China: the real big picture

This is a particular problem for China because it is lacking in many resources and is restricted in attaining long-term resource security by the domination of markets and reserves by western global companies. Hence the need to go into high-risk, very poor countries, and to pay high prices.

The scale of demand is enormous. Just to finish building its power distribution network is calculated to require 10% of all the copper reserves in the world.

One example of Chinese action is the huge Aynak copper mine, being built by the Chinese in Afghanistan and due to start operating next year. While western governments are fighting an expensive war there, the Chinese are working to extract metal for their new-era future. Has this story ever made the Australian media?

The big build of China will be slowing as the rest of the world awakes to find that oil and coal prices are going relentlessly up and the rare earths and other more common metals, such as copper, needed to build alternative energy systems, have become hard to obtain and very expensive if you can.

One very important element of the story is this ending. At some point in a decade or two China will have a stable, mostly urban population serviced by adequate infrastructure to last for several decades and powered by as much renewable energy as is possible to achieve. At that point Chinese demand for coal and iron ore will drop rapidly as the economy shifts radically from building infrastructure to consumption goods and services.

China adopted the one-child-policy in 1978. The population is still growing because old people are living much longer but the working age population has already started to fall. When the retired generation dies off a significant population decline will ensue. Even with two-child families becoming acceptable there will be no appreciable growth.

Not surprisingly, as more than a billion people make the most rapid and comprehensive transition in human history there have been problems and mistakes. Small minded critics and lazy media hacks love to focus on the failures, and even on achievements they think are failures, to provide easy comfort and reassurance that nothing serious needs to be done by western governments. Meanwhile they ignore China's huge successes and policies that will shape the future of the planet and particularly of Australia.

Of course China is not the only nation taking realist positions. Germany has also quietly made great progress with alternative energy and France already gets most of its electricity from nuclear power. They also are largely ignored while we continue to do even less than the US.

One way to plan for Australia's future would be to get a deep understanding of China's long-term strategy for transition. We should seriously study their analysis of the global future.

Only realist political action can keep Australia riding high. But its hard to believe an Abbott government, or a chaotic ALP, will attempt anything so challenging.