Tales From The Beijing Embassy

China - not only toys, but tokamaks too.

China – not only toys, but tokamaks too.

Four cables from Cathay, courtesy of this excellent Cable Search tool.

The first cable (Cable 1) is one of the last dispatches of Ambassador to the PRC Clark T. Randt, a long, analytical piece from January 2009. But it’s also perhaps the least interesting of the four.  This is because it is only a rehashing of the standard narrative that can be found on most editorials on the subject: the post-Mao economic liberalization; fast industrial expansion; pollution and demographic problems; etc. China’s prospects are underestimated, as I’ve argued in the past. For instance, he cites projections that China will overtake Japan in five years years and “could rival the United States in overall scale” by the late 2030’s. But these are surely very, very pollyannish (from the US perspective) since in actuality China overtook Japan this year (2010) and its real GDP is already 70% of America’s.

The real threat to Chinese – AND global – growth prospects are resource constraints. Surprisingly, perhaps, for a US government official, Randt cites estimates having China reach peak oil in the early 2010’s and peak coal “in the next 15 to 25 years” (I think coal production will plateau as early as 2015). However, these shortages will be partly mitigated by huge alternative programs – he cites China as being the world’s largest producer of renewable power and Cable 3 mentions plans to construct 70 new nuclear power plants in the next decade. He is almost certainly wrong in his optimistic ideas that China will buy into the US global order, rather than seeking to remake it in its own images (as all aspiring hegemons try to do). To take an example, the wish that China will make itself into a “reliable partner” for the US and other donor countries is put into question by Cable 4 from the very same embassy, in which a Kenyan ambassador expresses an African preference for Chinese aid over Western “conferences and seminars”. The cable finishes with some platitudes about the US needing to “push for the expansion of individual freedoms, respect for the rule of law and the establishment of a truly free and independent judiciary and press”, which must surely have the publisher of this cable spinning in his British prison cell.

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The Century without an Indian Summer

How will the global South fare in our likely future of energy shortages, climate change and resource nationalism (and wars)? India has China’s population mass, but lacks its industrial dynamism and human capital. Africa has Russia’s energy and mineral wealth, but not the military power or social coherence to defend it. South America’s prospects appear brighter – it at least may have the crucial degree of strategic isolation, industrial infrastructure and energy and agricultural wealth to eke out a comfortable (if not luxurious) existence in the turbulent times ahead. In the next few posts, I will assess the future prospects of these three regions in the post-peak oil world, starting with India.

A 2007 Goldman Sachs report estimated India’s GDP growth potential at about 8% until 2020, reinforcing the hype of recent years over “India shining” and the vigorous IT industry springing up in oases like Bangalore. This may well be realistic, even despite India’s manifold social problems (low human capital, creaky infrastructure, caste-based inequalities, an unwieldy bureaucracy, sluggish courts, etc), under a global “business-as-usual” scenario. That however is highly unlikely, for the hard numbers suggest that India will be economically and geopolitically squeezed out of the resources it needs to prosper or even survive by its massive eastern neighbor, China. There are limits to growth on our planet and no guarantees that they will be distributed fairly or equitably in the coming age of scarcity industrialism.

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