Greens mistake Fake Chinese Economic Statistics for a Climate Triumph, by Eric Worrall
China is reporting economic growth during a period of falling CO2 emissions – but this isn’t the first time China has promoted this falsehood.
Xi Jinping: Official website of Ali Khamenei, Supreme leader of Iran, CC BY 4.0, via Wikimedia Commons. Globe from NASA (Public Domain). Match: Dietmar Rabich / Wikimedia Commons / “Streichholz -- 2021 -- 6120” / CC BY-SA 4.0
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CLIMATE DELUSIONCLIMATE ECONOMICSOPINION
Greens mistake Fake Chinese Economic Statistics for a Climate Triumph
Essay by Eric Worrall
China is reporting economic growth during a period of falling CO2 emissions – but this isn’t the first time China has promoted this falsehood.
‘It’s good news’: Scientists suspect history about to be made in China
By Nick O’Malley
JULY 13, 2024For months, the reports came in and climate scientists and analysts pored over the data. Something unfamiliar was happening. It looked a little like good news. Perhaps even something of profound historical significance.
Ever since the industrial revolution began in the late 18th century, the amount of planetary warming greenhouse gases humans have been pumping into the atmosphere has grown inexorably, causing temperatures to climb dangerously over the past few decades.
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In 2019, humans pumped 35 billion tonnes of greenhouse gases into the atmosphere. That number fell by a staggering 6 per cent the following year as COVID crunched industrial production and shut economies. At the time, the fall prompted despair in some climate commentators. Is this what it would take to make a dent in emissions? If so, how could such an outcome ever be achieved in a functioning economy?
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But it is data from the past few months that is intriguing analysts today. The world’s economy is growing. China’s economy is growing. Yet greenhouse gas emissions appear to have peaked.
Some time last year, or perhaps earlier this year, it appears China’s emissions, in particular, reached a high point. If China has peaked, there is good reason to believe global emissions peaked, too. It would mean that some time over the past few months, the stubborn nexus between economic growth and greenhouse gas pollution was snapped, and the 250-year surge in emissions ended.
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How do we know these claims are likely based on fake statistics? Because this isn’t the first time it has happened.
From 2016
China’s post-coal growth
Ye Qi, Nicholas Stern, Tong Wu, Jiaqi Lu & Fergus Green
Nature Geoscience volume 9, pages 564–566 (2016) Cite this article
Slowing GDP growth, a structural shift away from heavy industry, and more proactive policies on air pollution and clean energy have caused China’s coal use to peak. It seems that economic growth has decoupled from growth in coal consumption.
Read more: https://www.sciencedirect.com/science/article/abs/pii/S1462901118308803
Every few years, China promotes the myth of decoupling, to explain the divergence between their fake economic growth statistics and their CO2 emissions.
What actually happened since 2016? Chinese CO2 emissions soared, as soon as their economy recovered from their downturn, and genuine economic growth caught up with their fake growth statistics.
There is plenty of supporting evidence the true explanation for falling emissions in 2024 is that China is suffering a severe economic crisis – they have a debt to GDP ratio of 288% and a collapsing asset price bubble.
China’s Economic Slump Is Here to Stay
MARCH 4, 2024 7:00 AM EST
James H. Nolt is adjunct associate professor of international relations at New York University and author of International Political Economy: The Business of War and Peace. He was founding dean of an international college in Nanjing, China, and for 23 years Senior Fellow at the World Policy Institute in New York.
China is in the midst of a profound economic crisis. Growth rates are flagging as an unsustainable mountain of debt piles up; China’s debt-to-GDP ratio reached a record 288% in 2023. But even that eye-popping figure does not capture the uncomfortable fact that much of it was borrowed to buy assets that no longer yield enough income to repay the debt. This is especially true in the housing sector, where sales have fallen by a third since the pre-pandemic peak, and new construction is down 60%. This is one of the worst housing crashes in the world over the last three decades.
Many Western pundits and politicians view this crisis as a sign of the bankruptcy of China’s leadership and economic system. But it is more akin to the cyclical debt crises that have plagued capitalist countries throughout history. An apt comparison is Japan’s crisis of 1989, which ended decades of high growth and rising asset prices, fueled by a ballooning debt bubble. Japan’s Nikkei stock index peaked in late 1989 and fell almost 80% over the next 13 years. Real estate prices fell for two decades starting in 1991. Neither of these major asset classes has exceeded the pre-crisis price peak ever since. Japan transitioned from being the fastest growing major economy during 1954-73, typically growing over 10% per year, to the slowest, with growth averaging only 1.75% per year from 1981 to 2023. China may be facing similarly prolonged difficulties.
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The bubble is already bursting. Chinese creditors have now scaled back new lending and raised interest rates, following government guidance announced as the “Three Red Lines.” As the most indebted Chinese bulls go bankrupt or panic sell to repay their loans, prices are falling further as their bear counterparts jump back in and buy assets at fire-sale discount prices. That will eventually put a floor on the price collapse but it is also redistributing wealth rapidly from debtors to creditors. Bears feast on the bulls during every crash.
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Read more: https://time.com/6835935/china-debt-housing-bubble/
So the real question is, how could the scientists and public figures quoted by the Sydney Morning Herald be so easily fooled by China once again promoting their transparent emissions decoupling mistruth?
The last time China pulled this stunt was 2016, less than a decade ago. You would think scientists and public figures might bother to do a little research, before accepting Chinese economic growth claims as reliable, and echoing such a transparent communist falsehood.