Another marker appears on the long road to Chinese economic ascendancy. The Middle Kingdom is now even more of an energy hog than we are:
The IEA's estimates are probably more honest than data from the Chinese government. You can read this development in one of two ways. China's domestic coal reserves and push for mega-generation projects like the Three Gorges Dam are a foundation for huge future growth. Alternatively, they may be about to run smack into the limits of their ability to exploit their environment; rainwater runoff is flushing enough trash into the Yangtze River to clog the Three Gorges Dam. I'm willing to bet that China is so desperate to keep its development on track that it will spend money to solve the erosion and recycling problems it now faces. Plenty of new urbanites are underemployed,, or soon will be as the Chinese real estate bubble deflates. Maybe they'll be grateful for the chance to scoop detritus out of hydroelectric intakes for a dollar a day. China doesn't have the luxury of waiting a generation for a green revolution.
Full disclosure: Long FXI with covered calls and cash-covered short puts.
China's energy use has more than doubled over the last decade to overtake the United States as the word's biggest user, according to preliminary data from the International Energy Agency.
As the data from the IEA shows, China has gone from using 1,107 million tons of oil equivalent (Mtoe) in 2000, to 2,131 Mtoe in 2008 and is estimated to have consumed 2,265 Mtoe in 2009.
The IEA's estimates are probably more honest than data from the Chinese government. You can read this development in one of two ways. China's domestic coal reserves and push for mega-generation projects like the Three Gorges Dam are a foundation for huge future growth. Alternatively, they may be about to run smack into the limits of their ability to exploit their environment; rainwater runoff is flushing enough trash into the Yangtze River to clog the Three Gorges Dam. I'm willing to bet that China is so desperate to keep its development on track that it will spend money to solve the erosion and recycling problems it now faces. Plenty of new urbanites are underemployed,, or soon will be as the Chinese real estate bubble deflates. Maybe they'll be grateful for the chance to scoop detritus out of hydroelectric intakes for a dollar a day. China doesn't have the luxury of waiting a generation for a green revolution.
Full disclosure: Long FXI with covered calls and cash-covered short puts.