Rail, Grid and Trade will strengthen connections as power balance shifts in Asia

China, India and ASEAN all will have in the range of 5-8% per year GDP growth from now to 2030. This means they will nearly double or more than double their economies.

India should surpass Japan’s GDP in terms of exchange rate GDP.
ASEAN (Indonesia, Thailand, Phillipines, Vietnam, Malaysia, Singapore, Brunei, Cambodia, Laos, Myanmar) may also surpass Japan’s GDP in terms of exchange rate GDP.

India, ASEAN, Japan and Korea will surpass the European Union in terms of GDP.

China should link with ASEAN with high speed rail around 2030

China’s Belt and Road Initiative (BRI) seeks to support the construction of more than 3000 kilometers of rail lines between China and Laos, Cambodia, Thailand, Malaysia, Singapore and Indonesia. Many of the projects have started to take shape. In August 2017, the Thai government approved $5.5 billion for the construction of a 252-kilometer line connecting Bangkok to its northeast border.

China and Indonesia agreed to the terms on the building of a high-speed rail link between Jakarta and Indonesia’s fourth largest city, Bandung. Major progress has been made at 22 key construction sites. Issues related to the project’s licensing and financing have been gradually resolved and land acquisition work has made breakthroughs. China Railway Corp (CRC), the world’s largest railway operator is building the railway based on China’s railway technological standards.

Singapore and Malaysia were expected to announce a Kuala Lumpur (KL)-Singapore high-speed railway (HSR). Construction of the high-speed rail link between Malaysia and Singapore will be postponed for two years rather than cancelled, the two governments said in September. The start of construction work on the project to May 31, 2020. Previously the project had been slated to open to the public in 2026. It will now begin operating in 2031. The 350 km-long HSR line will cut off the travel time from Malaysia to Singapore from 4 hours drive to just 90 minutes in a train travel.

China State Grid connecting electricity across Asia

State Grid has signed a deal with Korea Electric Power, Japan’s Softbank, and Russian power company Rosseti to collaborate on the development of a Northeast Asian supergrid connecting those nations and Mongolia.

Feasibility studies show that grid connections between Mongolia, China, Korea, and Japan, as well as a route between Russia and Japan, are both technically and economically feasible.

China could place coal or nuclear power generation in the Gobi desert and then transmit the power to Korea, Japan and the coastal areas of China. Natural gas power could be generated by Russia in Siberia and transmitted to other countries in Asia. Massive solar and wind farms could also be built in Mongolia and Siberia.

Less than half of the ultra-high-voltage lines built or planned to date in China are intended to transmit electricity from renewable sources, according to a late-2017.

State Grid’s main target markets are in poor countries where fossil-fuel plants dominate and Chinese companies are busy building hundreds of new coal plants. So there’s little reason to expect that any ultra-high-voltage lines built there would primarily carry energy from renewable sources anytime soon.

ASEAN

With a projected annual growth rate of over 5% a year, ASEAN is forecasted to overtake the EU and Japan to become the 4th largest economy in the world by 2050, behind China, India, and the US.

This growth is supported by favorable demographics. Approximately 60% of ASEAN’s population is under the age of 35, and 43% under age 24. ASEAN also has the world’s 3rd largest labor force, trailing only China and India. ASEAN’s middle class is expected to more than double in size from 135 million (24% of ASEAN’s population) in 2015 to 334 million (51% of the population) in 2030. In 2012 ASEAN crossed the threshold of having over 50% of its population living in urban areas.


China’s top trading partners in 2017

Trade with ASEAN, Japan, Korea and India

ASEAN is already China’s third largest trading partner. Bilateral trade between China and ASEAN economies reached $232.64 billion in the first five months this year, up by 18.9% year-on-year. In 2017, trade hit a record high of $514.8 billion.

China business remains the key lifeline to the Japanese economy, where net exports contributed exactly one-third of Japan’s economic growth since the beginning of 2017. China is Japan’s second-largest trade partner, while Japan is among China’s top five largest partners. Statistics from China’s Ministry of Commerce showed that in 2017, bilateral goods trade rose 9.9 percent to 297.28 billion U.S. dollars, reversing a downward trend since 2012. Chinese exports to Japan increased 5 percent to 164.42 billion dollars in 2017, while imports from Japan grew at a faster rate of 16.7 percent to 132.86 billion dollars, resulting in a smaller surplus of 31.57 billion dollars, down 26.1 percent from the 2016 level.

South Korea exported $177 billion to China in 2017. Korea imported $98 billion from China. China is South Korea’s largest trading partner.

India and China had $84 billion in trade in 2017 and have set a goal of $100 billion by 2020.

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