China Translated

Lately China’s sustainable development goals have been in the news again following the announcement of a sudden jump in energy intensity of production. China has been tracking this interesting metric – which is linked not only to energy use and carbon production but also to technological improvement and movement up the industrial value chain – for some time (warning: apparently nobody outside the relevant departments really understands how it is calculated) and it is said to be a particular focus of Premier Wen Jiabao. Energy intensity had steadily declined 14% from 2005 and was almost on target to meet the 2010 goal of a 20% reduction, but took a sudden 3% (annual) jump in the first quarter. Heavy industry, responding to the tremendous infrastructure push of last year’s stimulus package, is seen as the culprit. Following the news Premier Wen got all medieval, promising in widely published reports to take an “iron hand” on the issue.
For deeper analysis, see the excellent Green Leap Forward.

China’s top leadership has been increasingly visible on alternative energy, low carbon development, pollution control, climate change and other sustainability issues, and Wen seems to be making the energy efficiency target a line in the sand. I think we can safely assume that this is not because senior Chinese leaders are lying awake at night worrying about snail darters and burrowing owls, but because they see these issues as serious potential threats to continued economic development and social stability.

Last week, the Chinese Academy of Sciences published a report of a speech given by the Vice Director of the Chinese Institute of Engineering Du Xiangwan called, “After 2050 China Will Enter a Stage of Green, Low-Carbon Energy Development.” The speech was notable to me for its clear description of the importance of changing China’s current energy use – followed by a set of energy goals that can could perhaps be described as realistic: In his description of China’s energy mix in 2050, renewable energy, including hydropower, has taken a position as a major (but unquantified) component, but coal still occupies 35% to 40% of the total, natural gas has 10%, and nuclear has 15%.

Here’s the report’s description of the issue and China’s strategic approach:

Our Nation Must Move Towards Green, Low Carbon Energy Sources
The tasks of China’s sustainable development of an energy development strategy can be summed up as “scientific, green, low carbon energy strategies,” and can be further summarized as speeding up the transition of regulations and controls, strengthening the primacy of energy efficiency, implementing controls on total energy use, guaranteeing appropriate demand, optimizing a diverse structure, carrying out “green and low carbon,” leadership from science and technology, and a high efficiency economic system.

Proposing such a strategy stems from the challenges faced by China’s energy resources. Du Xiangwan said that China very quickly will become the world’s largest energy consumer. “If China’s energy consumption is maintained at an average growth rate of 8.9%, by 2020 China’s energy consumption will reach 7.9 billion standard tons of coal, which is half the world’s current energy consumption.”

He pointed out that this kind of economic development model would obviously run into very severe restrictions. To support society and the economy’s scientific development, it is necessary to put forth total consumption control standards for fossil fuels, and to plan for the overall speed, structure and consumption model of development. Furthermore, China’s current crude energy exploitation and use results in severe environmental problems.

“No matter how much climate change is disputed, China’s energy must move towards green and low carbon,” Du Xiangwan said.

The original speech is here.

Don Johnson is a senior economist with AECOM

Energy, Environment, Guest contributor, Industry, Statistics

Chongqing and the rest of central and western China is to the coast what China as a whole is to the rest of the world – cheaper and less developed, but moving faster. It feels like a different country sometimes, and this thought occurred to me last week just as our taxi maneuvered gingerly around a giant excavator fitted with a jackhammer, which was trying to break up the street as we were trying to drive on it. Our city taxi was on a search for a CNG station, which are relatively common in urban Chongqing but quite rare in the suburbs where we were. We were following a local taxi which had promised to lead us to the only local station, and so when he went around the excavator down a very unpromising-looking back street, so did we, literally darting past when the big arm pulled its drill back for another try. That might have happened in Shanghai ten years ago, but Shanghai is more first-world now, and you would expect to see traffic barriers and a flagger to wave vehicles through. Suburban Chongqing isn’t there yet.

CNG stands for “compressed natural gas,” and many vehicles in Chongqing run on it, not only most (if not all) buses and taxis, but also many others, including the black sedan that took me to the airport the day I left. They can also use gasoline, but gas is more expensive, so drivers will take some trouble to get CNG – I personally experienced several lengthy detours, and saw several long lines at CNG stations of mostly taxis that were willing to wait to get the cheaper fuel. As a gas, CNG takes up more space than gasoline, so taxis have to refuel several times a day, even though the tanks take up a good part of the trunk. On the other hand, CNG is much less polluting than gasoline, and in Chongqing’s famous smog this is a big plus.

However, it probably wasn’t the environmental benefits that originally pushed natural gas vehicle development, but fuel availability. Sichuan, which borders Chongqing and used to administer it, was the site of the world’s first industrial use of natural gas. Gas was found in sites that had salt springs and, as early as the Western Han dynasty (221 BC – 23 AD) was piped through bamboo tubes to fuel boilers that reduced the brine to obtain salt. Transport links to coastal China were weak until very recently, despite the city’s strategic river location, so development of vehicles that could use the locally available fuel was an obvious choice.

There are actually many places in the world that rely on CNG as a supplementary fuel to gasoline; China is only in 7th place by number of vehicles (Pakistan, Argentina and Brazil are the top three.) Many more use “autogas,” also referred to as liquefied petroleum gas (LPG,) which is a mix of butane and propane (the proportion varies by the season, for reasons known to chemists. Like CNG, it’s cheaper than gasoline, but it has fewer environmental benefits and is produced from petroleum.) There are attempts to promote CNG cars in the developed world, but these run into the problem we encountered in Chongqing – you have to find a place to fill them up. There is a chicken-and-egg problem common to all “new” automobile fuel schemes, including not only CNG but also electric and hydrogen: nobody wants to built a network of filling stations for cars that don’t exist, but nobody wants to buy a car they can’t fuel. Chongqing is hardly unique in having a second fuel infrastructure, but if you come from the United States, being in Chongqing is like visiting a future in which a large number of cars are not running on gasoline, and doing it semi-successfully. Only semi-, because while the fleet is large the infrastructure is still clearly lacking – CNG shortages played a role in a Chongqing taxi strike in late 2008, after which the government promised to increase supplies, but my anecdotal experiences show that problems remain. The private automobile market in Chongqing is booming, but it’s not likely that many of the new cars hitting the road will be CNG vehicles until you don’t have to spend so much time on the road just looking for a fillup.

- Don Johnson

Energy, Environment, Guest contributor, Infrastructure, Regional

In the first half of 2009, for the first time, China’s top 500 firms were more profitable than their US counterparts.  But as those profits were built on subsidized input prices, government set output prices, and monopoly control of the markets they occupy, is this anything to be proud of?

An article in the latest issue of Southern Weekend  argues that the strength of China’s state owned firms is in part an illusion created by the various subsidies and supports they benefit from.  What is more, the author points out, these subsidies and supports are paid for by consumers and tax payers.  If China’s firms are amongst the most profitable in the world, this is in part because China’s consumers and tax payers are paying an unfair price.

This is my translation of the main points from the article, which starts with a discussion of health reform in the US, and the monopoly power of the giant US health care providers:

‘In the Chinese economy, electricity, oil and energy companies are like the US health care companies, they have the power to shape legislation, to determine prices, and to block the path of consumers to influence policy.  Sectors with 2 or 3 big firms can demand changes to pricing policy, subsidies, profits into perpetuity.

On the 5th September, new statistics showed that in the first half of 2009 the income of the top 500 Chinese companies was substantially less than the income of the top 500 US companies.  But net profit for the top 500 Chinese companies was already higher than for the top US companies.  The fact that income for Chinese companies is lower but profit is higher shows clearly that the operating environment for Chinese companies is more favourable than for their US counterparts.

But what really surprised people was that in China this year the price of energy (set by the government) was much higher than international prices.  That meant the prices for manufactured goods were also much higher (since manufacturers were paying more for their energy).  In the end this means that tax payers and consumers are paying a subsidy to state energy companies.

On the same day as the statistics were released, Li Rongrong of the State Owned Assets Supervision and Administration Commission (SASAC - the arm of the government which oversees its interest in the state owned enterprises) said: ‘today we are discussing the 500 strongest companies in China, but really we are discussing the 500 biggest companies in China.  Companies shouldn’t just be big, they also need to be strong.  If a company is strong but not big, it has no influence.  If a company is big but not strong, sooner or later it will collapse, and its collapse will have repercussions’

Li Rongrong also said that it does not matter if a company is state owned or privately owned, at its core a company will always pursue its own self interest.

These 500 companies are like the firms in the US financial sector, they are ‘too big to fail’.  They control the bulk of our country’s natural resources, they control prices faced by consumers, they face no real competitive pressures.  The first step to taking these state controlled companies into the market, must be to smash the control of key sectors by special interest groups, and ensure the prices in these sectors are set by the market.

In the US, reform of health insurance started under the Clinton administration and now has resumed under the Obama administration.  The reason for the delay is the power of industrial interests to deter the people from pursuing the public interest.  In China. facing the need to reform the state owned sector, we face a similar problem, and we must be vigilant that we do not go down the same route.’

You can see the original article here.

Competition, Energy, Industry

Polysilicon is the base product for both semiconductors and solar panels – it’s the sheet steel of the information age. Only a year or two ago, with solar power installations mushrooming around the world, polysilicon capacity seemed completely inadequate to supply both industries. Prices had gone from $40 per kilogram in 2003 to over $400, and material shortages were seen as a critical stumbling block for solar as it tried to become an established part of the world’s power mix. China was producing a majority of the world’s solar panels, but 95% of the necessary polysilicon had to be imported. State planners saw polysilicon as a key industry for strategic and environmental reasons, the high prices attracted investors, and money poured into new capacity.

But by the start of this year things had changed. The world economy had skidded off the road, many new solar projects had lost their funding, several key solar subsidies around the world had disappeared, and polysilicon prices had fallen a ledge-jumping 95% to $30 per kilogram. Meanwhile, Chinese polysilicon capacity was on a course to increase to 86,000 tons per year, as compared to 500 tons per year in 2006 – an increase of 172 times. And the rest of the world has been adding capacity too.

State planners are now looking for ways to limit the damage. The State Council announced on August 26 that it plans additional scrutiny and guidance for China’s polysilicon industry, including “resolving the problems of overcapacity and additional construction.” On August 31, the National Development and Reform Commission, China’s chief economic planner and an arm of the State Council, removed polysilicon (as well as wind turbine manufacturing equipment) from the list of encouraged imports.

Meanwhile, at the beginning of the month imports of scrap polysilicon, which competes in the solar industry with virgin polysilicon, were banned. However, the ban came not from economic planners but rather from the ministry of Environmental Protection, citing the dangerous chemicals used in its processing. The effect of the ban, and even its enforcement, is somewhat disputed, but scrap polysilicon represents something between 10% and 30% of the market for solar power, so it will definitely help domestic virgin polysilicon producers. This is where the questions start, because virgin polysilicon production also involves toxic chemicals – as indeed do many of the industrial processes in which China has established a dominant position. Last year the Washington Post ran a horrific and widely circulated story about one Henan polysilicon producer’s dumping of silicon tetrachloride, in which it was pointed out that not installing the closed-circle reprocessing equipment that eliminates the toxic waste can reduce production costs by 50% or more. Given the context of the other economic interventions in the polysilicon industry, and the ongoing environmental crises in polysilicon and in other industries (most recently the lead poisoning of children in Hunan, Shaanxi and Kunming,) it’s hard to take the Environmental Protection Ministry’s ban at face value.

There is a good side to the collapse in polysilicon prices, even for China – Caijing reports a recent tender for a 10 MW solar project in Gansu province surprised government developers by coming in at $1.09 per kilowatt/hour, when the previous subsidy price had been $4 – and this was after pushing out a bid that was so low the government thought it would stifle the industry. At that price solar power is still more expensive than coal or even wind, but it’s within striking distance.

Other Sources:
Ministry of Commerce announcement
China’s Solar Energy Industry: Polysilicon 2007-2011
China Retracts Blessing for Clean Tech Imports
Confusion Reigns over China’s Polysilicon Import Policy”

- Don Johnson

Competition, Energy, Environment, Guest contributor, Industry, Trade

As part of preparations for writing an article on the forthcoming US-China Strategic & Economic Dialogue I spoke to one of the leading US experts on China’s environmental issues, Elizabeth Economy.  She was kind enough to agree that I could reproduce the whole interview here.

Chinatranslated: In your discussion of China’s participation in the framework negotiation on climate change (published in The Making of Chinese Foreign and Security Policy) you characterised the Chinese position in 1998 as reflecting the same set of interests as in the early 1990s: the need for developed countries to take action first; continued technology transfer from developed countries under favourable terms; and no commitments or timetables for emissions reductions. 

More than 10 years on, what has changed?  What would need to happen for China to take a more proactive stance?
 
Elizabeth Economy: There has been virtually no change in the Chinese negotiating stance on climate change in over 25 years: the Chinese will play if the world will pay. That is why the Clean Development Mechanism is such a hit in China.

Beyond that, however, much has changed. On the downside, in the late 1990s, the world thought China would double its coal consumption during 2000-2020; instead it doubled its coal use by 2007 from 2000, making it the largest emitter of CO2 in the world. In the late 1990s, the greatest challenge China posed to climate change in terms of deforestation was within its own borders. Today, China is the largest importer of illegally logged timber in the world, contributing to serious deforestation throughout Southeast Asia and Africa in particular.

On the upside, China has a far more extensive climate change bureaucracy in place to manage both the technical and political aspects of climate change, it is ratcheting up the role of renewables in its energy mix, and it is taking steps to reduce energy intensity in significant sectors of the economy.
 
For China to adopt a more aggressive climate change policy will require someone within China’s leadership to champion the issue. What former Premier Zhu Rongji did for China’s accession to the WTO—in essence saying that there will be serious short term pain for long term gain—someone needs to do in China in the lead- up to Copenhagen. 
 
Chinatranslated: In your recent testimony before the Senate Foreign Relations committee you stressed the importance of building on and working with existing mechanisms, especially the Strategic Economic Dialogue.  What prominence do you expect climate change to have within the new Strategic & Economic Dialogue and is there a danger it will be lost in the middle of discussions of economic and security issues?
Your testimony also suggests various ways in which the US can exert positive pressure on China to step up its climate change strategy, including leading by example, listening to Chinese concerns, and focussing on urbanisation as a key issue.  What other sticks and carrots does the US and the world have to exert positive pressure on China on this issue?
What is the best outcome we can hope for on climate change from the first round of the Strategic and Economic Dialogue?

Elizabeth Economy: With the new U.S. administration, climate change has jumped to the top of the agenda, along with economic and security issues. Climate is, itself, an economic and security issue. I think initially, there was a seriously mistaken impression that working on climate change with China would be easy—somehow there had been a missed opportunity over the past eight years. I think the administration now realizes that climate is every bit as difficult an issue to negotiate as any trade or security issue. I don’t think the issue will get lost. I just don’t anticipate a true breakthrough.
In addition to working with China, the most significant potential leverage the United States could have would be to work with other developing nations to put pressure on China to do more. China considers itself a champion of the developing world. In many respects pressure from the small island states or African nations that will be devastated by climate change will do far more than more lectures from the US or EU.
What I would like to see is a progress report on the energy and climate-related initiatives the two countries began at the last SED. What’s working? What’s not? I am not a big believer in simply launching new initiatives for the sake of having something to announce.
I think the best we can hope for, in addition to announcements of various small scale joint efforts such as the new clean energy research centers, would be for the Chinese to indicate that they are prepared to continue with steep cuts in energy intensity and dramatic moves forward on renewables as far out as 2025. These are the types of initiatives they are excited about because they can be done within the context of continuing to grow their economy and enhancing energy security. Otherwise, I don’t expect much.

You can see more of Elizabeth Economy’s work at the Council for Foreign Relations website here.

China - Africa relations, Energy, Environment, US-China Relations

Following on from my post a few days ago on China’s falling electricity consumption, one reader has written to point out that whilst falling electricity consumption might indicate GDP contracting, total electricity consumption indicates that China’s total GDP is actually much higher than reported.

According to figures provided by the reader, total annual electricity consumption in China is 3.4trn KWH (in the US it is 3.8trn KWH), whilst total GDP in China is US$4.4trn (US GDP US$14.4trn).  The reader points out that electricity consumption suggests China’s economy is actually much closer in size to that of the US.

That’s certainly an interesting statistic and I agree that China’s total GDP (not GDP growth) is under-reported - I ran through some of the reasons for that in an earlier post.  But before concluding on the basis of electricity consumption that China’s GDP is four times as big as previously thought, two other points to consider:

First, China’s government-controlled low electricity price has encouraged an energy intensive development path, which means that industry has very high electricity demand.  For example there are an awful lot of aluminium smelters in China which are extremely energy intensive and only profitable because of cheap power.

Second, China’s population is four times the size of the US.  I’ve not looked into this but I suspect that the income elasticity of electricity demand (the amount your demand for electicity changes as your income changes) is quite low.  In particular, I suspect that the majority of Chinese households are already consuming much of the electricity they will consume through electric lights and household appliances and that changes in their income will only be reflected in a fractional increase in their electricity consumption.

So whilst very high electricity consumption is another piece of evidence suggesting that China’s total GDP is under-reported, I think it is difficult to estimate - based on electricity consumption - by how much it is under-reported.

Energy, GDP, Industry, Statistics

Electricity consumption is somewhat correlated with GDP growth.  The obvious reason is that if factories are producing things then they have lights on an machines whirring and if they are producing more things they have more lights on and more machines whirring.  China’s electricity consumption has been falling for the last 5 months.

Figures obtained by Caijing from the China Electricity Council suggest that in March of this year China’s electricity generation fell by 2.8% and electricity use fell by 2.19% year on year (and fell 4% in the first quarter as a whole).  Unless China has shifted overnight to a new energy efficient growth model, there’s a discrepancy between falling electricity consumption and rising GDP.

Equally, if GDP is rising that should mean more tax revenue for the government, as they collect a percentage of individuals wages and corporate profits.  China’s recent rapid growth has indeed flooded the coffers of the Ministry of Finance - resulting in a budget surplus in the first half of 2008.

Figures obtained by Caijing from the State Administration of Taxation however, suggest that the tax take for the first three months of this year has actually been falling.  Tax revenue for Jan and Feb was down 13% year on year.  Unless China’s tax collectors have become less diligent than the picture on their website suggests they are, there is also a discrepancy between falling tax revenue and a growing economy.

One explanation which springs to mind is that perhaps a substantial percentage of first quarter growth is from investment projects which have been accounted for but which have not yet started - therefore generating neither demand for electricity nor tax revenue.

Energy, Financial Crisis, Fiscal Policy, GDP, Statistics

February witnessed a Southern Hemisphere charm offensive from China.  Hu Jintao paid a trip to Saudi Arabia, Mali, Senegal, Tanzania, and Mauritius, saying in one address that ‘every time I come to Africa I feel like I am coming home’.  Xi Jinping visited Mexico, Jamaica, Columbia, Brazil and Venezuela。  Hui Liangyu meanwhile visited Ecuador, Barbados and the Bahamas.  For those unfamiliar with Hui Liangyu you can see a picture of him here.

Africa is an important source for China’s raw materials and Beijing has had some success at doing deals with ruling elites - generally involving some form of infrastructure for minerals swap.  It is also hoped that Africa’s middle income countries, like South Africa, will increasingly be a market for China’s middle technology products.

Between 2006 and 2008 the Chinese government invested $400m in Africa, catalysing investment of $2bn from Chinese companies.  On trade, total trade of $10bn in 2000 has risen to $106.8bn in 2008 (though there are concerns that China’s competitiveness is wiping out Africa’s nascent manufacturing industry).

Latin America is also an important source for China’s raw materials - oil from Venezuela and Ecuador and soy beans and iron ore from Brazil.  It is also already an important market for China’s goods, and joint ventures in Mexico and elsewhere have allowed Chinese firms to sell into the US market through NAFTA.

There was an attempt to set out an overarching strategy for engagement with the region in a paper published by the Chinese government in late 2008 which you can read in Chinese here.

What to make of this latest series of visits?  A review of articles in Caijing and Southern Weekend sheds a little light on the situation.

On Africa, Caijing notes that Hu Jintao has been to Africa six times as President.  Many have accused China of being interested only in Africa’s mineral wealth.  On this trip, however, Hu did not visit any resource rich countries.  What is more, China is only the third largest market for Africa’s oil exports, accounting for 12.5%, behind the US (31.8%) and EU (31.5%).

Instead, an expert from the Chinese Academy of Social Sciences argues, Hu’s trip was carefully designed to indicate the China has a holistic interest in Africa.  The trip included an island, an inland country, a country China had only just established relations with, and a country with whom they had enjoyed good relations for many years.

With debt forgiveness and infrastructure investment an important part of China’s relations with Africa, the Hu Jintao trip, coming at a time when Western countries might be backing away from their development work, is also intended to indicate that China is a reliable development partner. Apparently Hu used the visit to assure African countries that China would, on their behalf, urge developed countries not to forget their obligations.

The Southern Weekend article notes that Chinese leaders are also aiming to expand investment and market opportunities for Chinese firms - lining up behind the ‘defend eight’ policy (defend 8% GDP growth).

Demand from the US and the EU has already shrunk, the author notes, but the fear is that governments in the Washington and across Europe will be unable to withstand protectionist pressures.  China needs to build consensus for free trade, and keep national markets open, to ensure demand for its products and keep its export engine ticking over.

You can see the Southern Weekend article here.  The Caijing article has mysteriously disappeared from their website.

China - Africa relations, China - Latin America relations, Energy, Infrastructure

The credit crisis and the fall in oil prices have proved a double blow for energy suppliers - they face falling prices for their product and no credit to tide them over till prices rise.  In an article published today by the EIU’s Business China, I argue that for energy hungry China, this is an opportunity to pick up energy assets that were previously not on the market, shoring up supply for their energy intensive industrial sector.

The recent deal between Russia and China - a $25bn loan from China in return for 15m tonnes of crude oil a year for 20 years demonstrates the dynamics of the situation.

In the course of writing the story I interviewed Nick Pennell, the head of the energy practice at Booz & Company.  His view is that it is the independent oil companies whose price has fallen most steeply and who will be the most likely targets for aquisition by China’s National Oil Companies (NOCs).

I also interviewed Erica Downs of Brookings, who pointed out that concerns about a zero sum competition to tie up the world’s oil supplies are misplaced.  First, much of China’s overseas oil is pumped from assets overlooked by the oil majors.  Exploiting these assets means less of a drain on reserves in Saudi Arabia and elsewhere.  Second, much of the oil China pumps oversas is sold onto global markets rather than shipped home.  Oil from China’s wells in Ecuador, for example, is mainly sold to the US.

From this point of view, China’s NOCs’ overseas activities are contributing to global security of supply rather than syphoning off oil that would otherwise find its way to the West.  Incidentally, some of Erica’s very informative papers on China’s energy sector can be seen online here.

Finally, I interviewed David Fridley of the China Energy Group. He pointed out that the global economic slowdown had reduced energy demand with prices falling from a peak of $145/barrel in June 2008 to about $40/barrel today, but the credit crisis also means there is no investment in expanding supply.  That means that when demand kicks back in prices will go right back up to $100+ and oil suppliers will once again be in a sellers market.  From this point of view China’s NOCs have a rapidly closing window of opportunity to do as many deals as they can.

You can purchase the complete article from the EIU’s online store here.

Energy, Financial Crisis, Industry, US-China Relations

In the course of updating the EIU’s city guide to Tianjin I came across a few interesting facts and figures, many of them related to the port and airport.

On the port, it seems like there are serious plans to increase the capacity to import raw materials - especially iron ore and crude oil.  CNOOCs plans to manufacture deep sea mining equipment in the area also underlines the role of Tianjin in meeting China’s future energy needs.

On the airplanes, assembly of the Airbus A320 appears to have catalysed the region’s aviation industry with plans to develop an indigenous helicopter.  Meanwhile the local government has bought itself a share in an airline, hoping to make Tianjin a nexus point for flying businessmen.

Tianjin port signed an agreement with China Marine Bunker (a subsidiary of PetroChina) who will invest Rmb220m in the development of fresh water and oil docks at the port.  In another port development, Cosco (Hong Kong) are investing Rmb300m in a special dock to handle iron ore, aiming for handling capacity of 23m tonnes a year.  Sinpoec, meanwhile are teaming up with the port to develop a dock for the handling of crude oil, with plans for an annual handling capacity of 20m tonnes that would make it the biggest in China.

Staying with oil, CNOOC plan to locate their core production facility in Tianjin, with total investment of Rmb22bn.  CNOOC will locate management and research functions, and the manufacture of deep sea mining equipment in the facility.

On airplanes: Tianjin is the location for the assembly of the Airbus A320, apparently plans are on schedule, and the first plans will be ready for testing in May of this year.  In other aircraft related news, Aviation Industry Corporation of China and the Tianjin government agreed a joint investment in the Binhai New area to build helicopters - with plans to start with parts in 2009 and build complete helicopters by 2011.

Finally on the aircraft front, Tianjin government joined others in making a major investment in one of China’s crisis wracked airline companies - with a Rmb500m investment in Hainan airlines.  Unlike previous beneficiaries of government generosity Southern Air and Eastern Air, Hainan Air is a private company.  The government apparently wants them to make Tianjin the nexus of all their routes - making it easier for businesses to fly to the city.

If anyone is interested in seeing Tianjin’s 2008 economic report and plans for 2009 they can see it, in Chinese, here.

Energy, Industry, Infrastructure, Regional