Certified Legendary Thread China History in the Making Part 2

[RussellEbertHandball]

The Wookie put up this graphic from AFL Asia in the 2019 Participation thread on the Footy Industry board. Unfortunately no further break down for China like other nations in the article.

Participation in China 1,417 males 1,111 female, which is 2nd behind India, 5,074 males and 1,214 females. Third biggest market is Indonesia 736 males and 669 females. The Power Footy programs contributing nicely.

The PNG numbers are way out as last year they had 70,791 according to an AFL document.

Edit Just dawned on me, that the 52 males in PNG is actually in West Papua or Irian Jaya as the PNG is on the other side of that straight line and isn't even on the map.

24% GROWTH IN PARTICIPATION ACROSS ASIA IN 2019

AFL Asia is delighted to announce an 24% increase in participation growth for the 2019 season, ultimately stemming off the back of an increase in local development, female, Auskick and school-based program participants, as well as natural growth across the region. The growth in participation...

www.afl-asia.com

 

[RussellEbertHandball]

Been looking at the new look website this arvo and took a look at the China pages.

Janus picked up in late October, last page of previous thread, that Chinese oil and gas giant Sinopec became a Gold official match day partner. Coles has now come onboard as a Platinum official match day partner, joining Shanghai CRED, Australian Government, Australia Unlimited and Kennedy.

Found this video under the Power Footy link. No idea what they are saying but they look happy and a couple of Chinese guys leading the drills.





and they are giving the girls a go.

 

[OneGreatClub]

Been looking at the new look website this arvo and took a look at the China pages.

Janus picked up in late October, last page of previous thread, that Chinese oil and gas giant Sinopec became a Gold official match day partner. Coles has now come onboard as a Platinum official match day partner, joining Shanghai CRED, Australian Government, Australia Unlimited and Kennedy.

Found this video under the Power Footy link. No idea what they are saying but they look happy and a couple of Chinese guys leading the drills.





and they are giving the girls a go.


View attachment 790193

Haha Terry White Chemmart getting some exposure.

 

[Ford Fairlane]

The Wookie put up this graphic from AFL Asia in the 2019 Participation thread on the Footy Industry board. Unfortunately no further break down for China like other nations in the article.

Participation in China 1,417 males 1,111 female, which is 2nd behind India, 5,074 males and 1,214 females. Third biggest market is Indonesia 736 males and 669 females. The Power Footy programs contributing nicely.

The PNG are way out as last year they had 70,791 occurding to an AFL document.

24% GROWTH IN PARTICIPATION ACROSS ASIA IN 2019

AFL Asia is delighted to announce an 24% increase in participation growth for the 2019 season, ultimately stemming off the back of an increase in local development, female, Auskick and school-based program participants, as well as natural growth across the region. The growth in participation...

www.afl-asia.com

View attachment 789685

Lol I must be getting paranoid - I read that as Footy in Asia Crows

 

[Janus]

I’ve been travelling down the rabbit hole of the China/US trade war, and it’s exactly as I suspected - China wants to replace the US as the dominant world economic power.

Importers into the US won’t deal with China anymore because it adds another 10-15% cost on products for no net gain, and China is retaliating by telling their high school students not to go to the US for education - admissions are way down from the 300,000 students that normally enrol in US universities - which the US education system relies pretty ****ing heavily on. China is also funnelling all their investment into other countries away from the US - it's down 95%. The acquisition of a company like Bellamy's? That's a product of the trade war.

We could be going down a path where there is a two stage world economy - one based on the US dollar and one based on the yuan. An economic cold war, where the innovation of the US has to be slipped in through a back channel to Chinese manufacturers who then use that same conduit to sell products that are made in China but assembled in a country without tariffs (like Taiwan) so they can be classified as being 'made in Taiwan'.

You've got the US basically saying to China to buy all their agriculture from them ($40b-$50b a year, which is 4-5 times the $8.6b that China currently purchases from the US). You know the deforestation of the Amazon? That's all to do with Chinese firms accelerating the the production of soybean farming in Brazil. The US also wants to export its beef to China...but it would require the Chinese to lift their ban on meat with drug and hormone residues.

Basically, the US is trying to dictate to China that only the US should be able to profit from China's need for agricultural products, because the US shifted all their manufacturing to China. Whereas China wants to become independent and be able to source goods from the highest quality sources - hence why they invest in dairy and cattle farms etc.

And then there's this little tidbit:

"State-owned Sinopec expects China's natural gas demand to increase by 82% to 510 Bcm in 2030, from 280 Bcm in 2018, driven by continued industrial upgrading and urbanization.

Gas demand growth will come mainly from city gas, industrial usage and gas-powered utilities. Demand is expected to exceed 300 Bcm in 2019, up by almost 10% year on year.

"City gas still has a lot of space for development in China," a company official at an LNG conference in Beijing last week said.

City gas demand is likely to experience rapid growth over the next 10-15 years, driven by consumption growth from heating and the public sector.

This growth will be supported by China's growing urbanization and urban gasification, which are expected to exceed 70% within the next decade, up from 59.7% and 50.9% at the end of 2018, respectively."

The Power of Siberia pipeline from Russia only has an agreement to provide for Russian gas deliveries to China in the amount of 38 billion cubic meters per year. So there's a short fall of 472 billion cubic meters of natural gas per year. Even if they built 10 pipelines it wouldn't be enough to service the country.

Where's it going to come from? None other than through Xinjiang province, the home of the Uyghurs that the US has just signed bill condemning China's treatment of them. The US shipped 24.6 billion cubic meters of liquid natural gas to China in 2017.

Xinjiang contains gas reserves of 1.4 trillion cubic meters, more than any other region or province, the official China Daily reported in February. That means China doesn't have much gas at all and it all has to be imported.

Australia is the largest exporter of LNG in the world. In January 2019 China announced plans to increase its intake capacity of LNG four-fold over the next two decades: 34 coastal terminals with a combined annual import capacity of 247 million tons by 2035. The world total LNG trade in 2017 was only 289 Mt.

Now you have a greater understanding as to why Sinopec invests in Australian Rules football in China.

 

[Doctor Feel]

Is this still a thing?

 

[snozulu]

I think we should pull the plug on china and invest locally in our own backyard.

 

[RussellEbertHandball]

Where's it going to come from? None other than through Xinjiang province, the home of the Uyghurs that the US has just signed bill condemning China's treatment of them. The US shipped 24.6 billion cubic meters of liquid natural gas to China in 2017.

The Uyghurs detention crap isn't really about re-education, but a massive land and resources grab so that Xi's Belt and Road plans can make that connection thru central Asia and the "stans" to Russia and Europe, then Africa. Without Xinjiang province the scale of Belt and Road is more than halved and stuff has to go thru Tibet.

Your Sinopec's stuff also helps people understand why they have 250,000 employees.

The proposed huge Woodside LNG plant that I did some work on up in Broome in 2011, had an original budget of $30bil but the pin was pulled when it got to $40bil, was going to have 1,000 employees during the operational phase after 6,000 people were going to be employed to construct it over a 2 or 3 year period.

 

[GremioPower]

I’ve been travelling down the rabbit hole of the China/US trade war, and it’s exactly as I suspected - China wants to replace the US as the dominant world economic power.

Importers into the US won’t deal with China anymore because it adds another 10-15% cost on products for no net gain, and China is retaliating by telling their high school students not to go to the US for education - admissions are way down from the 300,000 students that normally enrol in US universities - which the US education system relies pretty ******* heavily on. China is also funnelling all their investment into other countries away from the US - it's down 95%. The acquisition of a company like Bellamy's? That's a product of the trade war.

We could be going down a path where there is a two stage world economy - one based on the US dollar and one based on the yuan. An economic cold war, where the innovation of the US has to be slipped in through a back channel to Chinese manufacturers who then use that same conduit to sell products that are made in China but assembled in a country without tariffs (like Taiwan) so they can be classified as being 'made in Taiwan'.

You've got the US basically saying to China to buy all their agriculture from them ($40b-$50b a year, which is 4-5 times the $8.6b that China currently purchases from the US). You know the deforestation of the Amazon? That's all to do with Chinese firms accelerating the the production of soybean farming in Brazil. The US also wants to export its beef to China...but it would require the Chinese to lift their ban on meat with drug and hormone residues.

Basically, the US is trying to dictate to China that only the US should be able to profit from China's need for agricultural products, because the US shifted all their manufacturing to China. Whereas China wants to become independent and be able to source goods from the highest quality sources - hence why they invest in dairy and cattle farms etc.

And then there's this little tidbit:

"State-owned Sinopec expects China's natural gas demand to increase by 82% to 510 Bcm in 2030, from 280 Bcm in 2018, driven by continued industrial upgrading and urbanization.

Gas demand growth will come mainly from city gas, industrial usage and gas-powered utilities. Demand is expected to exceed 300 Bcm in 2019, up by almost 10% year on year.

"City gas still has a lot of space for development in China," a company official at an LNG conference in Beijing last week said.

City gas demand is likely to experience rapid growth over the next 10-15 years, driven by consumption growth from heating and the public sector.

This growth will be supported by China's growing urbanization and urban gasification, which are expected to exceed 70% within the next decade, up from 59.7% and 50.9% at the end of 2018, respectively."

The Power of Siberia pipeline from Russia only has an agreement to provide for Russian gas deliveries to China in the amount of 38 billion cubic meters per year. So there's a short fall of 472 billion cubic meters of natural gas per year. Even if they built 10 pipelines it wouldn't be enough to service the country.

Where's it going to come from? None other than through Xinjiang province, the home of the Uyghurs that the US has just signed bill condemning China's treatment of them. The US shipped 24.6 billion cubic meters of liquid natural gas to China in 2017.

Xinjiang contains gas reserves of 1.4 trillion cubic meters, more than any other region or province, the official China Daily reported in February. That means China doesn't have much gas at all and it all has to be imported.

Australia is the largest exporter of LNG in the world. In January 2019 China announced plans to increase its intake capacity of LNG four-fold over the next two decades: 34 coastal terminals with a combined annual import capacity of 247 million tons by 2035. The world total LNG trade in 2017 was only 289 Mt.

Now you have a greater understanding as to why Sinopec invests in Australian Rules football in China.

That helps explaining the "F*ck You, Brazil" tweet from Trump this week. We are probably Trump's greatest fans in the world, but we seem to have taken his "America First" as meaning "Brazil First" here. He wasn't happy that we have seated with the Chinese past week.

 

[Janus]

That helps explaining the "F*ck You, Brazil" tweet from Trump this week. We are probably Trump's greatest fans in the world, but we seem to have taken his "America First" as meaning "Brazil First" here. He wasn't happy that we have seated with the Chinese past week.

Yeah, it's all a game of economic brinkmanship. The US believes that they deserve to be at the head of the queue when it comes to China's maturation into a consumer based economy rather than a manufacturing based one. China is basically saying that they've already paid their debt to the US with the billions of dollars of profits that US companies have generated shifting their manufacturing to China.

The Uyghurs detention crap isn't really about re-education, but a massive land and resources grab so that Xi's Belt and Road plans can make that connection thru central Asia and the "stans" to Russia and Europe, then Africa. Without Xinjiang province the scale of Belt and Road is more than halved and stuff has to go thru Tibet.

Your Sinopec's stuff also helps people understand why they have 250,000 employees.

The proposed huge Woodside LNG plant that I did some work on up in Broome in 2011, had an original budget of $30bil but the pin was pulled when it got to $40bil, was going to have 1,000 employees during the operational phase after 6,000 people were going to be employed to construct it over a 2 or 3 year period.

There were issues in Xinjiang way back in the early 2000s when they started building the gas pipelines through that region to Turkmenistan. It's only on the radar of anyone now because the US has a vested interest in shipping their LNG to China (they only started producing LNG in 2016 when they started fracking shale gas).

LNG is Australia's second biggest export and will become its biggest export in the coming years. Not sure why Woodside pulled out of that project - Inpex has spent $45b on its Ichthys project in Darwin...and they are looking to expand.

"The oil and gas giant, part-owned by the Japanese government, will look at options to build new LNG processing trains at the Ichthys site in Darwin once the existing two trains are operating at full tilt, and may seek to access new oil and gas resources from its Browse Basin fields, other offshore fields or onshore shale in the Northern Territory's Beetaloo Basin."

This was where Woodside wanted to build I believe.

"The venture, which is owned 26 per cent by French oil major Total and also involves several Japanese LNG buyers and Taiwan's CPC Corporation, represents Japan's largest single foreign investment in any sector."

 

[RussellEbertHandball]

Yeah, it's all a game of economic brinkmanship. The US believes that they deserve to be at the head of the queue when it comes to China's maturation into a consumer based economy rather than a manufacturing based one. China is basically saying that they've already paid their debt to the US with the billions of dollars of profits that US companies have generated shifting their manufacturing to China.



There were issues in Xinjiang way back in the early 2000s when they started building the gas pipelines through that region to Turkmenistan. It's only on the radar of anyone now because the US has a vested interest in shipping their LNG to China (they only started producing LNG in 2016 when they started fracking shale gas).

LNG is Australia's second biggest export and will become its biggest export in the coming years. Not sure why Woodside pulled out of that project - Inpex has spent $45b on its Ichthys project in Darwin...and they are looking to expand.

"The oil and gas giant, part-owned by the Japanese government, will look at options to build new LNG processing trains at the Ichthys site in Darwin once the existing two trains are operating at full tilt, and may seek to access new oil and gas resources from its Browse Basin fields, other offshore fields or onshore shale in the Northern Territory's Beetaloo Basin."

This was where Woodside wanted to build I believe.

"The venture, which is owned 26 per cent by French oil major Total and also involves several Japanese LNG buyers and Taiwan's CPC Corporation, represents Japan's largest single foreign investment in any sector."

The Browse Basin is a huge gas field. The problem is that the NW coast of Western Australia has 8m tides and bugger all people.

The gas field is about 500km long. Inpex had rights to the northern end of the field so they decided to run a pipeline 900 km to Darwin, where the tides are normal and you have a city of 130,000 or so.

Woodside picked a site 60km north of Broome, at James Price Point and were going to run a pipeline about 250km from the south end of the Browse Basin gas field they have rights to, to their proposed site on land.

Broome only has 15,000 people so the operational staff were likely to be all fly in fly out employees, and the proposal was that both during construction and operational phases, staff had to live at a facility on site, so that the fly in fly out staff wouldn't drive down to Broome an run amok like fly in fly outers in Karratha and Port Headland.

The 8m tides cause a massive issue for shipping. If you are walking along the beach at Roebuck Bay in Broome and walk a kilometre out towards the ocean you will have the water licking at your toes and ankles. But 6 hours later in the same spot, the water will be 6m above your head, and then a further 6 hours after that, the water is back at your toes, and the cycle repeats over and over, every 6 hours.

That means you have restricted short windows to get ships in to load up. That much water movement is great if you ever invent a tidal power electricity generation system, but shithouse if you are trying to load gas tankers 24 hours a day.

In very simple terms, Woodside had to build a slab of concrete, about 2km long, by 1km wide and maybe 50m high at the end out at the ocean, to be able to have that 24hrs a day ships docked and loading up the LNG.

The costs just kept blowing out as a result of the complexities. When my friend told me about the potential job at the start of 2011 the estimated cost was $30bil. Woodside were building an LNG plant at Karratha for the North West Shelf gas field at the time. It had a budget of $14bil and had blown out to $15.2bil by mid 2011 and was still about 12 months from completion.

30 June 2011 all the agreements between Woodside, WA government, Kimberley Land Council and the Jabir Jabir and Goolarabooloo peoples whose land the plant was being built on, had to be signed, I had been going up there for a few weeks by then and the estimates had blown out to $35bil.

Some benefits were released to the Aboriginal groups on signing, but major benefits came later when FEED, Front End Engineering and Design was completed and then at subsequent milestones. I was up there for a couple of weeks and then back for a week at a time but in October it all stopped as Woodside decided not to complete the FEED stage as costs had blown out to about $38bil.

In early 2012 the estimates were $40bil, the company I was working for didn't do any more consulting work on the project, and Woodside were only doing a small amount of planning on it.

At the AGM in December 2013, Woodside CEO Peter Coleman finally pulled the pin on it and said that estimates for the plant were as low as $40bil and high as $48bil and that they would wait until floating gas platform were developed before they would try again to extract the gas.

Someone was doing trials with a floating gas platform, can't remember who, but 6 years after that AGM announcement, nobody has cracked the technology for a deep water gas field floating platform and Woodside haven't extracted any of their gas rights.

Edit this was Sleezy's reply to my post above, which was moved to the Introductions thread on the BDC thread as the conversation between us talked a lot more about Woodside LNG plants, but I think this should be put back in here as he worked for Woodside and had further info.

Shell is still having massive problems with FLNG with Prelude. It was intended to be a design one, build many production line of mobile offshore LNG plants, but it hasn't quite panned out that way. They are still struggling to get Prelude commissioned I believe.

Woodside pulled the pin on James Price Point because of the risk of a downturn. At $48billion, it relied on the record high oil prices of the time to be profitable. If that project had gone ahead, Woodside would be bankrupt. They don't have government backing them up like INPEX does.

Pluto on the other hand, was built about 6 years prior. It was the first of a glut of new LNG production globally, and was able to take advantage of the record prices to pay itself off within the first 5 or so years of operations before the downturn

The current plan with Browse is to pipe it back to Karratha Gas Plant. That was one of the original concepts 20 years ago. It was rejected for two reasons. Firstly, no-one had ever piped gas 800kms subsea before. Now it has been done by Icthys so the concept is proven. Secondly, in the late 90s there was 20 years worth of gas to be processed at KGP. No one would fund the project because they wouldn't get any return on their gas for 20 years. Now the production from North Rankin and Goodwyn is starting to decline. Once the offshore production facilities are up and running in 2025ish, KGP will be half empty, and ready for another 25 years of gas.

I left Woodside a couple of years ago, so I'm a bit out of the loop now. However I have some friends who've been seconded overseas for the FEED studies. Full steam ahead as far as I know.

 

[Relativity]

We could be going down a path where there is a two stage world economy - one based on the US dollar and one based on the yuan.

I read somewhere that crypto currencies have been set up for just such an eventuation so maybe a crypto$ v US$ rather than yuan.

An economic cold war, where the innovation of the US has to be slipped in through a back channel to Chinese manufacturers who then use that same conduit to sell products that are made in China but assembled in a country without tariffs (like Taiwan) so they can be classified as being 'made in Taiwan'.

Canada and Mexico have been doing this (facilitating Chinese products to avoid tariffs) for years hence the US scrapping the old North American Free Trade Agreement for the proposed USMCA. Canada's economy has been structured around this loophole for decades hence their economy tanking since the US has shut down this backdoor. I reckon the US will be wise to any re-routing of products through Taiwan, Vietnam etc. World trade is being rewired at the moment and China will be the biggest loser from it.

Basically, the US is trying to dictate to China that only the US should be able to profit from China's need for agricultural products, because the US shifted all their manufacturing to China. Whereas China wants to become independent and be able to source goods from the highest quality sources - hence why they invest in dairy and cattle farms etc.

I don't think that the US is seeking exclusivity with agricultural trade with China but it does seem likely that Australia's favourable agricultural trade will be adversely impacted in the short term should the US succeed with their trade negotiations.

It has to be said that even if the Sino/US trade agreement doesn't eventuate the US has won to the tune of US$500b a year because that is what bilateral trading with China has been costing them. The US can just keep ramping up the tariffs until all trade stops. That would be a remarkable situation given that the US and China currently account for 39% of the worlds GDP.

 

[Grave Danger]

Olive ball!

 

[RussellEbertHandball]

 

[Lockhart Road]

I guess that is Tony Zhang, PAFC Chief Representative, Greater China, next to Andrew.

Promise Xu is up front on the left of photo.

Good that Andrew is so positive about 2020. He certainly was when we met a few weeks ago.

2020 is the Year of the Rat which is, traditionally, the best year in the cycle of twelve for business.

 

[RussellEbertHandball]

It has to be said that even if the Sino/US trade agreement doesn't eventuate the US has won to the tune of US$500b a year because that is what bilateral trading with China has been costing them. The US can just keep ramping up the tariffs until all trade stops. That would be a remarkable situation given that the US and China currently account for 39% of the worlds GDP.

US$500bil a year is an exaggeration as that is greater than the annual balance of trade of merchandise goods deficit between the 2 countries. In 2018 total Chinese goods imported into USA was worth US$539bil The last few years the negative balance for the US with China has been US$346bil 2016, $375bil 2017, $419bil 2018 and the 10 months to end of October this year its $294bil, which is some decent, but not a huge improvement. See monthly trade stats for US/China going back to 1985 are at;

International Trade

www.census.gov

It's hard to get good long term data for a breakdown of a balance of trade on services, but the USA has been in long term surplus with China and in 2018 its services export was $58.9bil and services imports of $18.4b for a $40.5bil surplus. That is mainly due to education exports, 360,000 students going to study in US (we have 153,000), few yank students going to China, more tourists going to the USA from China than the other way round and trade in professional services.

The US has been spending too much since 2000, when their balance of trade in goods and services hit $300bil for the first time and was $372bil and the trade deficit in goods only hit $446bil, which was only $198bil in 1997 and the current account deficit for the first time hit $403bil up from $288bil the year before. The goods trade deficit with China in 2000 was only $84bil of that $446bil

USA deficits peaked in 2006 when the balance of trade in goods was a deficit of $837bil, deficit of trade in good and services was $761bil and the Current Account deficit was $805bil. Probably affected by Bush fighting 2 wars at once.

For 2018 those 3 deficits were $887bil, $627bil, and $491bil respectively.

In late 2006 I read a couple of articles in the Financial Times by historian Niall Ferguson, who likes to comment a lot about economics even though he isn't formally trained in economics, (and pisses a couple of my economist mates off) that used the phrase Chimerica for the first time. He used it in his 2008 book Ascent of money and then all through his TV doco series that was shown in late 2008 around the world also called Ascent of Money starting a couple of months after Lehman Brothers and the GFC hit the world where he explained how we got to the GFC and the likely outcome post GFC for the world. Might dig up my DVD copy and rewatch it.

In those articles, book and TV doco, he said that USA citizens spend too much and that the Chinese save too much. They have a symbiotic relationship where they need each other - Yanks spends - buy Chinese goods, money goes to China, all these Chinese workers who moved from the country to the city, got paid $1-$10 a day, saved 50-60% of that, those savings went into banks and government institutions, who then for security purposes, went and bought USA government bonds, which allowed US federal and state governments to keep spending, that produced income for US workers and credit opportunities for US banks, that meant they kept spending, they would buy more Chinese goods, and on the cycle went.

The yanks have to cut their trade and current account deficit as the levels of this century are unsustainable. Trump can be criticised for a bloody lot of things but trying to fix up the trade deficit and current account deficit isn't one of them. Bush and Obama and the presidents since Reagan's time haven't addressed it as US since Reagan has gone from the biggest creditor nation to debtor nation, and by a big margin.

But as tough as Trump will be on it, the two economies are so intertwined that it won't be a big bang overnight thing. A 12% cut in the goods trade deficit in 2019 is a good start but it wont be a lot bigger than that next year. Might get as high as another 20% on 2018 peak deficit with China, but that would still be about a $275bil annual deficit on goods trade with China in 2020. The yanks probably have to aim for something like 10% compounded decrease over a decade.

The 2 economies are too interdependent. There will be a lot of talk but not much quick change unless a trade war turns into a fully blown cold war and/or real war.

 

[RussellEbertHandball]

And then there's this little tidbit:

"State-owned Sinopec expects China's natural gas demand to increase by 82% to 510 Bcm in 2030, from 280 Bcm in 2018, driven by continued industrial upgrading and urbanization.

Gas demand growth will come mainly from city gas, industrial usage and gas-powered utilities. Demand is expected to exceed 300 Bcm in 2019, up by almost 10% year on year.

"City gas still has a lot of space for development in China," a company official at an LNG conference in Beijing last week said.

City gas demand is likely to experience rapid growth over the next 10-15 years, driven by consumption growth from heating and the public sector.

This growth will be supported by China's growing urbanization and urban gasification, which are expected to exceed 70% within the next decade, up from 59.7% and 50.9% at the end of 2018, respectively."

The Power of Siberia pipeline from Russia only has an agreement to provide for Russian gas deliveries to China in the amount of 38 billion cubic meters per year. So there's a short fall of 472 billion cubic meters of natural gas per year. Even if they built 10 pipelines it wouldn't be enough to service the country.

Where's it going to come from? None other than through Xinjiang province, the home of the Uyghurs that the US has just signed bill condemning China's treatment of them. The US shipped 24.6 billion cubic meters of liquid natural gas to China in 2017.

Xinjiang contains gas reserves of 1.4 trillion cubic meters, more than any other region or province, the official China Daily reported in February. That means China doesn't have much gas at all and it all has to be imported.

Australia is the largest exporter of LNG in the world. In January 2019 China announced plans to increase its intake capacity of LNG four-fold over the next two decades: 34 coastal terminals with a combined annual import capacity of 247 million tons by 2035. The world total LNG trade in 2017 was only 289 Mt.

Now you have a greater understanding as to why Sinopec invests in Australian Rules football in China.

Back to the gas stuff. I dug up some stuff on the Browse Basin I had from my time working on the Woodside LNG stuff and a few other things.

Firstly Woodside started sponsoring Freo in 2005 as a second tiered sponsor and then in September 2009 they become Freo's JMS, right in the middle of Rudd's Carbon Pollution Reduction Scheme was being debated in parliament in the lead up to the Copenhagen summit in December 2009. It was a smart move for a oil and gas explorer and producer to get some public recognition when carbon reduction was front page stuff and would be for for the foreseeable future as most people thought Copenhagen would produce legally binding reductions around the world, not fall over and delay things until Paris in 2015.

Woodside are still JMS of Freo. Will be interesting to see how the Sinpoec relationship develops.

I don't know for sure, but I'm pretty sure that the Browse and Boaparte basins, both stay within Australia's Maritime and Economic borders, so I don't think Sinopec will be out there trying to develop a gas field in international waters.

Nothing stopping them going to Timor and Indonesia and extracting gas and oil in their border zones as well as coming to Oz to develop a field, given Oz has now concluded negotiations with Timor and Indonesia where the borders are drawn.

The proposed Woodside LNG Plant was about 50 km further down the coast of WA (Dampier Peninsula) on the far left hand side bottom point of the WA coast in the map below.





Everyone wants their slice. This story in mid 2014 says the discovery of 3 rocks in the basin probably gives WA a greater share of the royalties over the Commonwealth. And the WA government want an onshore development, not FLNG bringing less benefits to the state.

Rocky outcrops could change WA's share of offshore gas

The discovery of three rocks off the Kimberley coast means Western Australia's share of Woodside's Browse gas field could jump from 5 to 65 per cent. The rocky outcrops discovered by Geoscience Australia are part of the North Scott Reef and are technically islands, which will prompt a redrawing...

www.abc.net.au

The discovery of three rocks off the Kimberley coast means Western Australia's share of Woodside's Browse gas field could jump from an estimated 5 per cent to 65 per cent. The rocky outcrops discovered by Geoscience Australia are part of the North Scott Reef and are technically islands, which will prompt a redrawing of Western Australia's maritime boundaries. The discovery, which could result in more royalties and a greater say in how the gas is processed, has been welcomed by the State Government.........

Whereas as this one on the same day was more specific re the Torosa gas field.

Boundary change could see more gas royalties for WA

Western Australia could receive more royalties from the potential development of the Browse Basin following a revision of state and federal boundaries in the area, the state's Mines Minister has revealed.

www.abc.net.au

Western Australia could receive more royalties from the potential development of the Browse Basin following a revision of state and federal boundaries in the area, Mines Minister Bill Marmion has revealed. Mr Marmion said the National Offshore Petroleum Titles Administrator, part of the Department of Resources, had revised the boundaries of the Torosa gas field in the Browse Basin. Premier Colin Barnett has previously estimated WA's share of the field at 30 per cent, but today Mr Marmion told Parliament it could now be as high as 50 per cent.

 

[RussellEbertHandball]

Above I linked Woodside's sponsorship of Freo from a Sportspro website article. They had this one on Port and China from April this year.

Barcelona target Chinese growth with WE Red Bridge - SportsPro

Shanghai-based PR agency to provide local expertise on influencer marketing.

www.sportspromedia.com

Spanish soccer giants Barcelona have partnered with the WE Red Bridge communications agency to develop the La Liga club’s Chinese growth strategy. WE Red Bridge will assist the Spanish champions with its media relations and influencer marketing out of its Shanghai office.

• Spanish Super Cup could head to Saudi Arabia for six years

An integrated team have been developed with expertise ranging from digital to corporate press relations. WE Red Bridge already works with a number of clients in China, including Goodyear, La Liga and Port Adelaide Football Club......

This is WE Red Bridge's website.

WE Red Bridge

Telling impactful stories that drive growth. WE Red Bridge is an award-winning consultancy that delivers growth for businesses in China.

www.we-redbridge.com

 

[Janus]

US$500bil a year is an exaggeration as that is greater than the annual balance of trade of merchandise goods deficit between the 2 countries. In 2018 total Chinese goods imported into USA was worth US$539bil The last few years the negative balance for the US with China has been US$346bil 2016, $375bil 2017, $419bil 2018 and the 10 months to end of October this year its $294bil, which is some decent, but not a huge improvement. See monthly trade stats for US/China going back to 1985 are at;

International Trade

www.census.gov

It's hard to get good long term data for a breakdown of a balance of trade on services, but the USA has been in long term surplus with China and in 2018 its services export was $58.9bil and services imports of $18.4b for a $40.5bil surplus. That is mainly due to education exports, 360,000 students going to study in US (we have 153,000), few yank students going to China, more tourists going to the USA from China than the other way round and trade in professional services.

The US has been spending too much since 2000, when their balance of trade in goods and services hit $300bil for the first time and was $372bil and the trade deficit in goods only hit $446bil, which was only $198bil in 1997 and the current account deficit for the first time hit $403bil up from $288bil the year before. The goods trade deficit with China in 2000 was only $84bil of that $446bil

USA deficits peaked in 2006 when the balance of trade in goods was a deficit of $837bil, deficit of trade in good and services was $761bil and the Current Account deficit was $805bil. Probably affected by Bush fighting 2 wars at once.

For 2018 those 3 deficits were $887bil, $627bil, and $491bil respectively.

In late 2006 I read a couple of articles in the Financial Times by historian Niall Ferguson, who likes to comment a lot about economics even though he isn't formally trained in economics, (and pisses a couple of my economist mates off) that used the phrase Chimerica for the first time. He used it in his 2008 book Ascent of money and then all through his TV doco series that was shown in late 2008 around the world also called Ascent of Money starting a couple of months after Lehman Brothers and the GFC hit the world where he explained how we got to the GFC and the likely outcome post GFC for the world. Might dig up my DVD copy and rewatch it.

In those articles, book and TV doco, he said that USA citizens spend too much and that the Chinese save too much. They have a symbiotic relationship where they need each other - Yanks spends - buy Chinese goods, money goes to China, all these Chinese workers who moved from the country to the city, got paid $1-$10 a day, saved 50-60% of that, those savings went into banks and government institutions, who then for security purposes, went and bought USA government bonds, which allowed US federal and state governments to keep spending, that produced income for US workers and credit opportunities for US banks, that meant they kept spending, they would buy more Chinese goods, and on the cycle went.

The yanks have to cut their trade and current account deficit as the levels of this century are unsustainable. Trump can be criticised for a bloody lot of things but trying to fix up the trade deficit and current account deficit isn't one of them. Bush and Obama and the presidents since Reagan's time haven't addressed it as US since Reagan has gone from the biggest creditor nation to debtor nation, and by a big margin.

But as tough as Trump will be on it, the two economies are so intertwined that it won't be a big bang overnight thing. A 12% cut in the goods trade deficit in 2019 is a good start but it wont be a lot bigger than that next year. Might get as high as another 20% on 2018 peak deficit with China, but that would still be about a $275bil annual deficit on goods trade with China in 2020. The yanks probably have to aim for something like 10% compounded decrease over a decade.

The 2 economies are too interdependent. There will be a lot of talk but not much quick change unless a trade war turns into a fully blown cold war and/or real war.

They are interdependent because China pegs the yuan to the US dollar (and therefore to every other currency in the world). If the Chinese floated the yuan, their manufacturing costs would skyrocket and the US dollar and other currencies would tank against the yuan - some analysts believe the yuan is undervalued by as much as 20%-50%. They don't buy US government bonds for security purposes - it's to ensure that they can attract the lions share of manufacturing in the world.

That's why Trump is putting tariffs on Chinese goods. He's basically saying that if they aren't going to price their manufacturing correctly by floating their currency, he'll do it for them. That's why he says that no one cheats better than China. Their economy is too strong to have such a weak currency against the US dollar. It's why I believe he'll hit the 15% tariff on Dec 15 regardless - because it's not about what China buys from the US, but their economic policy in general.

"Trump has demanded that China commit to specific minimum purchases of U.S. agricultural products, among other concessions on intellectual property rights, currency and access to China’s financial services markets."

China has taken off tariffs on US pork because they've got an issue with an outbreak of African Swine Fever which destroyed most of their pork stockpiles and has driven up inflation because meat is now worth more, and they are trying to rectify the situation. If that hadn't of happened they never would have given a 'good will gesture'.

It's why I can see a fractured, two bloc world economy being the end game - where the US just completely bans China from buying US bonds in retaliation for not allowing them access to the Chinese financial markets and currency. Which is where the whole cryptocurrency phenomenon kicks in - if you're a business in a country that does trade with both blocs, crypto can set the exchange rate between the two in the absence of an official exchange rate.

The One Belt, One Road Initiative has 125 countries have signed on to the program, despite the protests from the US.

"Barack Obama’s administration didn’t have much better luck. It tried to dissuade its allies from participating in the Asian Infrastructure Investment Bank (AIIB), a Beijing-sponsored multilateral lending institution, on the grounds that it might not uphold proper standards like the U.S.-led World Bank.That argument, too, swayed almost no one. Australia, Canada, France, Germany, the United Kingdom, and other usually reliable U.S. partners all became AIIB members."

“No one wants to choose sides,” Parag Khanna, founder of the strategic advisory firm FutureMap and author of the book The Future Is Asian, said. “We live in a multipolar system. No smart country sides with only one power. Instead they play all the powers off each other to derive maximum benefit for themselves."

 

[RussellEbertHandball]

They are interdependent because China pegs the yuan to the US dollar (and therefore to every other currency in the world). If the Chinese floated the yuan, their manufacturing costs would skyrocket and the US dollar and other currencies would tank against the yuan - some analysts believe the yuan is undervalued by as much as 20%-50%. They don't buy US government bonds for security purposes - it's to ensure that they can attract the lions share of manufacturing in the world.

True but it's a bit more complicated than that. China have purchased about US$1.3 Trillion of US government bonds over the last 15 years or so. They do not want to take a 30% to 50% haircut on those bonds if the currency is forced to be traded at market value. And if forced to move to market value currency, they won't buy US government bonds any more.

When Niall Ferguson came up with Chimerica phrase in 2006 because of their interdependence, US/China trade was growing, but they weren't the largest trading partners in the world at the time. US/Canada, US/European Union and US/Mexico two way trade was bigger, but the China trade deficit was a little smaller than the deficits with the other 3 combined. The early 2000's had seen that deficit accelerate out of site, and not much has been done about it for 10 years post Ferguson's Chimerica articles.

Since 2006 China has sold the US about US$7 trillion of goods, and that currency manipulation has just made it harder to untangle things.

It's why I reckon gold will come back as an important player in the value of currencies. Not like pre 1971 when Nixon took the USD off the gold standard, but it will come back as a more important way to value currencies. And if the Chinese say F-U to Trump and aren't buying US bonds with their reduced trade surpluses, IMO they will buy gold. Might be some opportunities for Ports on that front.

 

[Janus]

True but it's a bit more complicated than that. China have purchased about US$1.3 Trillion of US government bonds over the last 15 years or so. They do not want to take a 30% to 50% haircut on those bonds if the currency is forced to be traded at market value. And if forced to move to market value currency, they won't buy US government bonds any more.

Which would suit the US just fine, since it would devalue the US dollar and shift a lot of manufacturing back to the US from China. Let's face facts - the only reason why anyone gets their stuff manufactured in China is because the production costs are considerably cheaper...it's not like they produce quality products (unless you have stringent QA practices in place).

At the moment, the reason why the Australian dollar is weak against the US dollar is specifically because of Chinese currency manipulation. 1 US dollar buys 7.04 yuan...and 7.04 yuan buys 1.46 AUD...which buys 1 USD. Take off 20% from the US dollar and it's 1 US dollar buys 5.632 yuan, which buys 1.168 AUD...which buys 1 USD.

If the USD was valued at 83.2 cents AUD, Australia would buy a shitload more products from the US. So would other countries, because most of the good stuff (like tech) comes from there. Speaking of tech...the only thing that the US needs China for is rare earth minerals...which is why you find this little tidbit on a search:

"The United States Department of Defense is in talks with Australia to host a facility that would process rare earth minerals, part of an effort to reduce reliance on China for the specialised materials used in military equipment, a senior American official said.

"We're concerned about any fragility in the supply chain and especially where an adversary controls the supply," Ellen Lord, the Pentagon's Under Secretary of Defense for Acquisition and Sustainment, told reporters at a Washington event on Monday.

Rare earth developers in Australia are edging closer to building plants. The country contains only 2.8 percent of the world's rare earth reserves, but accounts for more than half of the new projects in the global pipeline."

"The whole process is “expensive, difficult, and dangerous,” says former rare earth trader and freelance journalist Tim Worstall. He tells The Verge that because of this, the West has been more or less happy to cede production of rare earths to China. From the 1960s to the 1980s, the US did actually supply the world with these elements; all extracted from a single mine in California named Mountain Pass. But in the ‘90s, China entered the market and drove down prices, making Mountain Pass unprofitable and leading to its closure in 2002."

So what you'd have is Australia sending rare earth minerals to the US, the US turning that into tech, and Australia buying that tech from the US. It's probably why Australia was one of the only countries that never had tariffs put on steel etc. You don't **** over the people you're looking to buy shit from.

When Niall Ferguson came up with Chimerica phrase in 2006 because of their interdependence, US/China trade was growing, but they weren't the largest trading partners in the world at the time. US/Canada, US/European Union and US/Mexico two way trade was bigger, but the China trade deficit was a little smaller than the deficits with the other 3 combined. The 2000's had seen that deficit accelerate and not much has been done about it for 10 years post Ferguson's Chimerica articles.

Since 2006 China has sold the US about US$7 trillion of goods, and that currency manipulation has just made it harder to untangle things.

It's why I reckon gold will come back as an important player in the value of currencies. Not like pre 1971 when Nixon took the USD off the gold standard, but it will come back as a more important way to value currencies. And if the Chinese say F-U to Trump and aren't buying US bonds with their reduced trade surpluses, IMO they will buy gold. Might be some opportunities for Ports on that front.

See, I'd say crypto is the replacement for a gold standard. Gold has a value that fluctuates because there are always issues that affect the price - new mines, problems with mining, political unrest etc. Cryptocurrency is designed to circumvent all that because the amount available to be mined is fixed, it gets harder to mine it the more that is discovered (which jacks up the price in a regulated manner) and it is produced through transaction verification.

At the moment Bitcoin is the 'gold standard' for crypto, but everyone is waiting for the holy grail - a crypto currency that can be directly exchanged for fiat currency, can't be exploited by countries with low energy prices (China once again) and therefore used in all international transactions aka a "stablecoin". Facebook is trying to implement this with Libra, but their problem is the same problem the US has - they've tied the currency to 50% of the US Dollar, which can be manipulated by China as things stand.

"But none of that means stablecoins aren’t destined for big things. The technology’s ongoing momentum, coupled with geopolitical and global economic imperatives, suggests governments will ultimately have to embrace them or compete with them. As Federal Reserve Bank of Dallas President Rob Kaplan said last week, sooner or later “somebody’s going to figure out how to do this.”"

“It just reinforces, the dollar may not be the world’s reserve currency forever, and if that changes, and you tack on 100 basis points to $20 trillion, with relatively short average life, that’s a lot of money.”

“It’s $200 billion a year and all of a sudden we’ve got a tremendous problem here, so it’s something we’re watching very closely.”

“People around the world are working real hard to try to find alternatives to dollars and dollar infrastructure because the more they’re invested in that, the more susceptible they are to sanctions, tariffs and what’s going on right now.”

“It is inevitable … I think it is better for us to start getting our hands around it,” the Federal Reserve official said, answering a question about the Fed’s decision to create its own real-time payments system called FedNow.

Harker said:“I am looking at the next five years after that. What comes next? I do think it is something around digital currency.”

“The Federal Reserve, as the central bank of the United States, has the ability and the natural role to develop a national digital currency,” the Congressmen wrote, adding: “We are concerned that the primacy of the U.S. Dollar could be in long-term jeopardy from wide adoption of digital fiat currencies. Internationally, the Bank for International Settlements conducted a study that found that over 40 countries around the world have currently developed or are looking into developing a digital currency.”

Of course, it shouldn't surprise you that China is developing their own version of stablecoin.

"China’s crypto chief Mu Changchun said one of the main goals for the Chinese national stablecoin Digital Currency Electronic Payment (DCEP) is to preempt the rise of Facebook’s cryptocurrency Libra even before it is launched."

 

[RussellEbertHandball]

See, I'd say crypto is the replacement for a gold standard. Gold has a value that fluctuates because there are always issues that affect the price - new mines, problems with mining, political unrest etc. Cryptocurrency is designed to circumvent all that because the amount available to be mined is fixed, it gets harder to mine it the more that is discovered (which jacks up the price in a regulated manner) and it is produced through transaction verification.

At the moment Bitcoin is the 'gold standard' for crypto, but everyone is waiting for the holy grail - a crypto currency that can be directly exchanged for fiat currency, can't be exploited by countries with low energy prices (China once again) and therefore used in all international transactions aka a "stablecoin". Facebook is trying to implement this with Libra, but their problem is the same problem the US has - they've tied the currency to 50% of the US Dollar, which can be manipulated by China as things stand.

"But none of that means stablecoins aren’t destined for big things. The technology’s ongoing momentum, coupled with geopolitical and global economic imperatives, suggests governments will ultimately have to embrace them or compete with them. As Federal Reserve Bank of Dallas President Rob Kaplan said last week, sooner or later “somebody’s going to figure out how to do this.”"

“It just reinforces, the dollar may not be the world’s reserve currency forever, and if that changes, and you tack on 100 basis points to $20 trillion, with relatively short average life, that’s a lot of money.”

“It’s $200 billion a year and all of a sudden we’ve got a tremendous problem here, so it’s something we’re watching very closely.”

“People around the world are working real hard to try to find alternatives to dollars and dollar infrastructure because the more they’re invested in that, the more susceptible they are to sanctions, tariffs and what’s going on right now.”

“It is inevitable … I think it is better for us to start getting our hands around it,” the Federal Reserve official said, answering a question about the Fed’s decision to create its own real-time payments system called FedNow.

Harker said:“I am looking at the next five years after that. What comes next? I do think it is something around digital currency.”

“The Federal Reserve, as the central bank of the United States, has the ability and the natural role to develop a national digital currency,” the Congressmen wrote, adding: “We are concerned that the primacy of the U.S. Dollar could be in long-term jeopardy from wide adoption of digital fiat currencies. Internationally, the Bank for International Settlements conducted a study that found that over 40 countries around the world have currently developed or are looking into developing a digital currency.”

Of course, it shouldn't surprise you that China is developing their own version of stablecoin.

"China’s crypto chief Mu Changchun said one of the main goals for the Chinese national stablecoin Digital Currency Electronic Payment (DCEP) is to preempt the rise of Facebook’s cryptocurrency Libra even before it is launched."

Crypto or digital currencies are the future, but it will be a long time before they will become the standard.

If you reckon gold has too many variables, look at bitcoin - 400% increase from this time last year to July then a 35-40% drop in next 6 months. That's not an acceptable alternative.

And governments and central banks aren't handing over control anytime soon, especially the yanks or chinks.

 

[Janus]

Crypto or digital currencies are the future, but it will be a long time before they will become the standard.

If you reckon gold has too many variables, look at bitcoin - 400% increase from this time last year to July then a 35-40% drop in next 6 months. That's not an acceptable alternative.

And governments and central banks aren't handing over control anytime soon, especially the yanks or chinks.

Bitcoin is variable because it is prone to speculation - it's not linked to anything of substance, so the value can fluctuate based on how the market is feeling at any given time.

It's why stablecoins are meant to be linked to a basket of fiat currencies. Personally, my idea would be to link it to GDP per capita and determine the value of the exchange rate from there.

 

[portly]

Enjoyable conversation guys.


On SM-G920I using BigFooty.com mobile app

 

[Bennie the Nurse]

This Chinese Business Ensemble at Alberton Friday (6/12/19)