DAVID BUCKHAM: Enigma of geopolitics surrounding climate change
It is distressing to realise that China is about as energy efficient as SA, just on a scale 40 times larger
04 May 2024 - 06:00
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What is often missed in the 21st century grand imperial battle between China and the US is the question of energy efficiency in the creation of productivity, says the writer. Picture: REUTERS
On April 17, US President Joe Biden, in a bid to curry favour with Pennsylvania voters, called for a tripling of the tariff on imported Chinese steel. China produces about 1-billion tonnes of steel per year, propped up significantly by the state. That is eight times more steel than India, the second largest steel-producing nation in the world, and about 12 times more than the US.
That means China produces about 700kg of steel per capita each year, the weight of a small car, per person.
As China attempts to extricate itself from its property-value deathtrap downward spiral by attempting to radically boost its manufacturing export sector under its “survival of the fittest” mantra, it is over-supplying the world with ever-cheaper goods, earning the ire of US treasury secretary Janet Yellen and the World Trade Organisation, among others.
China’s nominal death rate is now higher than its nominal birth rate. Its one child policy has resulted in millions fewer workers per year at an accelerating rate, implying that any positive economic growth would have to be increasingly higher marginally per capita — at an increasing rate per year — than GDP growth. That is a challenging feat indeed.
All of this is in the face of a protracted erosion of personal wealth for the average Chinese citizen. For the two-year period from the third quarter of 2021 to the third quarter of 2023, real residential property prices have slumped 8.7%, across the entire country. On top of this, China has one of the highest total nonfinancial debt to GDP ratios of any major economy, at 311% of GDP.
A worker cuts steel plates inside a China Steel Corporation factory. Picture: REUTERS
It is staggering to note that between the beginning of 2023 and the beginning of 2024, Chinese steel exports increased 36%, while global iron ore prices have decreased 26% since the beginning of 2024. That presents the Chinese Communist Party with an unfortunate economic conundrum in which the only way out will be to double down and increase volumes even more.
However, in the great global geopolitical debate that can roughly be thought of as the battle for multipolarity over a Kantian-values driven unipolar world, and more specifically can be thought of as the desire to erode Western, especially US, hegemony, China will continue to state-sponsor manufacturing exports, promote alternative currencies, circumvent US sanctions and infiltrate UN infrastructure.
China will continue to state-sponsor manufacturing exports, promote alternative currencies, circumvent US sanctions and infiltrate UN infrastructure
What is often missed in this new 21st century grand imperial battle, especially when viewed through the lens of the ever-more-pressing fight against climate change with annual heat records surging and glaciers receding at worst-case scenario rates, is something quite basic — the question of energy efficiency in the creation of productivity.
SA consumes a total of 200-billion kilowatt hours (kWh) of energy per year and has a population of about 60-million people. The US consumes 4-trillion kWh and has a population of 340-million people. China consumes significantly more energy at close to 8-trillion kWh, but it also has a far larger population of about 1.4-billion people.
To make these enormous numbers more manageable, and assuming it takes about 100 watt-hours to boil 1l of water in an electric kettle, the average South African boils 4l of water per hour every hour, whereas the average Chinese citizen boils 7l and the average American boils 13l.
This concocted synthetic metric would suggest that at a global level energy transition to a cleaner world might be achieved if Americans were to be less energy consumptive, for example, by simply cutting meat from their diets for one day a week, which might substantially reduce carbon intensive agriculture.
China, with all of its apparent efficiency achieved through its single-party state communist rule, is roughly as efficient as we are
However, a different picture emerges when one looks at the following: US GDP stands at roughly $25-trillion, which means the US produces roughly $6 per kWh of energy used ($25-trillion GDP divided by 4-trillion kWh energy consumption). China, with a GDP of $18-trillion, produces about $2 per kWh. SA, with a GDP of $400bn, also produces $2 per kWh. Using this algebra, it is distressing to realise that China is about as energy efficient as SA, just on a scale 40 times larger.
That is, despite our failure of public infrastructure and all the politicisation and graft we have endured, China, with all of its apparent efficiency achieved through its single-party state communist rule, is roughly as efficient as we are. China is the largest carbon emitter in the world by far, though it continues to insist on being classified as a developing nation, which means it is not beholden to the same carbon emission targets as developed nations, and yet it is extremely inefficient.
This kind of economic inefficiency is often ignored in the virtue signalling events that take place under the hood of the UN Framework Convention on Climate Change and the continued hypocrisy, myopic vision and policy cherry-picking that is exhibited not only by the US and China, but by all other member states.
Given the increasingly alarming effects of climate change as it bears down on us, it surely makes no sense to continue relentlessly down this path of ignoring blatant economic truths in favour of playing along with grand global metanarratives.
• Buckham is founder and president of Johannesburg-based international management consultancy Monocle Solutions.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
DAVID BUCKHAM: Enigma of geopolitics surrounding climate change
It is distressing to realise that China is about as energy efficient as SA, just on a scale 40 times larger
On April 17, US President Joe Biden, in a bid to curry favour with Pennsylvania voters, called for a tripling of the tariff on imported Chinese steel. China produces about 1-billion tonnes of steel per year, propped up significantly by the state. That is eight times more steel than India, the second largest steel-producing nation in the world, and about 12 times more than the US.
That means China produces about 700kg of steel per capita each year, the weight of a small car, per person.
As China attempts to extricate itself from its property-value deathtrap downward spiral by attempting to radically boost its manufacturing export sector under its “survival of the fittest” mantra, it is over-supplying the world with ever-cheaper goods, earning the ire of US treasury secretary Janet Yellen and the World Trade Organisation, among others.
China’s nominal death rate is now higher than its nominal birth rate. Its one child policy has resulted in millions fewer workers per year at an accelerating rate, implying that any positive economic growth would have to be increasingly higher marginally per capita — at an increasing rate per year — than GDP growth. That is a challenging feat indeed.
All of this is in the face of a protracted erosion of personal wealth for the average Chinese citizen. For the two-year period from the third quarter of 2021 to the third quarter of 2023, real residential property prices have slumped 8.7%, across the entire country. On top of this, China has one of the highest total nonfinancial debt to GDP ratios of any major economy, at 311% of GDP.
It is staggering to note that between the beginning of 2023 and the beginning of 2024, Chinese steel exports increased 36%, while global iron ore prices have decreased 26% since the beginning of 2024. That presents the Chinese Communist Party with an unfortunate economic conundrum in which the only way out will be to double down and increase volumes even more.
However, in the great global geopolitical debate that can roughly be thought of as the battle for multipolarity over a Kantian-values driven unipolar world, and more specifically can be thought of as the desire to erode Western, especially US, hegemony, China will continue to state-sponsor manufacturing exports, promote alternative currencies, circumvent US sanctions and infiltrate UN infrastructure.
What is often missed in this new 21st century grand imperial battle, especially when viewed through the lens of the ever-more-pressing fight against climate change with annual heat records surging and glaciers receding at worst-case scenario rates, is something quite basic — the question of energy efficiency in the creation of productivity.
SA consumes a total of 200-billion kilowatt hours (kWh) of energy per year and has a population of about 60-million people. The US consumes 4-trillion kWh and has a population of 340-million people. China consumes significantly more energy at close to 8-trillion kWh, but it also has a far larger population of about 1.4-billion people.
To make these enormous numbers more manageable, and assuming it takes about 100 watt-hours to boil 1l of water in an electric kettle, the average South African boils 4l of water per hour every hour, whereas the average Chinese citizen boils 7l and the average American boils 13l.
This concocted synthetic metric would suggest that at a global level energy transition to a cleaner world might be achieved if Americans were to be less energy consumptive, for example, by simply cutting meat from their diets for one day a week, which might substantially reduce carbon intensive agriculture.
However, a different picture emerges when one looks at the following: US GDP stands at roughly $25-trillion, which means the US produces roughly $6 per kWh of energy used ($25-trillion GDP divided by 4-trillion kWh energy consumption). China, with a GDP of $18-trillion, produces about $2 per kWh. SA, with a GDP of $400bn, also produces $2 per kWh. Using this algebra, it is distressing to realise that China is about as energy efficient as SA, just on a scale 40 times larger.
That is, despite our failure of public infrastructure and all the politicisation and graft we have endured, China, with all of its apparent efficiency achieved through its single-party state communist rule, is roughly as efficient as we are. China is the largest carbon emitter in the world by far, though it continues to insist on being classified as a developing nation, which means it is not beholden to the same carbon emission targets as developed nations, and yet it is extremely inefficient.
This kind of economic inefficiency is often ignored in the virtue signalling events that take place under the hood of the UN Framework Convention on Climate Change and the continued hypocrisy, myopic vision and policy cherry-picking that is exhibited not only by the US and China, but by all other member states.
Given the increasingly alarming effects of climate change as it bears down on us, it surely makes no sense to continue relentlessly down this path of ignoring blatant economic truths in favour of playing along with grand global metanarratives.
• Buckham is founder and president of Johannesburg-based international management consultancy Monocle Solutions.
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