In that statement, he is recognizing the respect that is being given China in many circles in the US regarding its energy policies.  Yes, on the one hand we are very critical of the pollution that has run rampant in China, and we also are fearful of losing leadership in green/clean energy, but in-between those headlines is respect from opinion leaders in the US that China is proactively addressing its energy issues through clear policies and ample investment.

And in this case, I don’t think it is colored by a complaint that an autocratic government can act quickly and decisively.  I think it is more the recognition that special interests in the US sometimes keep us from making appropriate progress.  And just like the crisis of foreign energy dependence is a wake-up call for China, so was it for us during the OPEC crisis of the mid-1970s.  We just don’t have that crisis in the US right now.

EXCERPT:

The FT’s Lionel Barber, Edward Luce and Anna Fifield sat down with Steven Chu, the Nobel prize-winning physicist who became President Barack Obama’s energy secretary just over a year ago, in his office on February 16. This is an edited transcript of the interview.

FT: What are the prospects, post-Copenhagen, for an energy bill. What do you hope to have in as opposed to out? Is cap and trade now dead?

SC: The president even today, with the announcement of the nuclear loans was saying that we still would like very much a comprehensive energy bill which includes a cap on carbon and a trading scheme. I think it’s very important for a number of reasons to the United States. This is a situation where we feel that our national competitiveness is at stake. We can be a leader in developing a lot of the technologies around better efficiency and greener sources of energy or we can be a follower and buy these things. A large part of determining whether we’re a leader or a follower depends on our own internal national policies. If we have energy and climate legislation that tries to foster and lean towards an efficient energy economy and a greener energy economy, that would cause the investments in the United States that could lead to these technological innovations. The president and I feel very strongly that we need this consistent policy. It’s something which also has a demand for meaningful jobs in rebuilding our infrastructure so we retrofit or build new things that are very energy efficient. That’s a genuine demand for jobs, on the efficiency side but also as we retire old inefficient power plants and bring on newer and much more efficient power plants or anything in industry, that both positions us better competitively in the future and it creates a genuine need for jobs. So we see this as part of a necessary wealth creation and prosperity in the United States.

I personally think that this is a bipartisan, non-partisan issue. I think there are people on both sides of the aisle who recognize these things. I think what China has done in the last few years is also a little bit of a wake-up call. The fact that they’re now spending upscale $100bn a year on diversifying their energy, pushing energy efficiency, developing alternative forms of energy other than coal, closing their least efficient coal plants. There are 21 nuclear reactors being built in China today. They’re going to be the biggest installers of wind and solar domestically. They also see this as an opportunity. As you develop internal demand you nurture the industries that can also sell abroad. Their leadership recognises that if we continue on the course we’re on, it going to be devastating to China and the rest of the world. They also recognise that this is something which they missed the first industrial revolution, they missed in large part the computer and biotech revolutions. They don’t want to miss this one. That is again something that I think the United States and other countries should sit up and take notice of.

Among his key points:

• African governments prefer to deal with China who does not lecture them on political transparency or human rights.
• China does not impose arduous restrictions on aid.
• Memories in Africa are long, remembering back to the Cold War era where the West supported brutal dictators.
• Chinese aid to Africa is now believed to exceed World Bank assistance.
• The Democratic Republic of the Congo and its vast natural resources is the big prize for China in Africa.
• There are more Chinese embassies in Africa than any other nation.
• More Chinese citizens are believed to live in Africa than any other foreign country.
• Half the supermarkets in Lesotho are owned by Chinese merchants.
• There are more Chinese in Nigeria than there were Britons at the height of the British empire.
• China’s corrupt business culture meshes well with much of the culture of corruption in African business.
• Africa is now the number one transit point for Chinese counterfeit products going to the West.
• The effects of counterfeit Chinese pharmaceuticals across Africa will never be known.
• American presidents have been misguided in thinking that increased trade with China will lead to more freedom there.
• Chinese timber operators are decimating Mozambican forests.  Locals call it the “great Chinese take out.”
• China is now the world’s top consumer of timber and is looking to Africa as a new source of raw timber.
• Any African nation that accepts money from Beijing must sever ties with Taiwan.
• 1-2 million DR Congolese workers are “indentured” to Chinese mine owners earning $3 per day (“on a good day.”)
• China now obtains a 1/3 of its oil from Africa and Equatorial Guinea is central to their oil strategy in Africa.
• China is getting most of the new oil contracts at rates U.S. and other international companies cannot match.
• Africans and Chinese see Western hypocrisy in their talk of political reform while funneling World Bank money to dictators.

Looking across key topics of industrial pollution, energy production, and material consumption, Michael finds reasons to be optimistic because of the recent impact of certain environmental policies and a new generation of concerned citizens.

Eric counters with some hard-nosed reality regarding the barriers presented by China’s regulatory system and framework.  This led to a disucssion about the relationship Chinese citizens have with nature and how collective will can manifest in a society where the right to organize is not clear cut – to say the least.

Have a listen and tell us if you think we’re off base with our ranging commentary and how you see China’s environmental future.

CTP Podcast – China’s Environmental Future

I find it interesting that we commonly talk about the problem of Chinese materialism (often without looking at our own), but the real issue appears to stem from comfort:  water and space heating consumed 59% of residential energy use in 2000.

Excerpt from summary:

“Chinese residential energy consumption will more than double by 2020, from 6.6 EJ in 2000 to 15.9 EJ in 2020. This increase will be driven primarily by urbanization, in combination with increases in living standards. In the urban and higher income Chinese households of the future, most major appliances will be common, and heated and cooled areas will grow on average. These shifts will offset the relatively modest efficiency gains expected according to current government plans and policies already in place.”

The report goes on to call for even more aggressive conservation strategies, which may be adopted, but as vast as this topic is, it is only part of China’s energy picture.  Overall, I remain optimistic that China’s nuclear energy, wind power, solar cell, and electric automobile innovation will keep constrain problematic emission growth.

Here is an illuminating graph of historical emissions from a presentation by one of the report authors, Mark Levine:

Download the full text of China’s residential energy consumption assessment.

In this NY Times article, Jad Mouawad, reports on new data that show how clean energy efforts may impact broadly assumed trends about China’s future emissions.

Wind turbines in Xinjiang, China. An analysis by the International Energy Agency showed that China could slow the growth of its emissions at a much faster pace than is commonly assumed because of its huge investment in wind and nuclear energy.

via www.nytimes.com

CTP Podcast – China’s Resource Driven Diplomacy

At the end of our discussion we find ourselves focused on emerging deals in West Africa and South America as we ponder these talking points:

1) A new wave of multilingual world-savvy diplomats are taking up posts at key Chinese missions.  These individuals may present a much less insular face and can be an effective the tip of the spear for China’s moves to engender positive public response to future resource extraction deals.

2) These deals certainly have paperwork behind them, but we also feel that it is to China’s advantage that many developing countries in Africa are open to broadly defined deals that will evolve over the years they take to execute.  China will have to manage emerging public pressure from local populations that are seeking improvements in their social and physical infrastructure in exchange for access to resources.

3) The value of these deals are huge, but the media often fails to mention the profit sharing, and extraction costs when citing them.  The long term financial value of some deals aren’t especially clear, but they do represent great diplomatic and national security coups.

Have a listen and tell us what you think.

WASIT PROVINCE, Iraq — When China’s biggest oil company signed the first post-invasion oil field development contract in Iraq last year, the deal was seen as a test of Iraq’s willingness to open an industry that had previously prohibited foreign investment.

via www.nytimes.com

Today’s article in the New York Times about the new role China is playing in Iraqi oil politics is very similar to the challenge Beijing is facing in other parts of the developing world where it is scraping up as many raw materials as possible. Nowhere is this more evident than across Africa where China’s oil and mineral interests are now becoming vital to its overall foreign policy.  Just as in Iraq, though, China is struggling to come to grips with how to engage the local political class and interact with civilians.

Unlike Western Europeans and Americans, China is not burden with a colonial past that continues to be an important factor in African/Middle Eastern and Latin American international relations.  Indeed, the Chinese are playing by a whole new set of rules.  In Cameroon, for example, a close contact of mine recounted an interaction between a trans-national Chinese mining company and the local government regarding the purchase of a huge iron-ore mine in that country.  After the transaction was complete and the mine had been transferred to Chinese ownership, the local labor unions approached the Chinese mining management to negotiate a deal for contract workers.  Typically, if the purchasing company was European or American, the local Cameroonian labor leaders would likely have been very effective at playing off its colonial past to leverage a better deal with their new employers.  The Chinese, on the other hand, simply brushed these labor leaders aside, “we will not be requiring your labor, thank you for inquiring.”  Completely confused, the labor officials mistakingly thought the Chinese were simply negotiating for a better deal.  Two days later, though, they discovered the Chinese mining company was not joking, they would not in fact need any local labor.  At the capital airport in Yaounde, two Boeing 747 jets landed with 700 imported Chinese laborers sent to Cameroon to work in the mine.  For the Chinese, it would be far easier and, possibly, not that much more expensive to import labor teams from China than it would be to use local hires.  Today’s New York Times article (link above) reflects a similar strategy where the CNPC feels more comfortable relying on its own teams than working with locals.

Yet another example of China’s strategy for raw material extraction from the developing world can be seen in the Democratic Republic of the Congo.  There, the Chinese are learning from previous colonials who came to this broken country for the same mineral ambitions.  Unlike the Belgians or the British who were brutal in the colonialism, the Chinese are applying their own tribal traditions to negotiating with the Congolese.  Whereas Europeans simply built their colonial infrastructure to extract as much raw material wealth as possible, Beijing is actually investing in the local society by building roads, hospitals and other much needed infrastructure projects.  In all, China is investing 4 billion dollars in the DRC, and not just building roads to the mines and ports!  While this is no doubt building some good will, the four billion dollar investment should be placed in the larger context where Beijing is engineering deals to extract 60 billion dollars in minerals, oil and other natural resources from the Congo.

The BBC produced a fantastic 20 minute program on China’s role in both the Congo and in nearby Zambia that are a must see for anyone interested in learning more about Beijing’s new foreign policy in the developing world.

• Click here to watch the BBC program on China in the Congo
• Click here to watch the BBC program on China in Zambia