rui, former deputy head of the Chinese Communist Party’s organisation department and an ex-secretary for Mao Zedong; and Hu Jiwei, former editor-in-chief of the People’s Daily, according to the report.

The editors of Chinabeyondthewall acknowledge that this is a bloomberg report

China’s growth is phenomenal – everybody is writing about it. Everyone who’s been there will spout anecdotes of skyscrapers that erect themselves in a matter of days; of instances where three layers of road exist as fly-overs; and of an intricate network of impressively fast trains. China is building. Recent statistical releases by the bureau of statistics, Bloomberg and the IMF indicate that China will keep on building and that their ever-burgeoning current account balance will allow them to afford to in monetary terms.

But can China continue to afford it in material terms? By this I question whether China has sufficient access to the raw materials that are required to build the impressive physical features that guarantee it growth. Any economist can tell you that holding impressive quantities of cash (be it RMB, US dollars, Pounds Sterling: whatever) does not necessarily guarantee you a greater standard of living. And indeed Keynes famously confirmed that “in the long-run we’re all dead”- so what is the earthly good of the government having the potential to bestow wealth, harmony, better infrastructure and development if it can’t physically convert buying power into actual gains?!

Luckily and unsurprisingly, the Chinese government has been puzzling over this for quite some time. Instead of questioning the method of growth, they have enacted a shorter-term solution: go out and find this material! This makes plenty of sense: the political economy and sunk costs of the incumbent infrastructure could not be persuaded to change to something else even if it does exist. Furthermore, if the engine of the world was to grind to a halt to have a healthy debate on how else to improve growth, the world economy would “double-dip”; domestic projects would cease; companies world-wide would dissolve and the Chinese people would be back to the decaying infrastructure of the bad old times.

So it is only natural that the Chinese government should sure-up its supply of raw materials. For quite some time now, China has been the largest consumer of copper, tin, zinc, steel, iron ore and coal. It has been the second-largest consumer of aluminium, petroleum and lead and has won a bronze in the consumption of nickel. The most crucial (although all are needed) are iron ore, steel, coal and petroleum. The Chinese government needs to ensure it has access to all of these.

To meet these ever increasingly demands, China has reached out the hand of prosperity, trade and “peaceful development” to countries that are often deemed too volatile to trade with. Indeed, most trade that does deal with these countries often comes with “strings” attached as part of either a World Bank development project or an IMF Poverty Reduction Scheme. China requires none of these strings and the local governments rightly jump at the chance to benefit. Due to this, China has been observed to extend the trading hand to countries such as Gabon, West Guinea, Angola, Mongolia, Peru, Algeria, Iraq, DR Congo…the list goes on.

What this builds is a picture of country that is determined to continue its impressive rate of growth and attain the level of raw-material intensity that establishes “developed” infrastructure. At what risk though? Already it can be seen that this veracious appetite is blind to some painful realities. For example, political climates for international investment are often dangerous (Iraq); the cost of developing those resources is often seen to increase (eg. West Guinea); and the viability of these projects depends on the international joint ventures that bring with them their own host of problems (eg. MCC versus Cape Lambert Resources).

But what other, less-risky choice can China make? Its domestic resources are rapidly running out and the domestic industry (especially in steel-making) is often too fragmented to be cost-effective. In which case, international resources provide the cheapest and best solution – the price to pay is risk. 

But the potential rewards are immense: China is able to achieve its development goals today and preserves its own resources for the future. This has caused some controversy such as the Indian ban on iron ore exports but that is to be expected: China is constraining other countries’ future growth. I doubt that there is any credibility in arguing that China will exercise this “resource power” in the future when other nations are eager to grow but it’s interesting to contemplate.

Whilst speculation on the future political motives of China is fascinating, it is more productive to examine just how crucial these resources are to the nation. In a time of government supported economic growth, rising inflation and a currency under-fire, the government is under pressure to maintain the support of the people. Certainly most of the eastern provinces have come to feel used to the modern infrastructure and impressive projects (which offer jobs) that I referred to earlier. This is a perception that is progressively percolating into the central and western provinces. If this impressive infrastructure halted its advance and literally crumbled, there would be over 1.4 billion disenchanted people to contend with – a sentiment that the world saw boil over in 1989’s Tiananmen ‘disagreement’.

It is not sensible to warn of another Tiananmen Square incident at this stage. This example just serves to highlight the possible ramifications that could come attached to a scenario of rapidly deteriorating growth. This growth does rely on the raw materials that provide the real economy with infrastructure projects, jobs, improved business interactions, efficiency and technology. This growth and prosperity is at the core of the CCP’s mission: “to get rich is glorious” after all.

In order to provide this, China must engage in risky joint ventures and expensive international exploration so as to ensure that the materials for this growth are secured. It is probable that China will do this in ever-increasing volumes and frequency as the steel mills and power plants continue to cry out for more.

Google has recently renewed his ICP licence and government officials acknowledged the legality of Google’s tricky strategy for its survival in China.

Don't be evil. Get an ICP.

What is an ICP licence? Officially, it is some sort of census-system adopted by the Ministry of Information Techology in China to make sure that every single Website hosted in the People’s Republic can be traced back to a physical or juridical person (or a figurehead). Think about what happened to publications and newspapers during the nazifascist period in many parts of Europe, but with the involvement of digital technologies and lots of content in Mandarin. In fact, the ICP licence is a number that must be placed at the footer of any site’s homepage.

There are two different ICP licences: commercial and non-commercial licences. Of course, like everything else in the PRC, hybrid and special licences can be negotiated ad-hoc, according to the applicants’ and the state’s needs. Hey, this is China, and there’s no clear rule of law yet. Contracts are merely pieces of papers. Google for example got his ICP renewed, and it is allowed to operate only for its core search functions, Gmail, and its advertisement products. For example,

• Google Docs and its enterprise incarnations are still blocked.
• Blogspot is blocked.
• Google Maps/Earth could soon encounter some problems, since new Chinese regulations regarding on-line mapping systems came into effect, particularly if such applications allow the submission and inclusion of user-generated maps. As a result, Foursquare got locked out.

Everybody can easily obtain an ICP, allegedly. More often, the entire process is as shady as every other similar procedure in China. Especially if you are a foreigner individual or company, and operate in such as delicate industry such as knowledge (publishing, search engines, and anything related of which you might think of). And particularly if you want to do business with Chinese individuals: if you run an on-line business and need to emit a fapiao (invoice), then there’s no escape from the ICP. Just like what happened to Google.

How do you get an ICP?

1. You apply online through the official website. And wait.
2. You wait. Sometimes a lot.
3. After a while, you are asked to pay a certain sum of money, and wait.
4. If you personally know somebody who’s somehow connected to the government (could also be a “legit” Web agency), add extra money to the point above. Go back to point 1, and subtract some waiting time from 1 to 3.
5. You are lucky! You just got your ICP number, but mind you: you have to pay additional hidden fees and produce disclaimers, plus contracts stating that your Website doesn’t provide “unhealthy content” (what is that?) and that you are basically not conspiring against the state.
6. Skip all the above points if you know somebody influential in your level of governance or “constituency”. Licences are assigned at the provincial and local level, so its issuance indirectly helps one of China’s national sports and its many fans: rent-seeking by hungry government officials.

A post on Mashable hints that Google basically sold out to the Communist state, and abandoned its initial adamant stance against censorship while sniffing a potentially bigger slice of the ever-growing Chinese Internet market. Fair enough. Google is not evil but it’s also in China for the cold cold cash, not for charity. At least it didn’t help the Chinese authorities to jail some dissidents, like Yahoo! did some time ago.

The reality is that Google is functional to China’s development, and the state has a more or less direct interest in keeping Big G in China. At the moment, even though it controls only a relatively small slice of the Chinese search market (some say 30%, other say less), Google is fundamental to the Chinese on-line ecosystem and economy.

Besides the obvious global and diplomatic backlash caused by the global public opinion waking up and hearing from the radio or some RSS feed that Google essentially became outlawed in China…

• How many Chinese companies could reach the foreign audience with such ease and swiftness, without the help of AdWords? And I am not talking about the spamful wholesale suppliers of cheap fake drugs for helping middle-aged men rediscover their youth again (in bed). I am talking about all these local companies who target long-tail niches, and eventually need a Simplified Mandarin interface (and payment / invoice system) for conducting their advertising campaigns on search results pages.
• How many foreign companies in China (let them be WFOEs or joint ventures) would be able to operate at full-efficiency levels without the familiar helping hand from Google – which provides a solid search engine and widely adopted enterprise solutions? Let’s not forget that 2.5% of China’s GDP comes from Foreign Direct Investment, and that FDI is on the rise while already accounting for almost 50% of the Chinese output in the service sector, crucial for the overall modernisation of China.
• Last but not least: how many foreigners in China (a group expected to be growing exponentially) would feel comfortable being forced to use the functions offered by Baidu (besides the pirate MP3 search, constantly grilled by the majors), with Google being obliterated from the Chinese Internet?

Let’s think about what has been expressed in this post before jumping to the conclusion that Google forgot to be a “good company” and bent over censorship, the Chinese government, and the institutionalised lack of free speech in the biggest country of the world. China’s more clever than Google and its expansion plans for the Chinese Internet. And Google must be free to operate in China until Baidu will steal its very last bit of technology and starts marketing it at half the price. This is China, baby.

Streams of ink have been poured on the subject by scholars from all around the world. Since antiquity, Chinese culture has been very unwelcoming for patients with mental disorders. The common belief, particularly widespread in backwards regions of the country, is that mental illness is contagious or caused by some sort of “spiritual revenge” instigated by disgruntled ancestors whose memory has not been honoured according to Confucian rituals. The mentally impaired person and his extended family become instantly marked by the community as “jinxed” or “possessed”. This condition pushes them to the fringes of society – the alternative is keeping the secret from the community, which further complicates the wellness of those suffering from mental predicament, in addition to slimming down any chance of recovery or proper care. Indifference, avoidance, and even collective violence is what awaits mental patients in many parts of China. The underlying fear is that mental illness, if not properly avoided or pushed away, could spread as a wildfire in a forest, thus endagering social order.

Variants of this deep-seated belief in a metaphysical origin of mental predicaments is widespread in many cultures, as it blends very well with a mystical and unscientific worldview. The issue of mental illness is carefully dodged by mainstream media and the semi-invisible safety network provided by the state is not ready to deal with it, counting on an inefficient and insufficient number of medical specialists due to the same cultural peculiarities making mental illness in China exactly what it is.

One interesting  aspect of mental health in China is that, since China’s “modernisation” imposed by Western powers in colonial times, and through the civil war culminated with the Communist Party victory, mental illness has become a proper biopower device for social control: an instrument for eliminating political adversaries and pushing “public enemies” (and their families) down a feared spiral of silence. The sheer nature of mental illness serves power groups and their need for an arbitrarily diagnosable “stigma”, and this is why most of communist China’s detractors and adversaries have been swiftly and numerously labelled as “crazies” who need to be evicted from society.

So cute: how to refuse some free accommodation offered by the welcoming Chinese judiciary?

Every problem has a solution and the relatively few Chinese who are aware of the very existence of Internet censorship usually decide to study or relocate abroad – I am just being sarcastic here. There are easier alternatives and many Chinese know them. If you are a guest of this glorious multifaceted nation and come from a country in which, unlike China, you cannot get arrested if you carry pornographic photos on your mobile phone, then you might need to bypass the Great Firewall - the friendly and cool nickname of this nationwide deep-packet inspection censorship system.

Here are some tips and tricks for dealing with this wonderful technological innovation brought to you by the PRC. Most of these solutions have been tested for you. We have selected a good variety of paid and free alternatives. Free is always good, because nobody should really deserve to be spending money for reading some random banter on an equally random Blogspot blog, which is one of the first social Web services to get entirely locked out of China. Please remember that, due to the very fluid and volatile nature of things here in the PRC, the following links may be already censored by the time you are reading this.

The free options are manifold and usually at your fingertips: sometimes it just takes a rapid Google search with the right keywords, at least when that imperialist and venomous search engine the Big G is not blocked because its shaky ICP licence didn’t get renewed by some capricious government agency.

Notice: When you are using proxies (not HTTP proxies, but downloadable programs) please be aware that you could be sending sensitive data to unknown recipients. A proxy acts as a gateway between you and the Internet (and all the relative information you send), so smarten up: whenever you need to check your Internet banking account, please do yourself a favour and use a “regular” Internet connection.

• The Formidable Turkish KTunnel
  KTunnel is your friend whenever you need to take a quick peek at someone’s blog on the wrong side of the Web, the free side. KTunnel is a simple and effective HTTP proxy: it means that you need to feed him with a Web address and it immediately takes you to your destination. Works perfectly most of the time, although it won’t be enough for you to browse complex sites with lots of widgets and funky features.

• HTTP Proxy Galore: Glypse
  Glypse is a huge collection of free HTTP proxies – more than 5,000 – from all around the world. It acts as a “guide” to all these proxies, in the sense that you will be able to select the most appropriate (and fastest) from a list of graded alternatives. Green options are better, red are obviously worse, and all of them are frequently updated.

• The Swift UltraSurf
  UltraSurf has been expressly engineered to be a “service immune to the national Internet censorship in China” and it has been allegedly developed in the Silicon Valley by “scientists”, i.e. the CIA. It comes in two flavours: a Firefox plug-in and a downloadable software for Windows. Download it, start it up, and sit back: it’s time to enjoy some porn.
  
  
• Freegate, the Chinese Compatriots’ Choice
  Freegate is another nifty Windows utility crafted by some folks who are fighting for freedom of expression on the Internet. As their Website suggests they are obviously well oiled by the American taxpayers. For some strange reasons it is very popular amongst Hong Kong citizens stuck in the PRC and Taiwanese “compatriots”, as they are usually called by law-abiding state workers at border checkpoints, ministerial offices, and so on. Download the software, install it, and you’re ready to breeze. It comes in different languages and has some cool add-ons, such as a Firefox plug-in and an “emergency edition” with STunnel (a safer version of Freegate), just in case the Chinese governments goes suddenly Rambo.

• Hotspot Shield and its Ad-Supported Freedom
  Hotspot Shield used to be one of the most reliable software for “free navigation” behind firewalls of any kind. It is relatively fast even though it has experienced some problems in the recent past, at least here in China. It is free to download, although it forces you to display some frankly annoying pop-up banners every now and then. My advice is to use this ware just as a last resort among the various free options. For Windows systems.

• Mr. Zhang Crosses The Wall, the Home-grown Chinese Solution
  Mr. Zhang was introduced to me by a Chinese friend, and apparently it is quite popular amongst the locals. It is a downloadable software for Windows. It works best with Internet Explorer and needs a bit of tweaking and computer skills for its installation (a guide is available on the download Website, don’t fret). I don’t really trust it, it looks a bit shoddy.

• Puff the Magic Dragon, The Made in China Free/Paid Proxy
  Puff is very similar to Mr. Zhang, as a testimony to the proverbial Chinese innovative spirit. Another favourite amongst Chinese friends, it is only available for Windows and offers a UK and a USA gateway for you to use. The free version comes with some sort of obscure limitations, while the paid version (which you can purchase via PayPal) seems a bit faster and nothing else.

Now we finally know what happened to Segway!What ya gonna do when they come for you? Run!

Paid alternatives include various VPN (acronym for Virtual Private Network) solutions based on L2TP, OpenVPN technologies, or high-quality proxies.  They are usually much more reliable than free alternatives, faster, and more secure. I personally prefer OpenVPN-based options. Paid escape routes from the grasp of Chinese censorship usually come in enough flavours to make everybody happy: Windows, Mac, and even some mobile phone users.

• StrongVPN
  StrongVPN is my personal favourite. Fast, rock-steady, and relatively cheap. It uses OpenVPN and its on-line support is absolutely blissful: 24hrs a day, these guys are ready to help you out – even through remote desktop! Available for most platforms.
  
  
• Freedur
  Freedur is a popular proxy/VPN in China. It is fast, very easy to use (plug and play, practically) and reliable. Indicated to people who want a “sure shot” solution which doesn’t need any tinkering or computer skills.
• Witopia.net
  Witopia.net is the most affordable OpenVPN solutions available on the market. It has many, many gateways for you to select, so that one day you can watch BBC iPlayer even though you’re not in Britain. Very useful, although sometimes slow and unstable.

Disclosure notice: We are simple and curious Internet users, and haven’t received any special treat or hongbao (the famous Chinese red envelopes filled with money, an all-time favourite) by any of the services reviewed in this post.

• The Coca Cola advert/song “Wavin’ Flag“, which became an instant hit in most countries of the world and has been constantly played by every radio and TV of the planet for the last month (along with “Waka waka” by Shakira).
• The poor performance of the Italian team.
• The utterly appalling performance of the Italian team.

The song used in this World Cup’s Coca Cola advertisement is the highlight of a grand marketing campaign, as the Atlanta-based company reminds us, and a true global success for the producers of the most recognisable formerly cocaine-based soft drink. So much global that the song got translated in many other languages: 18 localisations, according to Wikipedia, including a version in Mongolian and Nepalese.

Jane Zhang is pretty hot

Here is the Chinese version of Wavin’ Flag

Here is the English version of Wavin’ Flag

And of course there is a Mandarin Chinese version of the song titled “旗开得胜” (Raise your flag). This bilingual edition, thoroughly and evenly aired on most of China’s national TV stations,  features some bits of the English version sung by K’naan and original lyrics sung by the local pop-idol Jane Zhang (a promising rising star born out of the Chinese singing contest Super Girl) and the renowned Hong Kong singer Jacky Cheung.

The Mandarin lyrics are very different from the English ones: it seems that the state-censors had eliminated any semantic reference to freedom, self-empowerment, and liberation that the original lyrics clearly try to convey. Specifically, the Mandarin version is an extremely cheesy copy of the original song. Here are the lyrics in my very rough translation:

Original English lyrics:

Give me freedom, give me fire,
Give me reason, take me higher

See the champions, take the field now,
you define us,
make us feel proud
In the streets our heads are lifting, as we lose our inhibition,
Celebration, it surround us, every nations, all around us

Singing forever young, singing songs underneath that sun
Lets rejoice in the beautiful game,
And together at the end of the day.
We all say

When I get older I will be stronger
They’ll call me freedom, just like a wavin’ flag
When I get older I will be stronger
They’ll call me freedom, just like a wavin’ flag
So wave your flag, now wave your flag, now wave your flag

Oooohhh, Oooooooooh wooooohh, Oooooooooh wooooohh

Harmonised Chinese lyrics:

The long hand of state censorship strikes again and I cannot but giggle when I think about these advertisement executives who had to cope with some censor’s requests: “Please, eliminate every mention of freedom, for the sake of our unified and harmonious country… You know, there’s only one China, so why don’t we sparkle the lyrics with some nice keywords from this list provided by the party… you know… the harmonious society and scientific development theory…”.

To be honest, the two songs sound completely different and not because of obvious linguistic reasons. The message is not the same, and the Chinese version tries to convey it by using the official propaganda discourse. If you spend five minutes coding the lyrics and doing some content analysis, elements such as the “one China” discourse, and the dream (i.e. the Chinese “socialist” planned development and the forecasted “harmonious growth” of the PRC) easily emerge. Think about the audience as well: millions of Chinese watching this year’s hottest event (the Shanghai Expo? Who cares…).

Although I am not entirely sure that the censors were this much sophisticated, it is clear that the core message of freedom embedded in the “unofficial” song for the South African World Cup has been harmonised for the Chinese audience. Once again, “freedom” is a much dreaded concept that cannot reach the wider population through the state-controlled media. My take is that the audience is considered unable to even hear the word “freedom” from a TV commercial, as it had been framed in such a way that it seems to be a strongly reclaimed value, all around the world (I picture a random Chinese person saying “Hey! This African guy is saying freedom! Something I don’t understand… What is freedom? I never got told in school…”).

Well done China, your censorship system is cleverly amazing.

You check in, get hurriedly prescribed some medicines (“do you have a cold? you need an IV drip“) and buy them at extortionate prices, since insurance doesn’t cover the entire costs of your medical bills. If you are Chinese, you can save some money only if you are lucky enough to have the right combination of hukou and coverage – possibly provided by your employer. And then… get all these good meds into your system through IV drips, the nation’s favourite delivery system – or better, the hospital managers’ choice to keep the cash flowing in.

It’s fairly easy to see the business advantages of IV drips and widespread overmedicalisation practices (quick diagnosis, quick prescription, quick drug delivery – almost no nationwide programmes of preventive medicine):

• It keeps you going back to the hospital
  Why take pills if you have an infection and need antibiotics? It’s not as lucrative as being forced to come back to your favourite clinic for a watered-down cocktail administered intravenously.
• It is easy to sophisticate
  Try changing the ingredients of a pill and maintain its original shape. If you can get through the obvious packaging-related problems, good luck. Much easier if it’s just a matter of watering down some liquid cocktail.
• Creates jobs for the nation
  Selling a pack of Ciprofloxacin takes one person. Setting up a waiting room (even a makeshift one), plus accommodating the patients, cleaning the facilities… requires a greater headcount.  Useful for the armies of unemployed nurse school graduates, which means getting some extra money from government agencies.
• Matches cultural expectations
  Chinese people are very fond of expert systems. Their entire culture has been based on expert systems for centuries.  Since the times of the national examination for Imperial officials, the fulcrum of Chinese society has been founded on a truly oligarchic structure. Handing over the “curative power” to the individual, by empowering them with “get-cured-as-you-go” tabs and pills, conflicts with the social need to rely on “expert” doctors and medics.

All in all, visiting a Chinese hospital is a great ethnographic experience (if you’re there for anything not too serious, of course). What do you think? Have you ever visited one? What are your impressions?

Economics is confidently built on the basic laws of supply and demand. The logic is that the more people want of something, the more expensive it becomes to purchase as the market seeks to allocate what little supply there is to the people who want it most – those that pay the best price. The market then effectively works as an auction that sees poorer consumers pushed out of the market. Many of China’s markets work this way now due to increased liberalisation. Indeed its operation is freely observable in markets such as milk and pork; as the average Chinese income increases, demand for different goods rises and so do their prices.

There is one particular area however that seems to defy the rule and which arguably proves it: this is in the energy sector. By 2030, the International Energy Agency (IEA) predicts that 85% of the world’s energy will come from burning fossil fuels. This seems to illustrate an increase in demand that cannot be met by an increase in supply – the supply of fossil fuels is finite after all. It follows that the price will progressively rise even given technological increase, new discoveries and the employ of new, more expensive extraction methods.

Yet, as an essential for most daily household activities as well as key business functions, it needs to be made universally available. Already the world’s dependence on energy makes the law unlikely to be obeyed. Indeed, Chinese initiatives seek deliberately to remove these market forces and to disobey the cornerstone-law of an economy. When combined with the fact that most commonly used fossil fuels will have been consumed by 2070, its disobedience also defies most other economic rationale.

Whilst China is not alone in distorting these market forces, it is a particularly poignant case given the extent of its demand. China alone burns one third of the world’s present known and realised fossil fuel supply. Its economy, now hailed as the second largest in the world, is 70% dependent on coal and China’s infrastructure is having a hard enough time curbing rises in that percentage to properly adapt to greener options that are now available.

Instead, China is intent upon seeking out the untapped fossil fuels in the world before other countries buy them up before them. This can be seen in China’s diligent work to broker business relationships in Sudan and other oil-rich African states. It also can be seen in China’s reluctance to engage in a more politically tough stance with Iran which supplies 15% of China’s oil, even at the risk of US discontent.

China has also invested in new and innovative techniques for converting raw materials into energy and providing it to Chinese citizens. Remarkably, the dominant coal companies (eg. Shenhua Coal), churn out 15% of China’s domestically sourced coal: that’s over 525 million tonnes. Transporting coal from thousands of mines to the thousands of supplied power stations is no mean feat and has required extensive investment in railway carts, coal trucks and their respective routes. Not only does this consume energy to create energy (inexorably wasteful), it also requires use of metals, excavation and environmental degradation.

Most of these problems are present in all industrialised countries around the world; the reason why it is so crucial to discuss in China’s case is because the size of China’s demand distorts the market for these types of raw materials around the world.  Furthermore, China is taking steps to help reduce the impact by making its power stations more efficient. This overcomes some of the wastage but the subsidies that Beijing employs to keep its citizens warm make the supply struggle to reach demand and encourages people to waste cheap energy in their homes.

An academic study into the plausibility of subsidies on coal showed that the Chinese government has traditionally paid one-quarter of the nation’s coal bill. This keeps well over 100 million people happy because they can afford to pay electricity: both the people and therefore the government are happy. This means that more coal is continuously demanded, more is consumed (both domestic and imported supply) and therefore the environment bears a bigger cost and is unhappy.

Professor Xu Kuangdi however points out that this is just a necessary stage in the development of a nation. Typically, a country will understandably have to improve energy and economic activity to improve living standards before being able to afford the technological skill needed to transform into a green economy:

Its mean to be that after the turning point, the environment is able to improve because efforts can be turned towards repairing it and technology can  be used to help lessen the effects of on-going industry. Whether or not China can afford the typical process-path is uncertain, contentious and certainly alarming. Professor Xu Kuangdi seems to advocate a compromise path whereby China bypasses the turning point and instead “tunnels” across from somewhere in the middle of the upswing but this requires China to modernise its economy in a far better style than any other country has managed so far; superbly if it is to keep the per-capita carbon-income ratio as low as it is at the moment (3.9 CO₂ emissions in tons per person).

This suggests that China needs to act now. It needs to invest in Green technology now, improve efficiency now and reduced dependence on coal now. That’s easier said than done. It relies on importation of efficient technology; the progression of the economy from the “factory of the world” to a service economy; and greater governmental tolerance of environmental groups and initiatives. It also requires the reduction or abolishment of coal-subsidies to improve efficiency in the steel industry (for example) and simultaneously save the government a tonne of money that it can pump back into improving its power-mix.

China Coal Projection