China, the world's biggest emitter of greenhouse gases, plans to cut its CO2 emissions per unit of GDP by 40-45 percent from 2005 levels by 2020.
Over the past few years China has phased out thousands of old, inefficient factories and fossil fuel-fired power plants while becoming the world's biggest producer of renewable energy.
However, greenhouse gas emissions continue to rise, and according to a recent report, China's carbon output grew by 800 million tonnes to 9.7 billion last year, or 29 percent of the world's total CO2 emissions.
2. Business Week / Xinhua - China connected 50.26 gigawatts of wind-generated capacity to the nation’s largest electricity grid as of this year, the official Xinhua News Agency said, citing a statement from China State Grid Corp.
Growth in the on-grid wind power capacity was up 87 percent annually over the last six years, Xinhua reported, citing the larger of China’s two transmission operators. Grid-linked capacity will rise to 100 gigawatts by 2015 and 200 gigawatts by 2020, according to the report published yesterday.
3. Telegraph UK - “China is now entering the 'danger zone’,” said Kiyohiko Nishimura, the Bank of Japan’s deputy-governor and an expert on asset booms.
The surge in Chinese home prices and loan growth over the past five years has surpassed extremes seen in Japan before the Nikkei bubble popped in 1990. Construction reached 12pc of GDP in China last year; it peaked in Japan at 10pc.
Mr Nishimura said credit and housing booms can remain “benign” so long as the workforce is young and growing. They turn “malign” once the ratio of working age people to dependents rolls over as it did in Japan.
China’s ratio will peak at around 2.7 over the next couple of years as the aging crunch arrives. It will then go into a sharp descent, compounded by the delayed effects of the one-child policy.
“Not every bubble-bust episode leads to a financial crisis. However, if a demographic change, a property price bubble and a steep increase in loans coincide, then a financial crisis seems more likely,” he said in Sydney at a conference on asset booms.
A report earlier this year by the World Bank and China’s Development Research Centre warned that the low-hanging fruit of state-driven industrialisation is largely exhausted.
They said a quarter of China’s state companies lose money and warned that the country will remain stuck in the “middle-income trap” unless it ditches the top-down policies of Deng Xiaoping. This model relied on cheap labour and imported technology. It cannot carry China any further.
The reformers agree but good intentions are fading as the downturn deepens. Those calling for another blitz of cheap credit to keep the old game going are gaining the upper hand.
The city of Chongquing this week unveiled a $240bn (£153bn) investment in electronics, car plants, petrochemicals and other industries over the next three years, equal to 150pc of its GDP. This follows vast spending proposals by Ningbo, Guangzhou, and Changsha, apparently with the blessing of state-run banks and the Politburo.
4. CNBC - Mark Mobius, Executive Chairman at Templeton Emerging Markets Group, says a very pessimistic view would put China’s GDP growth at 5 percent for the current year, which is still “five times more than the U.S.”
“They are not landing, they are continuing to fly and chances are growth would be better than that. It'd be more like 7 percent,” he said.
Faltering demand from China’s two biggest customers – the European Union and U.S. – caused Chinese exports to post just one percent growth in July from a year earlier, the poorest showing since January, when exports fell.
Despite the economic challenges facing China, Mobius thinks that the picture is still positive and he is continuing to buy Chinese stocks, regardless of daily shifts in sentiment.
“We continue to buy Chinese stocks, particularly consumer oriented stocks,” Mobius said. “Sentiment changes from day to day. Markets go down because people think that Europe is in trouble or U.S. has got a problem or China is slowing but the reality is that over the long term these economies will do very well.”
He favors consumer stocks because he believes there will be a consumer boom in China as workers’ wages increase at a 20 percent clip per year and the Chinese government works to boost domestic consumption’s share of GDP.
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