The China Vortex

Environmental experts paint a bleak picture of the future when the subject comes to global warming. Now, it turns out because of the rapid increase in energy needs in China, what were originally worst-case scenarios for global warming will now, almost surely, turn into best-case scenarios.

This is because many of the decisions for new power plants and energy have been pushed from Beijing down to the provincial levels, and simply put, the provinces have more incentive to produce more energy than to decrease carbon emissions. What was a bad situation becomes much worse, not just for China, but for the whole world. While the US has previously been the world’s worst emitter of hydrocarbons, China is on the path to replacing the US to become a hydrocarbon emitting country on a much grander scale, and in a league of its own. This will lead to much greater condemnation of China in the international press and also in China’s more vocal domestic arena of public opinion which uses the Internet as its main venue.

Richard Carson, a professor at the University of San Diego, is the leading expert on China’s carbon emissions, and he has co-authored a paper on his measurements and forecasts for carbon emissions based on his on-the-ground work in China. You can read about it here.

This week’s Economist has a lead article and section on “The New Colonialists” which covers China’s expansion and search for natural resources on a global scale.

For many Chinese, being equated with colonialism is a bad thing, because Chinese have historically seen themselves as victims of colonialism, having had Hong Kong taken away by the British, and the Unequal Treaties with the leading European powers in the 19th century. When the Chinese see themselves portrayed as new colonialists, they go into hedgehog mode, curling up and sometimes fighting back against their western critics who are criticized for not understanding or being sympathetic to the Chinese point of view.

This kind of attitude is not helpful for the western critics, and is not helpful for the Chinese. The issues are real, and they are too serious to be trivialized, and for people to get into nationalistic shouting matches. The effects are huge, as they will affect the overall health of the planet.

Over the past thirty years, China has adopted an open economic development policy to raise the standard of living of the Chinese people. This policy has been enormously successful, unleashing the traditional Chinese ethics of curiosity about technology, thriftiness and hard work to elevate their standard of living dramatically. Today, China has the second largest economy in the world, trailing only the US, which is now currently undergoing a dramatic readjustment following the growing subprime mortgage debacle.

The party has been forcefully pushing a policy of development, and more significantly, urbanization of China, and plans to move more and more Chinese into cities. Throughout its long history, China has traditionally been a country mostly made up of farmers, engineers and small business people. The plan is for many of the farmers to become cityslickers, eating at restaurants, taking subways, and working in office towers.

The trouble with having so many big cities is that they are huge consumers of energy, which is why China now has to go overseas to satisfy this huge demand. Securing energy resources also means getting entangled in the affairs of many countries which are frankly, not very well-run. This in turn means that the country’s foreign policy has to feed its energy needs.

This is how America’s foreign policy and domestic energy policy got so screwed up. In Washington DC and across the nation, there is a strong and influential pro-Israel lobby, while the country depends on many middle-eastern countries which are hostile to Israel for its energy needs. These contradictions are unresolvable, and have resulted in the rise of middle-eastern terrorism and eventually in the 9/11 attacks.

Seeing these problems, it would seem to make sense that the Chinese leadership would find a new model for China’s economic development which did not depend so much on an outdated 19th century European mercantilist model for economic development in the 21st century.

Sure, today it sounds like some kind of a joke.

But there are early signs that this may indeed be the case. After all, these are two huge issues which are, shall we say, pretty serious matters in China today? Yet there are early signs that point to China, or Chinese companies, possibly being able to take a lead in fixing some of the problems created by rampant development over the past thirty years.

Chinese companies have played a role in mapping out the human genome project, and have recently sequenced the first Asian genome in Shenzhen. Worldwide, 2007 has been a banner year in helping our understanding of the genome and how diseases are transmitted and/or inherited.

With its rapidly aging population, the Chinese government has a special incentive for taking care of its population and keeping them working well past retirement age. This is especially important for people with rare or special skills.

Everyone knows that the environmental situation is a mess because of massive overbuilding and inefficient industries which are manufacturing just to keep their doors open. As oil prices go up, the Chinese government has a special interest in developing new non-petroleum alternative energies which produce no or very few hydrocarbons, and do not affect the environment badly as some of the current technologies.

A few companies have already started to develop new products, but the market is still young.

On the government side, the Chinese government is already taking an active role in cleanup, as evidenced by its plan to clean up Lake Tai. I believe that in the next 10 years the government will take steps to retire or roll back the Three Gorges Dam, as the project is already being openly criticized in government publications. Premier Wen Jiabao has been the main spokesman for environmental causes in the Chinese government, and he has personally staked his reputation on cleaning up the Chinese environment.

Since the Chinese government has put its reputation behind healthcare and the environment, my belief is that these two fields will become as important to this generation as computer hardware and software were for the previous generation. Many of the breakthroughs which are now occurring in these two fields have been made possible by IT breakthroughs.

Besides, the smart money is already going there…