Chinese Economics Thread
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Does China have any plan to reorganise agriculture? Huge parts of China (and Taiwan and Japan) have the same problem, supposedly rural areas have so many people that all the agricultural land has been swallowed up by housing, leaving only tiny agricultural plots.
Mountaineous areas like Fujian and Guangdong are even worse, even with narrow alleys and multiple-storey houses there's still not enough room for residences.
Mountaineous areas like Fujian and Guangdong are even worse, even with narrow alleys and multiple-storey houses there's still not enough room for residences.
China needs to have a robust oil exploration industry. The US often uses its advantage in oil & gas drilling technology to sanction other countries. For example they did this in the Yamal LNG project where they sanctioned the Russians from using US drilling technology. The Russians had to develop their own gas pumping turbines and gas drilling tech. Even if it is not for their own use China needs this in order to sell it to countries like Iran or Venezuela which can then export their oil to China.
China has had a massive migration of people from rural areas into cities and is building lots and lots of secondary cities to both take the pressure off major cities and take people away from rural areas where services are a lot worse. I think the reorganization of agriculture is a matter of time. Just look at how Russia did it after the Ukrainian sanctions. They quickly built up their agribusiness sector by both funding their tractor and fertilizer industries, enacting quotas or barrier on foreign food products, and giving low interest rate loans to farmers and the food processing industry to improve their production. It took them less than a decade to go from a grain importer to a grain exporter.
Hendrik_2000
Lieutenant General
China was late in offshore prospecting compare to the west but they make more than make up in recent year. I did agree China actually does not lack oil reserve but the problem most of them are located in remote Tarim basin in Xinjiang. The oil field in the eastern seacoast like Daging and Shengli are getting old but remarkably still able to pump oil with enhanced recovery.
If you look historically it is remarkable what China did prior to WW II China must import all of her oil need and western expert said there is no oil bearing in China. But Chinese expert buck that assertion and found a new oil prospecting theory and they did find oil in Gansu province. Now it is harder and harder finding oil onshore and when they found it is sofar from the market and with attending high cost of transporting and building the infrastructure to bring it to market.
So offshore exploring is a must But it require high technology and only recently China master this technology. Offshore drilling is high tech imagine you drill 5 km deep and only allow 3 or 4 inch deviation meaning you have to maintain fix position with little tolerance, It is remarkable Journey from no oil pre WWII and now venturing into high tech offshore prospecting. Here is the historic oil find in Yumen oil field. It was critical back then as Japan blocked access to oil and oil is needed to run war effort. They did prevail build the refinery in a year or two. So looking back it is not first time china face do or die moment similar to semi embargo now
Geologist Sun Jianchu Thrice Investigates Yumen In the 1930s, a geologist from the Central Geological Survey, Sun Jianchu 孙健初 and his group went to Yumen three times to investigate oil, the first time in 1934 and 1935. He and Zhou Zongjun and others traveled to the moun-tainous region in the western part of Gansu and the northeastern part of Qinghai, but due to unrest, they could not penetrate it deeply.
The second time was in June 1937, when the preparatory office of the China Kerosene Exploration Company organized an expedition to the northwest that was led by Shi Youming 史悠明 and geologist Sun Jianchu; they were accompanied by two Americans, the noted geologist Dr. James Marvin Weller and the engineer Dr. Frederic A. Sutton. In October 1937, while traveling westward from Jiuquan, they found oil in Baiyang River 白杨河 in Yumen County and Shiyou River 石油河 in Laojunmiao 老君庙. During their voyage they saw three peasants skimming oil off the Shiyou River by the old temple to Taishang Laojun (the deified Laozi) south of Yumen (from which the name of the place, Laojunmiao, derives). After a detailed investigation, Weller and his team wrote, in their exploration report. In this district ... development costs will be very high, and if oil prospecting here is to be considered as strictly a business proposition, most careful consideration must be given to all of the factors involved in development, production, refining, and marketing aspects before a decision is made to proceed further.
If, on the other hand, the development of an oilfield in the northwest part of China is required for national defense, to be accomplished at any cost, the Shih Yu Ho [Shiyou River] anticline should certainly be drilled.... [E]ven with the utmost dispatch and the best of luck, it is likely that at least two years would be required to drill the first wells and install a small refinery.1On April 18 and 19, 1938, Weller and Sun Jianchu reported twice in Hankou to Weng Wenhao, who was then the Minister of Economic Affairs and the director of Central Geological Survey. Weller’s geological writings fully reflect the scientific spirit of a geologist seeking truth from facts, and he was generous in recognizing the contributions of Chinese geologists, like Sun Jianchu, who had done exploratory work before him.1 J. Marvin Weller, Caravan Across China: An American Geologist Explores the Northwest, 1937–1938, edited by Harriet Weller (San Francisco: March Hare Publishing, 1984), 235–36.
Overview on Deep Water Drilling
World Advanced Offshore Platform Sets out to Sea from China's Jiangsu
The world's most advanced semi-submersible heavy-lifting offshore platform left its berth in Nantong City, east China's Jiangsu Province, on Saturday afternoon, setting out to sea under the escort of eight maritime patrol boats.
China built her first offshore drilling platform 2 years ago and now in operation in LIngshui field off Haina
Live: World's largest semi-submersible oil and gas production platform sets off for South China Sea
2,539 views•Streamed live on Jan 16, 2021
Yumen Oil Province
Yumen Oil Province, known as the cradle of China's petroleum industry, is the first petroleum base in China and was put into operation as early as 1939.
In order to increase the ultimate oil recovery, through fine reservoir description and better understanding of residual oil distribution, CNPC puts this mature oilfield into redevelopment. Well patterns were rearranged in blocks including Laojunmian, Yaerxia and Baiyanghe to build new development patterns with vertical injectors and horizontal producers. Meanwhile, horizontal, directional, cluster and underbalanced wells were drilled to achieve maximum output and recovery.
Laojunmiao Oilfield
Laojunmiao Oilfield, the earliest oilfield discovered in China, lies in Jiuquan Basin in Gansu Province. In 1954, pilot waterflood was conducted in Laojunmiao Oilfield in Yumen. This is an important milestone in China's oilfield development history, and provides valuable experience for the long-term high and stable production of giant oilfields discovered subsequently, such as Daqing.Laojunmiao Oilfield has been developed for nearly 70 years, with low output at many of its oil wells. Complex underground water/oil dynamics and faulty well patterns made the reserves difficult to tap. In 2008, CNPC launched a pilot redevelopment test at the M Block to rearrange the well patterns based on dynamic analysis. In addition, monitoring of the distribution law of residual oil, horizontal drilling, directional drilling, and underbalanced drilling were employed. The rate of production decline at the block was brought under control and the daily oil output increased from 105 metric tons to 136 metric tons.
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China focuses on Africa energy as Belt and Road lending dries up
Chinese development banks have been supporting local projects during the coronavirus pandemic
Chinese overseas energy finance collapsed to its lowest level since 2008 last year, with its struggling Belt and Road ambitions in the sector relying more heavily on projects in African countries. More than half of China’s $4.6bn in overseas energy lending went to projects in Africa in 2020, data from Boston University’s Global Energy Finance database show. China’s policy banks funded a gas pipeline in Nigeria, which drove most of the more than $3bn of financing, and smaller projects in Lesotho, Rwanda and the Ivory Coast.
Overall overseas energy finance fell by 43 per cent compared with 2019 and remained far below its level in recent years. Elsewhere, China lent towards projects in Bangladesh, Serbia and Pakistan. The wider drop in activity, anticipated in part because of the impact of coronavirus, coincided with mounting challenges to China’s ambitious Belt and Road Initiative, which has since 2013 sought to build infrastructure across dozens of countries.
Lending from China’s policy banks, which are distinct from its state-backed commercial lenders and play a big role in financing official projects both within and outside of China, fell sharply last year.
“I think the story has changed very significantly [over recent years],” said Chen Long, a partner at Plenum in Beijing. “We don’t have a lot of outflows . . . and a lot of places don’t want Chinese capital,” though he suggested countries in Africa were still more receptive than other markets. Energy financing has always been a big part of the BRI, conceived by Xi Jinping, China’s president, as the “project of the century”. China has promised to spend about $1tn on building infrastructure in mainly developing countries around the world.
But in the past two years, Chinese lending to the BRI has slowed dramatically, analysts said. The country’s two big state development banks, the China Development Bank and the Export-Import Bank of China, have been obliged to support more projects at home, reducing their capacity to maintain a blistering pace of lending to BRI projects. During the coronavirus pandemic, they have helped boost activity on the Chinese mainland. A number of important BRI countries such as Venezuela, Ecuador and Pakistan, have also run into financial trouble, raising concern in Beijing over the financial sustainability of its largesse to the developing world.
Last year Zambia became the first African country to default on its debts during the pandemic. It has borrowed heavily from Chinese lenders and reached a deal in October to defer repayments to China Development Bank. China’s overseas lending to energy specifically has declined steadily over recent years. It provided $49bn of financing between 2017-20, compared with $73bn between 2013-2016. Lending to Africa made up 37 per cent of total lending in the former period, higher than its 21 per cent share of the total over 2013-16.
Chinese development banks have been supporting local projects during the coronavirus pandemic
Chinese overseas energy finance collapsed to its lowest level since 2008 last year, with its struggling Belt and Road ambitions in the sector relying more heavily on projects in African countries. More than half of China’s $4.6bn in overseas energy lending went to projects in Africa in 2020, data from Boston University’s Global Energy Finance database show. China’s policy banks funded a gas pipeline in Nigeria, which drove most of the more than $3bn of financing, and smaller projects in Lesotho, Rwanda and the Ivory Coast.
Overall overseas energy finance fell by 43 per cent compared with 2019 and remained far below its level in recent years. Elsewhere, China lent towards projects in Bangladesh, Serbia and Pakistan. The wider drop in activity, anticipated in part because of the impact of coronavirus, coincided with mounting challenges to China’s ambitious Belt and Road Initiative, which has since 2013 sought to build infrastructure across dozens of countries.
Lending from China’s policy banks, which are distinct from its state-backed commercial lenders and play a big role in financing official projects both within and outside of China, fell sharply last year.
“I think the story has changed very significantly [over recent years],” said Chen Long, a partner at Plenum in Beijing. “We don’t have a lot of outflows . . . and a lot of places don’t want Chinese capital,” though he suggested countries in Africa were still more receptive than other markets. Energy financing has always been a big part of the BRI, conceived by Xi Jinping, China’s president, as the “project of the century”. China has promised to spend about $1tn on building infrastructure in mainly developing countries around the world.
But in the past two years, Chinese lending to the BRI has slowed dramatically, analysts said. The country’s two big state development banks, the China Development Bank and the Export-Import Bank of China, have been obliged to support more projects at home, reducing their capacity to maintain a blistering pace of lending to BRI projects. During the coronavirus pandemic, they have helped boost activity on the Chinese mainland. A number of important BRI countries such as Venezuela, Ecuador and Pakistan, have also run into financial trouble, raising concern in Beijing over the financial sustainability of its largesse to the developing world.
Last year Zambia became the first African country to default on its debts during the pandemic. It has borrowed heavily from Chinese lenders and reached a deal in October to defer repayments to China Development Bank. China’s overseas lending to energy specifically has declined steadily over recent years. It provided $49bn of financing between 2017-20, compared with $73bn between 2013-2016. Lending to Africa made up 37 per cent of total lending in the former period, higher than its 21 per cent share of the total over 2013-16.
This has actually been one of my biggest complaints against the Chinese government. Instead of using China’s USD reserves to buy U.S debts or lend to developing countries with dubious capacity to repay, they should allow Chinese citizens to diversify their portfolio. People are more willing to consume when their investments are more diversified and hence more secure.
If you read the Macropolo.org forecast and the 14th FYP, it was clearly going to be more open and dynamic.
A more open China will also hinder any plans to de-couple or spark a regional conflict, all of which are foundations qualitative growth beyond the "middle income trap" (MIT should really be named USD interest rate induced investment/capital flight).
I feel like there needs to be a way for Chinese to invest in Chinese land like maybe getting a share of profits from the resources.
Chinese are getting wealthy and there needs to be better investment vehicles than real estate.
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