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.

23 thoughts on “Rail, Grid and Trade will strengthen connections as power balance shifts in Asia”

  1. I disagree. Russia will not send power to Japan. This is hocus pocus. Russia wants to sell more LNG to Japan. The hydro scheme is nonsense. The nearest Russian hydro plant to Japan is in Zeyskaya and the power is used locally.

    Mongolia selling power to China? lol. They need every Kw they can make, basically to run Rio’s mining ops. Sure, Chinese are all around them to finance windmills, but just look at the reality.

    You know why SoftBank is all over this? Son-san is a globalist and is using the ASG concept to tie up Asian countries so they would be more interconnected and interdependent. The ASG makes a lot of noise with little cost (just a few “studies”). The Chinese have more or less hijacked his idea and said “we’ll build it” as part of the BRI strategy. Problem-is, no one else is buying into it.

    Imagine if you turn the tables. Imagine if Japan builds humongous power gen systems to plug into the Chinese network and make China dependent on them. You think the Chinese will go for it? seriously dude.

    At the super-high level you can argue that electrification is cheaper if half the world is in on it. Sure, but why stop there? Why not link up the planet?

  2. So CKJ signed a MOU. Don’t mean a thing, MOUs in Asia is another word for face-saving. MOUs are cheap and no downside risk. China counts MOU’s like poker winnings. I have a whole drawer full of them.

    You see, Korea and Japan don’t need China, and Japan and Korea don’t need each other (in terms of power generation and transmission). Both Japan and Korea are perfectly ok building out power capacity on their own. They are also spending money today to build out that capacity (eg KOGAS’s build-out). Each country has their own energy mix, each has their own strategy, each have national champions, uses for power etc etc. Linking up the countries is just added cost when there is no need for it once you are capacitized.

    That is how power generation works.

    There is no incentive for Korea or Japan to link up power transmission. Zero.

  3. Where have you been lately, Brian?

    Mulitiple nations have woken up to the scam the Germans have done to Southern Europe that China is doing to them. Especially when the Chinese couldn’t help themselves but show their Ebenezer Scrooge said that makes Diaspora Chinese so ‘well loved’ in the rest of Asia when they clamped down on nations who could not pay.

    This is why Indonesia recently told Beijing to GTH on the latest round of projects the Chinese were trying to ‘sell’ there.

  4. I notice that there is never a down turn in the future for Asia. It is always up and to the right. Sigh. Anyone that buys that deserves what they get.

  5. China is realizing that the BRI fantasies need a heavy dose of reality. BRI is in the national strategy and Xi has staked his reputation on it, so you won’t find any differing views on that side. But you will with all the countries China wants to work with. Korea and Japan will NEVER build a NEA transmission grid together, and never with China. Energy security. The train lines are all hocus-pocus (from the China involvement side). China come with a bag of money but the loan conditions are all in their favor – basically “you want this port/road/train/pipeline financed? Great, but it’s ours and we own all rights and make all decisions”.

    China has vastly underestimated the animosity their “China First” policy creates with the surrounding countries. Myanmar got seriously burned on a pipeline project and has now basically thrown the Chinese out. Thailand wants nothing to do with them and only looks south and west. Japan and Korea? make me laugh. I spend a LOT of time in Asia and I’ve NEVER had anyone say they want to work with the Chinese. I’ve had a fair number of Chinese tell me they can’t work with other Asians.

    The other lesson learned so far is that China thinks they can simply duplicate their “operating model” elsewhere. That is, build a train line by confiscating land and bringing in the dozers. They really have no idea how to work in a totally different environment – which is why they insist on every project to do 100% of everything themselves. And we are back to the making enemies issue.

    BRI will be (is already) a colossal policy failure, and a very expensive one. The concept makes a ton of sense, but wrong promoter and wrong attitude.

  6. Where have you been lately, Brian? Mulitiple nations have woken up to the scam the Germans have done to Southern Europe that China is doing to them. Especially when the Chinese couldn’t help themselves but show their Ebenezer Scrooge said that makes Diaspora Chinese so ‘well loved’ in the rest of Asia when they clamped down on nations who could not pay.This is why Indonesia recently told Beijing to GTH on the latest round of projects the Chinese were trying to ‘sell’ there.

  7. China is realizing that the BRI fantasies need a heavy dose of reality. BRI is in the national strategy and Xi has staked his reputation on it, so you won’t find any differing views on that side. But you will with all the countries China wants to work with. Korea and Japan will NEVER build a NEA transmission grid together, and never with China. Energy security. The train lines are all hocus-pocus (from the China involvement side). China come with a bag of money but the loan conditions are all in their favor – basically “you want this port/road/train/pipeline financed? Great, but it’s ours and we own all rights and make all decisions”. China has vastly underestimated the animosity their “China First” policy creates with the surrounding countries. Myanmar got seriously burned on a pipeline project and has now basically thrown the Chinese out. Thailand wants nothing to do with them and only looks south and west. Japan and Korea? make me laugh. I spend a LOT of time in Asia and I’ve NEVER had anyone say they want to work with the Chinese. I’ve had a fair number of Chinese tell me they can’t work with other Asians. The other lesson learned so far is that China thinks they can simply duplicate their “operating model” elsewhere. That is, build a train line by confiscating land and bringing in the dozers. They really have no idea how to work in a totally different environment – which is why they insist on every project to do 100% of everything themselves. And we are back to the making enemies issue.BRI will be (is already) a colossal policy failure, and a very expensive one. The concept makes a ton of sense, but wrong promoter and wrong attitude.

  8. I notice that there is never a down turn in the future for Asia. It is always up and to the right. Sigh. Anyone that buys that deserves what they get.

  9. Seriously?? The globalist argument. Everyone I argue with a flat earther or climate change denier, they tell me that modern scientists are corrupt and paid off by globalists to fake data and studies. __________Regardless like I said before. Japan and Korea do not plan to depend on oversea energy. Quite the contrary. “A diverse and widely sourced mix of both renewable and nonrenewable energy sources connected by super grid could reduce the region’s risk of power outages; as experienced after the 2011 Fukushima Daiichi Nuclear Disaster, and 2011 South Korea blackout.” Hence the odds of having both domestic and distant oversea energy sources being down at the same time is just unlikely. So having a mix of energy sources can significantly reduce power outages as they are not largely dependant on either domestic or oversea energy source. __________As for mongolia, they are already predominately dependant on coal. Their wind power would be enough to meet the country’s renewable goals and still create a surplus for exports. Because the nature of wind power is that yes, they can be stored. But it loses alot of energy in storage and needs to be used ASAP. Solar and wind power generation. are not as FLEXIBLE as coal. So during the peak solar and wind energy, Mongolia can’t use it all. So it makes more economic sense to export the excess energy to China, Japan, Korea who actually could use it. Plus Mongolia’s total feasible wind and solar capacity could reach 1,200 GW. That is insane and can generate them a large amount of money. __________As for Russia, they have the world’s biggest hydroelectricity potential where vast majority is in the far East and siberia. But they have not even been developed and capitalised on as majority of Russian population had lived in the western side of Russia. Russia can make alot of serious money by capitalising on its far East hydroelectic renewable energy potential. Plus it’s renewable. And it would actually be a bonus for them to undercut America’s growing lpg exports to Japan anyways. __________The only thing I do agree with you is the politics. You can cut the tension of these rivalling countries with a knife. But the economics and technical feasibility however does makes alot of sense. Japan and Korea benefits from Cleaner, cheaper, more reliable energy and protects against the chances of nationwide outages if they have more than 1 major energy source to the national grid. Russia capitalises on its far East hydroelectic potential at last and make alot of money while also undermining America’s natural gas boom and lpg exports. China reduces coal burning by buying “excess” mongol solar and wind power. ____________If the super grid deal does not go through by 2050, which involves South East Asia, North East Asia, Russia, maybe even Pakistan. It would be because of politics. Cos the economics and technical feasibility works and makes alot if sense. And yes the studies do confirm it.

  10. I disagree. Russia will not send power to Japan. This is hocus pocus. Russia wants to sell more LNG to Japan. The hydro scheme is nonsense. The nearest Russian hydro plant to Japan is in Zeyskaya and the power is used locally. Mongolia selling power to China? lol. They need every Kw they can make, basically to run Rio’s mining ops. Sure, Chinese are all around them to finance windmills, but just look at the reality.You know why SoftBank is all over this? Son-san is a globalist and is using the ASG concept to tie up Asian countries so they would be more interconnected and interdependent. The ASG makes a lot of noise with little cost (just a few “studies”). The Chinese have more or less hijacked his idea and said “we’ll build it” as part of the BRI strategy. Problem-is, no one else is buying into it.Imagine if you turn the tables. Imagine if Japan builds humongous power gen systems to plug into the Chinese network and make China dependent on them. You think the Chinese will go for it? seriously dude. At the super-high level you can argue that electrification is cheaper if half the world is in on it. Sure, but why stop there? Why not link up the planet?

  11. First I never said it was a done deal. I just said there were both economic and environmental benefit. Russia, has vast hydropower capacity, and could send cheaper and cleaner electricity to Japan, a country that currently relies strongly on oversea LPG imports. Mongolia could supply low-cost wind power from the Gobi Desert to China, making its air cleaner and reducing dependence on burning smoggy coal.And it was Softbank that was enthusiastically pursuing this deal. They do plenty of business with the chinese already. You say there are no incentives. There are plenty of feasibility studies confirm there are solid economic benefits.And because Japan and Korea have their own gas and coal plants. All they really need is to add the transmission lines to the grid. That is all. Their existing plants would still run but at lower capacity in parallel. And can run at full capacity if the oversea power is shut down and they’ll still be fine. So security is not an issue as they are not dependant on it.The only issue that is major is political and negotiating the level of invested risk.In fact when I first heard of that project, my first opinion was that it would not work out as there is tension among those countries. But politics are motivated by economics and these countries already do business with each other. And in terms of incentives, ~ cleaner air, cheaper electricity, more reliable power , better integrated east Asia ~ Mongolia – Russian relations are solid incentives.

  12. So CKJ signed a MOU. Don’t mean a thing, MOUs in Asia is another word for face-saving. MOUs are cheap and no downside risk. China counts MOU’s like poker winnings. I have a whole drawer full of them. You see, Korea and Japan don’t need China, and Japan and Korea don’t need each other (in terms of power generation and transmission). Both Japan and Korea are perfectly ok building out power capacity on their own. They are also spending money today to build out that capacity (eg KOGAS’s build-out). Each country has their own energy mix, each has their own strategy, each have national champions, uses for power etc etc. Linking up the countries is just added cost when there is no need for it once you are capacitized.That is how power generation works. There is no incentive for Korea or Japan to link up power transmission. Zero.

  13. I disagree. Russia will not send power to Japan. This is hocus pocus. Russia wants to sell more LNG to Japan. The hydro scheme is nonsense. The nearest Russian hydro plant to Japan is in Zeyskaya and the power is used locally.

    Mongolia selling power to China? lol. They need every Kw they can make, basically to run Rio’s mining ops. Sure, Chinese are all around them to finance windmills, but just look at the reality.

    You know why SoftBank is all over this? Son-san is a globalist and is using the ASG concept to tie up Asian countries so they would be more interconnected and interdependent. The ASG makes a lot of noise with little cost (just a few “studies”). The Chinese have more or less hijacked his idea and said “we’ll build it” as part of the BRI strategy. Problem-is, no one else is buying into it.

    Imagine if you turn the tables. Imagine if Japan builds humongous power gen systems to plug into the Chinese network and make China dependent on them. You think the Chinese will go for it? seriously dude.

    At the super-high level you can argue that electrification is cheaper if half the world is in on it. Sure, but why stop there? Why not link up the planet?

  14. Plus the only time china would realistically turn it off is during outright war. If during peacetime, China has a contract with Korea and Japan, and deliberately turns the power off as one of their tantrums. The contract clauses would come back to bite china and it loses its power export business forever. Unless china actually wants to nuke its own golden egg, it is not likely they will do that. Cos Japan and Korea would have a backup plan of keeping their independent coal and lpg power plants, connected to their grid of course. Running additionally to china’s power exports. For their security.By doing so, they will save alot of money every year and their cities will be cleaner with less coal burned in their neighbourhood. They would be interested in that and why State Grid has already signed a deal with Korea Electric Power and Japan’s Softbank.

  15. Plus the only time china would realistically turn it off is during outright war. If during peacetime, China has a contract with Korea and Japan, and deliberately turns the power off as one of their tantrums. The contract clauses would come back to bite china and it loses its power export business forever. Unless china actually wants to nuke its own golden egg, it is not likely they will do that. Cos Japan and Korea would have a backup plan of keeping additional independent power plants, connected to their grid of course. For their security.

  16. Well apparently politics are motivated by economics. Japan is having a thaw in relations with China but in the past, Japan softback and Chinese firms have done alot of business together. Same with Korea and China.It would be silly for Japan and Korea to rely and depend purely on China for its energy. But it’s not. They both purchase alot of lpg and import it and burning it up to generate part of their annual power. They only need china’s electricity transmission line for Part of their country’s power use. It’s more supplementary and not the sole source of power. They are not going to turn off all the existing lpg and cial plants. Just purchase less lpg and coal whilst still using the plants but ADDITIONALLY enjoying exported power sent there via power line. If China turns it off, they can still have full redundancy of using their already pre-existung power plants connected to their grid. Those politicians have already given it thought and of course. Redundancy planning is already factored in.

  17. So CKJ signed a MOU. Don’t mean a thing, MOUs in Asia is another word for face-saving. MOUs are cheap and no downside risk. China counts MOU’s like poker winnings. I have a whole drawer full of them.

    You see, Korea and Japan don’t need China, and Japan and Korea don’t need each other (in terms of power generation and transmission). Both Japan and Korea are perfectly ok building out power capacity on their own. They are also spending money today to build out that capacity (eg KOGAS’s build-out). Each country has their own energy mix, each has their own strategy, each have national champions, uses for power etc etc. Linking up the countries is just added cost when there is no need for it once you are capacitized.

    That is how power generation works.

    There is no incentive for Korea or Japan to link up power transmission. Zero.

  18. I notice that there is never a down turn in the future for Asia. It is always up and to the right. Sigh. Anyone that buys that deserves what they get.

  19. Where have you been lately, Brian? Mulitiple nations have woken up to the scam the Germans have done to Southern Europe that China is doing to them. Especially when the Chinese couldn’t help themselves but show their Ebenezer Scrooge said that makes Diaspora Chinese so ‘well loved’ in the rest of Asia when they clamped down on nations who could not pay.This is why Indonesia recently told Beijing to GTH on the latest round of projects the Chinese were trying to ‘sell’ there.

  20. China is realizing that the BRI fantasies need a heavy dose of reality. BRI is in the national strategy and Xi has staked his reputation on it, so you won’t find any differing views on that side. But you will with all the countries China wants to work with. Korea and Japan will NEVER build a NEA transmission grid together, and never with China. Energy security. The train lines are all hocus-pocus (from the China involvement side). China come with a bag of money but the loan conditions are all in their favor – basically “you want this port/road/train/pipeline financed? Great, but it’s ours and we own all rights and make all decisions”. China has vastly underestimated the animosity their “China First” policy creates with the surrounding countries. Myanmar got seriously burned on a pipeline project and has now basically thrown the Chinese out. Thailand wants nothing to do with them and only looks south and west. Japan and Korea? make me laugh. I spend a LOT of time in Asia and I’ve NEVER had anyone say they want to work with the Chinese. I’ve had a fair number of Chinese tell me they can’t work with other Asians. The other lesson learned so far is that China thinks they can simply duplicate their “operating model” elsewhere. That is, build a train line by confiscating land and bringing in the dozers. They really have no idea how to work in a totally different environment – which is why they insist on every project to do 100% of everything themselves. And we are back to the making enemies issue.BRI will be (is already) a colossal policy failure, and a very expensive one. The concept makes a ton of sense, but wrong promoter and wrong attitude.

  21. Where have you been lately, Brian?

    Mulitiple nations have woken up to the scam the Germans have done to Southern Europe that China is doing to them. Especially when the Chinese couldn’t help themselves but show their Ebenezer Scrooge said that makes Diaspora Chinese so ‘well loved’ in the rest of Asia when they clamped down on nations who could not pay.

    This is why Indonesia recently told Beijing to GTH on the latest round of projects the Chinese were trying to ‘sell’ there.

  22. China is realizing that the BRI fantasies need a heavy dose of reality. BRI is in the national strategy and Xi has staked his reputation on it, so you won’t find any differing views on that side. But you will with all the countries China wants to work with. Korea and Japan will NEVER build a NEA transmission grid together, and never with China. Energy security. The train lines are all hocus-pocus (from the China involvement side). China come with a bag of money but the loan conditions are all in their favor – basically “you want this port/road/train/pipeline financed? Great, but it’s ours and we own all rights and make all decisions”.

    China has vastly underestimated the animosity their “China First” policy creates with the surrounding countries. Myanmar got seriously burned on a pipeline project and has now basically thrown the Chinese out. Thailand wants nothing to do with them and only looks south and west. Japan and Korea? make me laugh. I spend a LOT of time in Asia and I’ve NEVER had anyone say they want to work with the Chinese. I’ve had a fair number of Chinese tell me they can’t work with other Asians.

    The other lesson learned so far is that China thinks they can simply duplicate their “operating model” elsewhere. That is, build a train line by confiscating land and bringing in the dozers. They really have no idea how to work in a totally different environment – which is why they insist on every project to do 100% of everything themselves. And we are back to the making enemies issue.

    BRI will be (is already) a colossal policy failure, and a very expensive one. The concept makes a ton of sense, but wrong promoter and wrong attitude.

Comments are closed.