Post No. 39b: And So You Thought That America Only Had to Worry About China's Ability to Make Things

Article of Interest from the New York Times:

August 31, 2008

Op-Ed Columnist

Postcard From South China

By THOMAS L. FRIEDMAN
Guangzhou, China

I had the pleasure the other day of visiting the delightfully named Zhuhai Guohua Wonderful Wind Power Exploitation Co. in Zhuhai, on the southern coast of China. It’s a good news/bad news story.

The good news was that the Chinese engineers showed me their control room, which has a giant glass window that looks out onto their 21 wind turbines that crown the peaks of a nearby mountain. “How nice,” I thought. “China’s really starting to go green.”

But as my eye drifted just to the left of that mountain, I saw Macau, with its rising skyline of casino skyscrapers. The Venetian Hotel in Macau alone has some 870 gaming tables and 3,400 slot machines. So, I did a quick calculation and figured that those 21 wind turbines together might power the Venetian’s army of one-armed bandits for a few hours of green gambling.

That dichotomy runs through a lot of what is going on here in Guangdong Province, where 30 years ago China began its economic opening. You’re starting to see the emergence of Chinese clean-tech companies — I also visited a solar panel start-up — and real environmental awareness among officials and students. But the momentum of this region’s growth, the sheer land-of-the-giants scale of the buildings, makes the renewable energy here literally a drop in the bucket.

As a result, there is a dawning awareness that if China is to break its own addiction to oil, it will take a much more fundamental shift from the growth model that powered its first 30 years.

That model was based on two linked ideas: 1) energy was inexhaustible, inexpensive and benign; and 2) China could count on raising its living standards by forever being the world’s low-cost manufacturing workshop, based on cheap energy.

In recent years, though, fossil-fuel energy has become expensive, exhaustible and toxic, and rising wages — to some extent because of rising environmental considerations and social security requirements — have meant that the workshops of southern China are no longer the low-cost producers in Asia. Vietnam and Western China now beckon.

The only way forward, say officials, is for China to gradually develop a cleaner, knowledge-based, service/finance economy. It has to move from “made in China” to “designed in China” to “imagined in China.”

In short, the economy here has to become greener and smarter. (Sound familiar?)

In 1992, China’s coastal economic powerhouses hit a similar wall when they found they could not grow further without the government loosening travel restrictions to attract workers from all over China. So, more personal freedom to move around China was unleashed then. Now, these same provinces need to allow more “mind movement” to get to the next level.

The problem for the ruling Communist Party is this: China can’t have a greener society without empowering citizens to become watchdogs and allowing them to sue local businesses and governments that pollute, and it can’t have a more knowledge-intensive innovation society without a freer flow of information and experimentation.

What surprised me is how much the party is thinking about all this. I actually came here at the invitation of Wang Yang, the Communist Party secretary, i.e. the boss of Guangdong Province. He had read one of my books on globalization in Chinese.

Wang is also a member of the Politburo in Beijing and is considered one of the most innovative thinkers in China’s leadership today. He has been given room to experiment and has begun advocating something he calls “mind liberation” — primarily an effort to change the culture of his bureaucracy and open it up to new ways of thinking. Right now he is focused on trying to shift dirty, low-wage manufacturing out of Guangzhou to the countryside, where jobs are still scarce.

And he is trying to attract clean industries and services to the city. His goal, he said, was a more “low-carbon economy.”

“Please put it in your column that Party Secretary Wang Yang welcomes [Western] clean energy technology companies to come to Guangdong Province and use it as a laboratory to develop their products,” he told me. “We will be most willing to participate in the innovation and provide the services they need.”

So my postcard from Guangzhou would read like this: “Dear Mom and Dad, this place is so much more interesting than it looks from abroad. I met wind and solar companies eager for Western investment and Chinese college students who were organizing a boycott of an Indonesian paper company for despoiling their forest. An ‘Institute of Civil Society’ has quietly opened at the local Sun Yat-sen University. The Communist Party is trying to break the old mold without breaking its hold. It’s quite a drama. Can’t wait to come back next summer and see how they’re doing ...”

Post No. 21: The Solution to All of Our Fuel and Energy Issues

© 2008, The Institute for Applied Common Sense

If you haven’t picked up on it by now, we strongly believe that most of us are far too quick to judge and take rigid positions on issues, without really “digging deep” to truly understand the numerous and complex factors underlying most issues. Most people have a tendency to entertain those positions consistent with their own, and vigorously oppose those positions with which they disagree. Why regular folks have to take such hard positions, on so many subjects, has often puzzled us. This rigidity limits our creativity as a people, and further limits our ability to craft new solutions to problems.

People who manage, and people who run things, have to take positions and proceed to get things done. They can not sit around indefinitely gathering information, since time and resources are limited. However, the rest of us might better spend our time gathering information leading to us being better informed, and not just entertain information that supports our point of view. As a result, we might develop a more informed electorate capable of sifting through the spin, sound bites, disinformation, and cryptic commentary disseminated by our leaders, be they corporate, religious, educational, parental, media and entertainment related, or political.

If you haven’t picked up on it by now, the primary purpose of this blog is to stimulate thought, not to take a position. If we remove but one shackle from your mind, then we’ve accomplished our goal. More knowledge reduces that probability that one will be manipulated by those disseminating their particular message. More information makes the body politic more responsible in the selection of its leaders. We don’t care which position you ultimately take; we just want to encourage you to consider information from all sources, and not just two or three of them, but perhaps fifteen or twenty of them (at a minimum). We’re more concerned about the thought process of examining and weighing all of the competing considerations, since we firmly believe that society can then craft better solutions to problems, and perform its responsibility.

We are amongst the unsophisticated of our society, and thus believe that there are no simplistic solutions to our energy situation. However, we strongly believe that America must “do something.” We also suspect that the average American citizen does not have a decent appreciation of all of the various conflicting factors, particularly those scientific, engineering, and historical in nature, which might be considered in developing practical solutions. Earlier today, on C-Span2 Book TV, a presentation was made by Robert Zubrin (http://en.wikipedia.org/wiki/Robert_Zubrin), author of Energy Victory - Winning the War on Terror by Breaking Free of Oil (http://books.google.com/books?id=KysvGQAACAAJ&dq=%22energy+victory%22&ei=f0xmSLzEC4KejgGgk8T9BQ). For those of you, who like us, are confused about all of this energy discussion, you might try to catch his presentation the next time that it is aired (http://www.booktv.org/schedule.aspx), or consider the purchase of his book.

He discusses numerous factors, including, but not limited to, the following: (a) percentages of oil production by country at different points in time during the last century; (b) ethanol; (c) methanol; (d) various other alcohols; (e) costs associated with producing different types of fuels; (f) cost differentials associated with producing oil by the current major oil producers; (g) environmental issues associated with various fuels; (h) effects on crops; (i) effects on food supply; (j) various materials out of which fuels can be made and their relative costs; (k) the status of diesel; (l) the technological and engineering issues associated with automobile manufacturer re-tooling; (m) the energy, power, or miles per gallon produced per unit cost for different types of fuels; (m) the technological and economic status of hybrid vehicles; (n) flex-fuel vehicles; (o) the geo-political ramifications of oil being in the hands of authoritarian regimes; and perhaps most interesting, (p) his position that the Allies won WWII because they had access to, or controlled, oil, and destroyed the German synthetic oil production facilities. (He also tells the story of how the Japanese produced thousands of Zeros during the last year of the war, but did not have the fuel for them to intercept the bombers that dropped the atomic bombs.)

For our purposes, his presentation was about the most comprehensive discussion about this whole issue which one could have in a very short period of time. Additionally, he presented the information in a manner in which the average citizen could understand it. Although there is no in-depth discussion of every single factor (although Zubrin packs in a lot of information by speaking very rapidly and with great passion), he definitely makes one appreciate the big picture. No matter the side of the aisle on which you sit on any of these issues, we would suggest at least taking the time to examine his itemization of the issues. It is a thought-provoking analysis.

Oh, by the way, Zubrin founded a group devoted to the manned exploration and development of Mars.

© 2008, The Institute for Applied Common Sense