Electrification of China

Two missives on electrification and retail trading

Publishing note: Random Walk is going to experiment with a different publishing cadence over the next few weeks (more details forthcoming). I will endeavor to trade some frequency for depth, at least some of the time.

• China electrifies like no other

• another reason why China ‘made a deal’

• ‘is this gambling?’ the research habits of retail investors

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Electrification of China

The big news is some kind of tariff deal with China.

I’d say it seemed inevitable from the get-go (and declare myself the victor for “EVERYONE STAY CALM-ing”), but the truth is, it’s just a 90 day pause, and who knows what other details may emerge.

But since China is in the news, I found this rather striking (if somewhat hard to believe):

FT

China has gone increasingly electric, while the US and Europe (and the rest of the world) have basically flat-lined since ~2015.

The broader point of the very chart-driven FT article is how China made energy-dependence a relative non-thing with all its grid and renewable (and nuclear) investments.

China is on its way to becoming the world’s first “electrostate”, with a growing share of its energy coming from electricity and an economy increasingly driven by clean technologies. It offers China a strategic buffer from trade decoupling and rising geopolitical tensions with the US.

The country is not only rapidly advancing towards self-sufficiency in energy from secure domestic sources, but also wields vast power over the markets for the resources and materials that underpin technologies of the future.

“Nobody had been seriously worrying about energy security or supply chains for armaments and critical industries and food because everyone thought that went with the cold war,” says Andrew Gilholm, head of China analysis at consultancy Control Risks. “Meanwhile, China has been working on that for years.”

Yes, ok, China gets its food from LatAm, and its energy from the sun, and it doesn’t need anyone else’s help, thank you very much.

Maybe, could be.

I mean, declining producer prices in China may say otherwise, but who’s counting: