Hydrogen fuels a revolution in Chinese trucks

Analysts say fuel cell electric vehicles are the leading alternatives to internal combustion engine automobiles

By ALAN KIRK

On March 22, a trio of Chinese electric vehicle (EV) companies – Nio, Xpeng, Li Auto, all New York listed – announced that they were hiring investment advisers to assist them with secondary listings in Hong Kong.

Credit Suisse and Morgan Stanley have been appointed as Nio is looking to sell a 5% stake, valued at approximately $3.5 billion. Somewhat lower but still comparable valuations for the other two would bring a total of $7.5 billion to Hong Kong.

Surprising?

CNBC stock market guru Jim Cramer, usually unflappable, did a double take on air, also on March 22, commenting on Ark Investment fund manager Cathie Wood’s call of $3,000 per share for Tesla,

“I don’t think there is a fund manager in this country that could get away with this kind of thing other than Cathie Wood.

“But Cathie Wood actually is so good that you start thinking, ok, what is Elon Musk going to do? Maybe he’s got a lot on his mind that she has thought about and …”

And so it went for several more minutes.

The electric vehicle space is jumping and, of course, Musk almost certainly has a lot in mind that will make it even more attractive to investors.

What he’s most likely not thinking about is the large-scale application of hydrogen for EVs. He once called fuel cells “fool cells.”

But while hydrogen fuel cells are just beginning to provide serious competition to battery powered vehicles in personal transportation, they are making a large impact in the heavier vehicle commercial transportation space where large loads have to be carried over long distances.

That’s where hydrogen has the advantage.

And that’s where China, just getting to be competitive with the likes of Tesla in snazzy passenger cars, is poised to seize the lead with hydrogen-powered trucks.

The hydrogen fuel cell is a rare example of a long-established technology turning into a game-changing disrupter. It has powered spacecraft and submarines for decades. However, it made little headway in ground transportation because governments balked at the cost of building fueling infrastructure. And also because the cost of producing the raw materials was prohibitive.

That’s changing in a big way! Mainly because China has made hydrogen-powered ground transport one of the top priorities of its $560 billion a year technology investment budget.

Europe and Japan  Germany has declared 2021 the year of hydrogen technology  are running only slightly behind China. For the next decade or so, battery-powered passenger vehicles will dominate the market for low-carbon substitutes for the internal combustion engine. But batteries can’t power long-range freight transportation by truck and rail, and China is making a decisive commitment to hydrogen.

China’s commitment to hydrogen has drawn the attention of global investors.

In a March 2021 report entitled “China’s gateway to a hydrogen future,” J.P. Morgan research analysts  Han Fu and Stephen Tsui write, “Green hydrogen, a clean form of energy, clearly holds potential to play a critical role in China’s 2060 carbon neutrality ambitions.

“Fuel Cell EVs appear to be emerging as an early use case. This is an opportunity for the China hydrogen ecosystem to develop approaches to overcome technical and economic challenges, necessary for more widespread future applications. Hydrogen plays have been in market focus, and valuations are lofty.”

“The global automotive fuel cell market size was USD1.07 billion in 2020…This market exhibited a stellar growth of 44% in 2020,” according to a Fortune Business Insights study, and “is projected to grow from USD $1.73 billion in 2021 to UD $34.63 billion in 2028 at a stellar compound adjusted growth rate of 53.5% in the 2021-2028 period.”

The Fortune report adds that fuel cell electric vehicles are “the leading alternatives to the widely used internal combustion engine automobiles.” The lion’s share of the growth, will be in the Asia-Pacific region.

Ares Motor CEO Ian Hanna with some Chinese colleagues at the Wisdom Motor plant in Zhangzhou, Fujian, China. Photo: Supplied.

Already largest market

Already the largest market for Plug-in Energy Vehicles (PEV’s) with 3 million on the road. China projects a fleet of 50,000 fuel-cell vehicles (FCV’s) by 2025 and 1 million by 2030, from only 6,000 on the road in 2019.

Beijing listed hydrogen as an energy source in a public law for the first time in its 2020 Energy Law of the People’s Republic of China. It established subsidies for FCV’s through four government departments, with an emphasis on freight and urban mass transit.

China is ready to finance the refueling infrastructure required to make hydrogen-based transport economically viable. And it has a large supply of hydrogen. It is now produced as a waste byproduct by its chemical industry.

According to government directives issued in September 2020, central government subsidies for FCV’s could reach RMB 17 billion. It is depending on how quickly Chinese cities meet their targets for FCV deployment. Local governments are likely to match the central government support. Supporting between 40,000 and 60,000 new vehicles between 2020 and 2023.

China’s commitment to fuel-cell vehicles prompted a scramble by Europe and Japan to put forward their own programs.

Established Chinese automakers as entrepreneurs are launching new ventures to meet the enormous demand for FCV’s projected by the government. SAIC, a state-owned automaker, plans to produce 10,000 FCV’s a year by 2025. More ambitious is the alliance between startup Ares Motors and two established Chinese vehicle manufacturers, Fujian-based Wisdom Motors and Chery Holdings of Anhui Province.

Ares expects to produce 4,000 PEV’s and FCV’s in 2021 at Wisdom’s Fujian facility. And cross the 10,000- vehicle mark within several years.

Large international automakers are gearing up for the Chinese market. Both as OEM’s and as components manufacturers. Toyota set up a joint venture with FAW group in 2019 which will begin to deliver fuel-cell systems for trucks and buses in China in 2022.

The supply chain for FCV components, moreover, is in an early stage of development. The September government directives focused on building infrastructure (mainly refueling stations) as well as developing a robust supply chain.

This includes more efficient capture of waste hydrogen from China’s chemical industry. Also additional hydrogen production facilities, and manufacturing of fuel stacks (the hydrogen storage module for vehicles) as well as engines.

J.P. Morgan analysts explained in their March 2021 report, “With the carbon-neutrality target now in place, we are optimistic that hydrogen can replicate the success of wind/solar power. The H2 addressable market could grow >30x by 2050, to Rmb12tn, and we estimate green hydrogen’s being commercially competitive by 2030.

This expectation is backed by multiple catalysts to spawn H2 development in China, including top-down policy support, technological improvements and economies of scale.”

Hydrogen, to be sure, remains controversial.

In Europe, Volkswagen-owned Scania, one of Europe’s largest truck producers, declared last year that fuel-cell trucks will be too inefficient and costly to compete with the battery-powered alternative. Scania is betting that improvements in battery technology will allow battery-powered trucks to carry a standard 40-ton load for 4.5 hours — far more than today’s batteries can manage.

To travel several hundred miles today, an eighteen-wheeler would have to carry nothing but batteries to power the engine.

Volvo and Daimler have joined forces with Shell to make hydrogen the future commercial standard for trucking in Europe.

Dubbed “H2Accelerate,” the Shell-led program envisions a public-private partnership to create economies of scale for freight FCV’s. With a network of hydrogen fueling stations built out across Europe by the second half of the 2020s. A trade association, Hydrogen Europe, predicted that Europe would have 10,000 hydrogen trucks in operation by 2025 and 100,000 by 2030.

The United States is far behind Asia and Europe.

A former top General Motors engineer, Ian Hanna, believes in pursuing hydrogen and battery technology in tandem. A former head of GM’s systems safety operations in China, Hanna now heads Ares Motors, an ambitious OEM startup.

What distinguishes Ares is a combination of intellectual property for vehicle fuel cells and partnerships with major Chinese manufacturers that allow it to scale up vehicle production very quickly.

“We’ve got prototypes running on the road  with demonstration vehicles that are to be ready by  the end of the year. We are actually going after significant volume for this year in the thousands  of vehicles,” Hanna told Asia Times.

“And it’s with our dual approach. We’re not only a hydrogen fuel cell company. We’re  also a battery electric vehicle [BEV} company. That dual propulsion strategy  allows us to meet customer needs this year.

“The 2021 volumes will primarily be through the BEV’s. The infrastructure is well established and the technologies of course are mature, so the customer’s comfortable  with it. And then long-term we’ll be able to offer  our customers both the hydrogen fuel cell vehicles and our BEV vehicles. Only  depending upon  whatever is the best fit for their use.”

Choice of electric battery power or hydrogen fuel cells

Ares’ flagship product is a heavy truck with a choice of electric battery power or hydrogen fuel cells. The hydrogen model offers a 1,000-kilometer cruising range with a standard 43-ton load. Compared with 400 kilometers for the battery-electric vehicle version.

“For a lot of the longer-range customers,” Hanna added, “the BEV truck may not make sense. So we’ll be able to offer them both of those solutions. I think our timing will be right. We will have the customer relationships, as well as the technology to differentiate our company.

“We have our own proprietary fuel cell engines and other technology that we can build and integrate into our trucks. By contrast, competitors are doing that through non-binding partnerships. We’ve developed a lot of that technology, and our partners are part of the Ares family. A lot of our technology comes from established OEMs.

“There’s no reason for Ares to go and reinvent an electronic power system. We have great partners that already  know how to do that really well right now. We will  be  able to hit the ground with significant volume in a very short time.”

A key partnership is with Sunrise Power, China’s premier manufacturer of fuel cells, with whom Ares has a joint-venture laboratory. Ares is working with Sunrise and other partners to build hydrogen refueling stations in Europe and North America as well as China.

According to a company release, “The new Ares energy stations will ensure the infrastructure is in place to support both our BEV and FCEV vehicles.  The energy station will include facilities for charging BEV vehicles, Hydrogen fueling pumps, traditional gas and diesel pumps, and battery swap capability.”

Strong government support and a robust supply chain

The combination of strong government support and a robust supply chain for FCV technology as well as hydrogen fuel makes it possible for a startup like Ares to scale up production rapidly.

“Asia Pacific is projected to hold a major market share due to the encouraging FCEV deployment targets of governments. Coupled with increasing investments in hydrogen fueling infrastructure. Additionally, high fuel stacks manufacturing capacities in the region, owing to the presence of large-scale FC passenger car manufacturers, will also add to the regional landscape.

Ares Motor, a Canadian company with principal operations in China, is seeking a Nasdaq listing in the course of the first half of this year. It also builds city and highway buses, as well as logistic vehicles and autonomous tractors for use in port and dock areas.

Perhaps Ares’ most important advantage is to be located in China. Cost efficiency is the key to the future of hydrogen-powered transport. And the cost of hydrogen itself is the most important variable.

China now produces a third of the world’s hydrogen

China now produces a third of the world’s hydrogen. 20 million metric tons a year. Enough to cover a tenth of the country’s total energy needs. At an estimated fuel consumption of 7.5 kilograms of hydrogen for every 100 miles of road haulage, according to Fuelcelslworks.com, China’s present output potentially could power a truck fleet over 267 billion miles a year of transport. More than enough to meet the country’s present annual 6 billion ton-miles of road transportation.

The cost of hydrogen production is falling. From $6 per kilogram in 2015 to $2 per kilogram in 2025.

China led the world in deployment of cost-efficient solar energy. Many analysts expect China to do the same with hydrogen. A study by Chinese scientists argues that a $2/kg hydrogen price can be achieved quickly through electrolysis of water. It produces the purest hydrogen with the lowest overall environmental impact.

Freight and bus transportation with FCVs becomes economically viable at a hydrogen price of $3/kg. Passenger car FCVs become viable at $2/kg.

Apart from China’s comparatively low production costs for hydrogen, a shift to this fuel source contributes to China’s energy security. As of the first half of 2020 China imported 73% of its oil consumption. Substituting home-produced hydrogen for imported oil is a national security measure as well as an economic and environmental consideration.

China vaccines to S. America isn’t ‘aggression’

China providing vaccines to South America isn’t ‘aggression’ or ‘bullying’, they’re just stepping up where Washington failed

By Tom Fowdy

Americans moaning about China making a play in what they patronisingly call ‘their own backyard’ don’t have a leg to stand on having left Latin America to fend for themselves throughout the pandemic.

Washington Post columnist Josh Rogin is bemoaning China’s “vaccine diplomacy” in Latin America. Whilst the United States has suffered from large scale mismanagement of Covid-19, hoarding vaccines and taking a robust ‘America First’ policy to overcome the pandemic which has left close to 600,000 dead, China has taken a leading role in providing assistance to Latin America. Beijing has sent units of Sinovac to both Central and South America. Exporting and donating millions of vaccines to almost every major country in this region excluding Paraguay, who choose to maintain ties with Taiwan.

With the region having faced aggressive variants, most particularly the one originating in Brazil, the nations of Latin America have had nobody else to turn to except China, and to an extent: Russia. This has been much to the disdain of Rogin and the US media in general. They are aiming to keep the blame focused on Beijing who is, he says, “abusing its power at every stage” and “advancing its interests.” Somehow portraying China’s support to the continent as a form of aggression, bullying and expansionism whilst the United States was perfectly happy to sit on the sidelines.

According to an unnamed Biden administration official in the piece: “The countries of the Americas are not dumb, they know they are being leveraged… And when the Americans come in, they will recognize who their friends are.” This of course is a strange, deeply ironic and utterly bizarre comment given the circumstances. One must question, if the United States truly is a “friend” of Latin America, and, if it is, where was it during the peak of the crisis? Washington is barking about China’s involvement in the region on the back of having done literally nothing itself, yet still simply expects these countries to flip towards the United States and push away China when it is finished putting itself first? Why would they ever be so stupid?

Undisputed hegemony over Latin America is the top goal of US security. Washington often describes the region as “its backyard,” revealing rhetoric in itself as it implies ownership. Since the 19th century, the US has pursued a foreign policy strategy called “the Monroe Doctrine” which aims to keep all geopolitical competitors, at that time meaning Britain and France but later extending to the Soviet Union, out of the Western Hemisphere. This has led to policies of long-term interference, election meddling, orchestrated coups, targeted sanctions and outright invasions to punish any state in the area hostile to Washington. It is the bedrock of the hostility towards Cuba, and the efforts to force regime change in Venezuela.

Fast forward to the new era of “Great Power Competition” and the focus is on China’s influence in Latin America, as it provides an alternative source of investment and support to Washington. As suggested by the initial column, the US has suffered some setbacks in the pandemic as it has exposed the more obvious reality that Washington doesn’t really care about the prosperity or wellbeing of Central and South America, it just wants control. This, combined with the disastrous Covid-19 outbreak at home, left the US a mere spectator as China provided support to numerous countries. This was even enough for Jair Bolosanaro, a staunch supporter of the US, to flip away from being anti-Beijing and U-turn on a proposed ban of Huawei in the country’s 5G networks.

As a result, the mainstream media have waged a relentless campaign to discredit China’s vaccines, with a repetitive emphasis on trying to brand the Sinovac product, which has been used widely in Latin America, as ineffective. There is a particular focus on Chile which is currently suffering a strong second wave of the virus. Even though Santiago released a study showing the vaccine in fact does yield positive results, this has not stopped the headlines repeatedly attempting to discredit it. The media spotlight has not been on America’s obvious inaction in the region, but a constant focus on attempting to undermine and question China when the participating countries have been suffering a crisis and had few serious options. Pfizer might be a better vaccine, but America isn’t sharing it and won’t until its own needs are met.

This makes the “true friends” rhetoric all the more ridiculous. Washington claims Latin America as its “backyard” then refuses to do the gardening. Why then, with an attitude like this, would Latin American countries simply boot out China when the United States finally gets around to helping out? Obviously, thanks to geography, the United States will always be the bigger power in the region, but, from the point of view of these countries, they want more, not less options. Why choose one source of help when you can have multiple? Instead of begging for scraps from Washington’s table, why shouldn’t they accept the relief China is offering? And, no, that doesn’t mean they are “switching loyalties” in the zero-sum way it is being depicted. At the end of the day, a catastrophic global crisis has been occurring and America wasn’t there to help, so what right do they have to still expect and demand obedience. This isn’t Chinese aggression or “bullying,” this is a foreign policy failure by two consecutive White House administrations.

Tianwan NPP – the largest object of economic cooperation between Russia and China

In the PRC, there are currently 50 operating industrial nuclear reactors with a total electrical capacity of 47.5 GW. According to this indicator, China is second only to the United States and France. Although, unlike the latter, where nuclear power accounts for over 70% of the country’s total electricity generation, China has only 5%; seven years ago, the figure was two times lower, and the capacity of all power units was 16 GW.

Russia has made and continues to make a significant contribution to the development of the PRC’s nuclear power industry. Through the efforts of Rosatom, the Tianwan nuclear power plant is being built. It is located in the area of ​​the same name in the Lianyungang city district of Jiangsu province. At the moment, its capacity is 5.5 GW. The facility is the largest within the framework of Russian-Chinese economic cooperation.

Start of construction

The construction of nuclear power plants in eastern China began in 1999. Then the operating capacity of nuclear power in the Asian country was only 2 GW. The Russian company had signed a general contract for the construction of the facility two years earlier with the newly formed JNPC ( Jiangsu Nuclear Power Corporation ).

© 风 之 清扬 / CC BY-SA 3.0 (Construction of the Tianwan NPP, 2010)

Atomstroyexport CJSC – Engineering Division of Rosatom State Corporation – according to the agreements, it was to complete the project of the future plant, supply the necessary materials and equipment, carry out construction and installation work and train Chinese personnel for the further operation of the nuclear power plant.

The AES-91 project, developed by specialists from the St. Petersburg Institute Atomenergoproekt ( now JSC Atomproekt ), was taken as a basis . On its basis, the detailed design of two power units with VVER-1000/320 reactors was carried out. They were put into operation as part of the first stage in the summer of 2007.

At the Tianwan NPP, Russian specialists for the first time used a system of passive protection that was new at that time. Called the Melt Localization Device. This tapered metal structure is installed under the reactor vessel. In the event of a severe accident, retains the melt and solid fragments of the destroyed core, providing insulation for the foundation under the vessel and the reactor building. Thanks to the introduction of the new technology, six years after the launch of the nuclear power plant, its first two power units were recognized as the safest in China. The station began to generate 15 billion kWh annually.

Second stage

Successful cooperation contributed to the continuation of joint work. Russia and China agreed on in the fall of 2009, and in March 2010 they signed a new contract worth $ 1.7 billion for the construction of the second stage. These are power units 3 and 4. According to official publication of Rosatom reported that the negotiations were not easy.

© Mihha2 / CC BY-SA 3.0 / wikimapia.org (Construction of the Tianwan NPP)

By this time, Beijing was cooperating with the Americans, Japanese and French in the field of nuclear energy. Their own projects were also developed. Therefore, the competition for the construction of the next two power units at the Tianwan NPP was serious. The Russian side hoped to sign the treaty back in 2008, but the discussions dragged on.

As a result, taking into account the level of safety and technical and economic indicators, the Chinese side still gave preference to the Russian project. Moreover, it was refined from the technical and operational sides, based on the experience of the accident that occurred in March 2011 at the Fukushima-1 NPP.

The second stage was launched in December 2012. Power unit No. 3 was commissioned at the beginning, and No. 4 at the end of 2018. Everything related to the operation of the nuclear reactor was designed by JSC Atomproekt, the construction, installation and commissioning works were carried out by the Chinese with the participation of specialists from Russia. Chinese President Xi Jinping called the Tianwan NPP an exemplary cooperation project.

New stage

The third stage was implemented by China on its own. The ACPR1000 reactors were installed on the blocks No. 5 and No. 6, which are based on the French project of the M310 reactor.

In the year of completion of the second stage, another agreement was concluded with the Russian side. According to which Atomstroyexport will be engaged in the design of Units 7 and 8. Later, a general contract was signed for construction. These will be new power units with pressurized water power reactors of generation “3+” and with a capacity of 1150 MW each ( VVER-1200 ). Then it was reported that the pouring of the first concrete of power unit No. 7 will begin in 2021. In March of this year, the head of the State Atomic Energy Corporation “Rosatom” Alexei Likhachev confirmed that work on the construction of the fourth stage of the nuclear power plant should begin in late spring.

After the fourth stage is completed, the Tianwan NPP with a total capacity of 8.1 GW will become the largest nuclear power plant on the planet. Until 2011, this was the Japanese Kashiwazaki-kariva ( 8.2 GW ), but after the accident at Fukushima-1, all seven of its units were stopped for modernization. This year, the sixth and seventh are to be restarted, but the fate of units 1-5 is still unknown, it is quite possible that they will never resume work.

China determined to build iron ore hub in Africa

World’s largest untapped iron ore reserve could be online by 2025, expert says

KEN MORIYASU, Nikkei Asia chief desk editor

There was a time when Japan, like China today, was the rising power in the East. That kept military planners in the West awake at night.

“It is very certain that no other nation at the present time is spending so large a part of its revenue on naval preparations,” military author Hector Bywater wrote in the 1921 book “Sea-Power in the Pacific — A Study of the American-Japanese Naval Problem.”

But Japan had a critical weakness: a lack of steel.

“Since the close of the Great War, shipbuilding in Japan has been seriously hampered by the difficulty of obtaining steel,” Bywater observed in his book. He accurately predicted a naval conflict between Imperial Japan and the U.S. two decades later.

Japan had imported large quantities of American steel under a special agreement between the two governments prior to 1917. Then the U.S. imposed a steel embargo that stemmed the flow to the Asian country.

“So serious has the shortage become of late that the output of tonnage in Japan during 1920 was 25% short of the forecast of 800,000 tons which had been made in January of that year,” Bywater wrote. “This scarcity of steel reacted on the naval program, delaying the launch and completion of ships.”

The armored cruiser Izumo, flagship of the Third Fleet of the Imperial Japanese Navy, is seen in Shanghai in 1937. Japan struggled to procure steel after the U.S. enacted an embargo in 1917.   © Getty Images

China learning from history

Chinese state planners looking to learn from history would quickly notice that the glaring vulnerability for Beijing today is its dependence on iron ore from Australia. While Beijing has tried to squeeze and punish Canberra for proposing an international investigation into the roots of COVID-19, it has been unable to wrestle itself away from Australian iron ore, which accounts for over 60% of China’s imports.

Australia deepens its connection to the Quad grouping with the U.S., Japan and India, forming a de facto anti-China tag team in the Indo-Pacific. Beijing has found it increasingly uncomfortable to depend so much on Canberra for iron ore. Also the basic material behind its own military buildup.

But that dependence may very well change by 2025, says Peter O’Connor, senior analyst of metals and mining at Australian investment firm Shaw and Partners.

“They are very serious” about diversifying supply and flattening the cost curve of iron ore.

The top focus for China’s diversification push is Guinea. An impoverished but mineral rich country in West Africa. A 110 km range of hills called Simandou is said to hold the world’s largest reserve of untapped high-quality iron ore.

Commodity watchers have known of Guinea’s potential for many years. However, the lack of infrastructure has hamstrung such development efforts. A roughly 650 km railroad would need to be built from scratch. And also a modern port from which the iron ore would be shipped.

Cost calculations have always discouraged potential entrants, such as Rio Tinto. But Beijing has more incentive to carry out the project than mere return on investment calculations. Because China needs to avoid the fate of Japan in the early 20th century.

Infrastructure building – not a problem for China

“Infrastructure is a function of time, money, the willingness to invest and, more importantly, the capability.”

China is building railroads around the globe through its Belt and Road Initiative and has no shortage of experience.

But what about the funding?

China currently buys 1 billion to 1.1 billion tons of iron ore yearly from third parties, O’Connor said.

“For every $1 the Chinese can lower the long-term iron ore price … that’s $1 per ton times a billion. It is a billion dollars of saving per year. It’s not just about diversity, it’s about lowering the price. It is not about the return on equity or return on capital of the actual investment. It is more about the benefit of the longer-term structure of the price.”

The long-term trajectory envisions the price of iron ore dropping to around $60 per ton from around $160 currently.

The project to develop Simandou has been split into four blocks. China holds either a direct or indirect stake in every one of them. The area holds an estimated 2.4 billion tons of ore graded at over 65.5%.

“Extraction of Simandou’s iron ore reserves would transform the global market and catapult Guinea into an iron ore export powerhouse alongside Australia and Brazil,” Lauren Johnston, a research associate at the SOAS China Institute of the University of London, told Nikkei.

“Group of 77 plus China”

If China unlocks Simandou’s reserves and drives a drop in international iron ore prices, “it could see selective commodity markets increasingly driven by intra-developing country dynamics,” Johnston said.

China would find such waters easier to navigate than having to do business with Quad member Australia.

Guinea is this year’s chair of the “Group of 77 plus China” at the United Nations. It is a grouping of 134 developing countries that form a large voting bloc China can depend on. Guinea has actively made statements on behalf of the group since assuming the chairmanship in January.

Johnston predicted that China would be pleased if progress on Simandou were achieved ahead of the Forum on China-Africa Cooperation. It is to be held in neighboring Senegal this year. It is the first time the Beijing-led gathering — held every three years — will be hosted by a West African country.

China is “preparing the pathway” to develop Simandou, with an expeditious 2025 timetable. That would seem stretched if you’re talking about a Western producer in Australia or Brazil. However, it is entirely plausible that China could be producing in that time frame.”


This article was originally published by NIKKEI ASIA

Iran and China Sign ‘Historic’ 25-Year $400 Billion Strategic Partnership Agreement

The signing ceremony came after years of intense behind-the-scenes negotiations. Chinese President Xi Jinping first proposing a draft version of a comprehensive agreement with Tehran during his 2016 visit to Iran

Iranian Foreign Minister Mohammad Javad Zarif and Chinese Foreign Minister Wang Yi signed the highly anticipated Iran-China Comprehensive Strategic Partnership agreement after more than five years of grueling talks.

The comprehensive agreement, signed in Tehran on Saturday, consists of 20 articles, and although details of the pact have yet to be provided, local media indicates that it likely covers everything from political and cultural ties to “security and defence” and “regional and international” cooperation.

The deal reportedly envisions increasing bilateral trade over 10-fold to $600 billion per year. It promises Iran Chinese investment of as much as $400 billion. Mainly into the Middle Eastern nation’s oil, gas, petrochemicals, renewable energy and nuclear energy infrastructure. Tehran is committing to becoming a major reliable source of energy for Beijing.

Bringing Iran into the grasp of Belt and Road infrastructure scheme

The accord also brings Iran into the grasp of Beijing’s Belt and Road infrastructure scheme. An ambitious scheme worth the equivalent of over $1 trillion. It is aiming to link China to Europe and Africa via a series of new land- and sea-based infrastructure projects across dozens of nations.

Iranian President Hassan Rouhani praised the signing of the agreement. He expressed gratitude to Beijing for its support for Tehran in the international arena in the face of unilateral US sanctions, including insofar as the Joint Comprehensive Plan of Action nuclear deal is concerned.

Rouhani went on to suggest that the US military presence in West Asia is the root cause of regional instability. He stressed the importance of collective efforts by regional parties to ensure regional security. Also including via Iran’s proposed Hormuz Peace Initiative mechanism.

Foreign Minister Zarif called the agreement a “historic 25-year strategic roadmap.” Then said he and Foreign Minister Wang had an “excellent exchange on expansion of global, regional and bilateral cooperation in the context of our comprehensive strategic partnership.”

“The nail in the coffin ending US imperialist hegemony over West Asia”

Wang echoed the Iranian officials’ sentiments, saying “relations between the two countries have now reached the level of strategic partnership.” Also that “China seeks to comprehensively improve relations with Iran.”

The foreign minister added that China’s ties with Tehran “will not be affected by the current situation, but will be permanent and strategic,” noting that “unlike some countries,” Iran “does not change its position because of a phone call.”

Independent investigative journalist Ben Norton called the deal “huge.” He characterized it as “the nail in the coffin ending US imperialist hegemony over West Asia.”

Bloomberg described the inking of the deal as a “challenge” to the Biden administration. As the latter works to “rally allies” against Beijing. “Iran’s closer integration with China may help shore up its economy against the impact of [US sanctions]. It is sending a clear signal to the Biden administration of Tehran’s intentions.”

A draft version of the agreement is thought to have been leaked by the New York Times last year. It is envisioning security cooperation, intelligence sharing, joint drills, and dramatically expanded economic ties. Tehran did not confirm the authenticity of the leaked document at the time. However it admitted that it was indeed negotiating a major 25-year strategic partnership agreement with Beijing.

After the Biden administration made clear that it would not lift sanctions and return to the nuclear deal unless Iran dramatically reduced its uranium enrichment activities, Iranian Supreme Leader Ali Khamenei announced that “the post-US era” had begun.

China turns to innovation as rare earth boom

The high demand for magnetic materials from makers of appliances and electric vehicles has helped drive a multi-faceted recovery for the sector, causing a rise in prices for rare earth – and enabling rare earth companies to undertake more research and development

 By Chris Gill

ATF) On Monday (March 1), a Ministry of Industry and Information Technology official publicly explained the phenomenon of China’s “rare earths being sold at the price of cabbages.” He also noted bluntly that Japan is worth studying to learn how to develop high-end rare earths, as their neighbour dominates the technologies for them. And that, China’s Science and Technology Daily said, is obvious to all in the industry.

Chairman Mao once famously said “seek truth from facts” due to historical reasons and other factors. And there is indeed a gap between China’s rare earth industry and developed countries, the paper noted. It said the gap is becoming more of a driving force, prompting China’s rare earth sector to continue to catch up and progress.

In Baotou, the paper said it saw a continuous vacuum casting furnace made by Showa Denko, and rented from Japan by Jinmenghui Magnetics company. “After introducing this production equipment, we have innovated again. In addition to the cooling process of the castings, the castings currently produced by the company are the best castings for processing neodymium iron boron magnets in the industry,” Sun Xiping, the person in charge of the company, said.

Development of the industry is advancing

China’s Rare Earth Industry Prosperity Index Report, compiled by the Xinhua Index division at China’s Economic Information Service, says in the fourth quarter of last year China’s rare earth industry rated 109.26 points, which is high. Six sub-indices on market performance, production and operation, employee status, inventory status, financing status and technological innovation are all above the prosperity line and in the “prosperity” range.

“In the sub-indices, the market performance scored the highest at 120.27 points. From the supply side, the domestic rare earth industry integration ended, Myanmar’s mixed rare earth carbonate imports fell, and the overall tight supply supported price increases.

“The high demand is for magnetic materials, and the multi-faceted recovery in demand has promoted the rise of rare earth prices,” according to analyst Huang Rong, who said Rare Earth Products Exchange, the increase in the proportion of domestic home appliances such as inverter air conditioners has promoted a rise in demand for magnetic materials, while the global new energy vehicles (NEV) will help maintain a high growth rate.

Technical innovation index

Those factors will drive a growth in demand for high-performance NdFeB. Mid-to-high-end magnetic material companies have fully resumed work and production. They continue to expand. Demand for replenishment has brought a linked increase in the price of light and heavy rare earths.

In addition, the technical innovation index was put at 108.11 points, which was also in the “prosperity” range. Compared with the third quarter, the score of this index rose by 2.23 points, an increase of 2.1%. Technological innovation indicators mainly investigate how companies expect to invest in science and technology research and development the first quarter of 2021.

According to Xinhua Index Division’s results, more than 70% of companies surveyed companies expect the first quarter of this year to have the same level of technological innovation as the last quarter of 2020. But 16% of them still expect to R&D investment will increase in this quarter, while 13.5% expect the number of R&D staff will also increase. More than half of these companies had patented technologies, and some had independently developed production equipment that accounted for more than 90% of all production equipment.

Rare earth technology innovation accumulates thinly

Yan Huizhong, a technical expert and senior engineer at Baotou Rare Earth Research Institute, said: “Regardless of innovation models, the key to transforming China’s rare earth resource advantages into economic gains lies in improving the level of rare earth applications. On the basis of continuing to play the role of promoting supply-side structural reforms, with the strength of the pulling effect of demand-side structural reforms, we strive to reach the downstream market and industry,” Yan said.

Their innovation aims to continuously expand the application of rare earths. And to stimulate the development of the rare earth industry with the demand of the domestic rare-earth value chain and manufacturing. China is hoping for a leap in development.

At present, the new high-capacity La-Y-Ni hydrogen storage material developed by Baotou Rare Earth Research Institute has an actual discharge capacity of 390 mAh/g. That exceeds the theoretical capacity of traditional LaNi5 hydrogen storage alloys and solves the problem of high-capacity La-Mg-.

The Ni-based hydrogen storage alloy is difficult to prepare. Coming up with a comprehensive performance to meet market demand and breakthrough foreign patent restrictions is a part of the effort.

Research and development

“We have independently developed a new generation of rare earth lanthanum, yttrium and nickel hydrogen storage materials, and have authorised invention patents in China, Japan, and the United States. We are stepping up efforts to develop industrial application technologies in response to market demand,” Yan Huizhong said.

The successful research and development of rare earth magnesium-nickel-based hydrogen storage alloy electrode materials also provides a variety of possibilities for the development of hydrogen storage materials. In 2017, a new rare earth hydrogen storage alloy production demonstration line with an annual output of 200 tonnes was completed at the Rare Earth Center.

“The production line completely relies on independent innovation and independent intellectual property rights in production technology. And, equipment and product design too. The product has been promoted and applied in many domestic power battery companies such as Corun, which has greatly promoted China’s high-tech industry, providing safety, easy recovery, technological progress and industrial competitiveness of water-based nickel-metal hydride power batteries.”

Steel for high-speed rail

The rapid development of domestic high-speed railways requires extremely high-end steel rails. The rare earth ferro-alloy additives they developed for rare earth steel have been tried out in domestic scientific research institutions and iron and steel enterprises. With good results, and the overall technology had reached the lead internationally.

In terms of medical treatments, Baotou Xibaobowei Medical System Co, has established an industry with an annual output of 100 magnetic resonance equipment in the research and development, production and service of rare earth permanent magnetic resonance imaging instruments. Chemical bases and large-scale R&D centres have continued to develop a variety of rare earth permanent magnetic resonance products with independent intellectual property rights that are suitable for popular use at the grassroots level, creating a national brand of large-scale medical equipment.

Yan Huizhong said the international division of labour in the industrial chain and globalisation of the economy was a major trend. Based on this, relying on innovation would gradually form a new development pattern with domestic and international cycles as the main body and mutual promotion of domestic and international cycles, and make better use of the international and domestic markets.

The rare earth industry could only achieve stronger and sustainable development with the blessing of science and technology.

How China won its war on poverty?

Documentary with Lawrence Robert Kuhn

When the history of the 21st century is to be written, there is no doubt that the story of China’s eradication of poverty – i.e. lifting about 700 million people out of it – will be seen as a milestone, a turning point for humanity.

China’s poverty rate fell from 88 per cent in 1981 to 0.7 per cent in 2015, as measured by the percentage of people living on the equivalent of US$1.90 or less per day in 2011 purchasing price parity terms.

On November 23rd 2020, China announced that it had eliminated absolute poverty nationwide by uplifting all of its citizens beyond its set ¥2,300 (CNY) per year, or less than a dollar per day poverty line.

This result has been achieved within just four decades, after Chinese leader Deng Xiaoping declared the Open Door Policy in December 1978.

Very few Western mainstream media have seen it fit to report this. We should wonder why.

US President Lyndon B. Johnson declared his war on poverty in 1964. At that time, the official poverty rate was about 15 per cent. 60 years later, it’s 12.3% – according to the US Census Bureau. These are national averages; poverty hits various social groups very differently. An interesting source here: “Approximately 16.4 million American children – 22 per cent of the population younger than 18 – live in poverty. The rate for people 65 and older is 8.7 per cent…”

At TFF we believe that China’s development – for good and for bad – is important for us all, for the world’s future and for a fair, broad-minded understanding of contemporary China. And that this speaks volumes about respect for human rights.

That’s why we give our visitors here a series of links (under the documentary) to more information. In this documentary, one of the most impressive Western connoisseurs of China, Lawrence Robert Kuhn, guides you to a broader understanding of the question that first comes to mind: How did the Chinese government and people go about achieving this amazing result?

 Jan Oberg, editor

This article was originally published by TRANSNATIONAL


On the other side we have “world’s only super-power” that has lost its own war on poverty (just as many other wars). United States declared unprovoked trade war (and even more fierce propaganda war) against China. It was all wrapped as something that “unpredictable” Donald Trump has done himself. As usual, that is not true. Here we have new president of US who is continuing exactly the same way.

According to US officials and numerous Think Tank organisations closely connected to American government and even their “deep state” – Chinese advance in technology or anything else is – challenge to America. They even claim it is targeting their “way of life” that they are forcing upon the rest of the world through their dominance in media, social media and Internet as a network itself.

Eurasia News Online


Biden sends warning to China on chips and rare earths

US President signs executive order for a review of supply chains for semiconductor chips, rare earth elements, pharmaceuticals and large batteries; said he would seek $37 billion to supercharge chip manufacturing in the US; gets bipartisan support for these efforts

(ATF) President Biden sent an effective warning to China on Wednesday February 24 as he signed an executive order for a review of supply chains that will cover semiconductor chips and rare earths.

Biden signed the executive order after a meeting with both Democratic and Republican politicians that he hailed as “like the old days” of agreeing on shared goals.

He did not mention China by name at the signing, but said: “We should not rely on a foreign country, especially one that does not share our interests or our values.”

Biden announced a 100-day review that will cover chips, rare earths, pharmaceuticals and the large capacity batteries that are key for electric vehicles. A broader one-year review will cover multiple other sectors including food production and technology.

The US President said he would seek $37 billion in funding for legislation to supercharge chip manufacturing in the United States as a shortfall of semiconductors has forced US automakers and other manufacturers to cut production.

“I’m directing senior officials in my administration to work with industrial leaders to identify solutions to the semiconductor shortfall,” Biden said on Wednesday. “Congress has authorised a bill but they need … $37 billion to make sure that we have this capacity. I’ll push for that as well.”

The executive order directs six sector reviews, modelled on the process used by the Defence Department to strengthen the defence industrial base. It will focus on defence, public health, communications technology, transportation, energy and food production. 

The United States has been besieged by supply shortages since the onset of the pandemic, which squeezed the availability of masks, gloves and other personal protective equipment, hurting frontline workers.

Most pressing issues

A global chip shortage is the most pressing issue for US firms, with some automakers forced to temporarily suspend work and industry trade groups relentlessly urging action from the government. China is also scrambling to source more chips for its own industrial needs.

Biden’s new national economic council director Brian Deese moved last week to secure a greater share of chip supply from Taiwan for the US, while Japan and European countries are also trying to increase their supplies. Any moves by foreign governments to forge closer ties with Taiwan will almost inevitably raise tensions with China.

Rare earths could emerge as the next most important point of stress between the US and China, however. An internal debate appears to be taking place within China over whether or not to try to use an ability to control the price of many rare earths to demonstrate goodwill towards the new Biden administration, or as a weapon in an ongoing conflict with the US.

Reports said Chinese government officials recently asked industry officials how badly companies in the US and Europe, including defence contractors, would be affected if China restricted rare earth exports during a bilateral dispute.

China has in the past had mixed success in trying to use its dominance of rare earth production as a geopolitical tool, as previous price rises encouraged creativity in rare earth mining in other countries and ended up reducing the overall global Chinese share in some metals.

“Critical minerals are an essential part of defence, high-tech, and other products. From rare earths in our electric motors and generators to the carbon fibre used for airplanes — the United States needs to ensure we are not dependent upon foreign sources or single points of failure in times of national emergency,” a White House statement said on Wednesday before Biden signed the new executive order.

China has increased production quotas for the start of this year, but rare earth prices renewed their upward drive after the end of the recent Lunar New Year holiday, indicating that underlying demand will remain the main market driver – regardless of whether US/Chinese tensions mount or ease.