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China will reach climate goal while West falls short

There has been constant low-level sniping in the West against China's record on climate change, in particular its expansion of coal mining, and its target of 2060 rather than 2050 for carbon zero. I have viewed this with mild if irritated amusement, because when it comes to results, then China, we can be sure, will deliver and most Western countries will fall short, probably well short. It is now becoming clear, however, that we will not have to wait much longer to judge their relative performances. The answer is already near at hand.

We now know that in 2023 China's share of renewable energy capacity reached about 50 percent of its total energy capacity. China is on track to shatter its target of installing 1200GW of solar and wind energy capacity by 2030, five years ahead of schedule. And international experts are forecasting that China's target of reaching peak CO2 emissions by 2030 will probably be achieved ahead of schedule, perhaps even by a matter of years.

Hitherto, China has advisedly spoken with a quiet voice about its climate targets, sensitive to the fact that it has become by far the world's largest CO2 emitter and aware that its own targets constituted a huge challenge. Now, however, it looks as if China's voice on global warming will carry an authority that no other nation will be able to compete with.

There is another angle to this. China is by far the biggest producer of green tech, notably EVs, and renewable energy, namely solar photovoltaics and wind energy. Increasingly China will be able to export these at steadily reducing prices to the rest of the world. The process has already begun. It leaves the West with what it already sees as a tricky problem. How can it become dependent on China for the supply of these crucial elements of a carbon-free economy when it is seeking to de-risk (EU) or decouple (US) its supply chains from China?

Climate change poses the greatest risk to humanity of all the issues we face today. There are growing fears that the 1.5-degree Celsius target for global warming will not be met. 2023 was the hottest year ever recorded. Few people are now unaware of the grave threat global warming poses to humanity. This requires the whole world to make common cause and accept this as our overarching priority.

Alas, the EU is already talking about introducing tariffs to make Chinese EVs more expensive. And it is making the same kind of noises about Chinese solar panels. The problem is this. Whether Europe likes it or not, it needs a plentiful supply of Chinese EVs and solar panels if it is to reduce its carbon emissions at the speed that the climate crisis requires. According to the International Energy Authority, China "deployed as much solar capacity last year as the entire world did in 2022 and is expected to add nearly four times more than the EU and five times more than the US from 2023-28." The IEA adds, "two-thirds of global wind manufacturing expansion planned for 2025 will occur in China, primarily for its domestic market." In other words, willy-nilly, the West desperately needs China's green tech products.

Knee-jerk protectionism demeans Europe; it is a petty and narrow-minded response to the greatest crisis humanity has ever faced. Instead of seeking to resist or obstruct Chinese green imports, it should cooperate with China and eagerly embrace its products. As a recent Financial Times editorial stated: "Beijing's green advances should be seen as positive for China, and for the world."

The climate crisis is now in the process of transforming the global political debate. Hitherto it seemed relatively disconnected. That period is coming to an end. China's dramatic breakthrough in new green technologies is offering hope not just to China, but to the whole world, because China will increasingly be able to supply both the developed and developing world with the green technology needed to meet their global targets. Or, to put it another way, it looks very much as if China's economic and technological prowess will play a crucial role in the global fight against climate change.

We should not be under any illusion about the kind of challenge humanity faces. We are now required to change the source of energy that powers our societies and economies. This is not new. It has happened before. But previously it was always a consequence of scientific and technological discoveries. Never before has humanity been required to make a conscious decision that, to ensure its own survival, it must adopt new sources of energy.

Such an unprecedented challenge will fundamentally transform our economies, societies, cultures, technologies, and the way we live our lives. It will also change the nature of geopolitics. The latter will operate according to a different paradigm, different choices, and different priorities. The process may have barely started, but it is beginning with a vengeance. Can the world rise to the challenge, or will it prioritize petty bickering over the vision needed to save humanity? On the front line, mundane as it might sound, are EVs, wind power, and solar photovoltaics.

The author is a visiting professor at the Institute of Modern International Relations at Tsinghua University and a senior fellow at the China Institute, Fudan University. Follow him on X @martjacques.

Nvidia H20 will sell 1 million units this year, contributing $12 billion in revenue!
Recently, according to the FT, citing the latest forecast data of the market research institute SemiAnalysis, AI chip giant NVIDIA will ship more than 1 million new NVIDIA H20 acceleration chips to the Chinese market this year, and it is expected that the cost of each chip is between $12,000 and $13,000. This is expected to generate more than $12 billion in revenue for Nvidia. Affected by the United States export control policy, Nvidia's advanced AI chip exports to China have been restricted, H20 is Nvidia based on H100 specifically for the Chinese market to launch the three "castration version" GPU among the strongest performance, but its AI performance is only less than 15% of H100, some performance is even less than the domestic Ascend 910B. When Nvidia launched the new H20 in the spring of this year, there were reports that due to the large castration of H20 performance, coupled with the high price, Chinese customers' interest in buying is insufficient, and they will turn more to choose China's domestic AI chips. Then there are rumors that Nvidia has lowered the price of the H20 in order to improve its competitiveness. However, the latest news shows that due to supply issues caused by the low yield of the Ascend 910B chip, Chinese manufacturers in the absence of supply and other better options, Nvidia H20 has started to attract new purchases from Chinese tech giants such as Baidu, Alibaba, Tencent and Bytedance. Analysts at both Morgan Stanley and SemiAnalysis said the H20 chip is now being shipped in bulk and is popular with Chinese customers, despite its performance degradation compared to chips Nvidia sells in the United States.
Autonomous driving is not so hot
From the perspective of the two major markets of the United States and China, the autonomous driving industry has fallen into a low tide in recent years. For example, last year, Cruise Origin, one of the twin stars of Silicon Valley autonomous driving companies and once valued at more than $30 billion, failed completely, its Robotaxi (driverless taxi) operation qualification was revoked, and autonomous driving models have been discontinued. However, as a new track with the deep integration of digital economy and real economy, automatic driving is a must answer: on the one hand, automatic driving will accelerate the process of technology commercialization and industrialization, and become an important part of the game of major powers; On the other hand, autonomous driving will also promote industrial transformation and upgrading by improving the mass travel service experience, seeking new engines for urban development, and injecting new vitality into the urban economy.
EV maker Lucid to recall over 5,200 Air luxury sedans for software error, US regulator says
July 9 (Reuters) - Lucid Group (LCID.O), opens new tab will recall about 5,251 of its 2022-2023 Air luxury sedans due to a software error that could cause a loss of power, according to a notice from the U.S. National Highway Traffic Safety Administration published on Tuesday. The regulator added the EV maker will also recall about 7,506 of its 2022-2024 Air luxury sedans due to an issue with a coolant heater that could fail to defrost the windshield. Lucid had released an over-the-air software update in June as a fix for the software error and a separate update to identify a high voltage coolant heater failure and provide a warning to the drivers of the affected vehicles. The company had reported second-quarter deliveries above market expectations on Monday, as price cuts helped boost demand for its luxury electric sedans.
Gold, silver caught in downdraft of broad commodity market sell off
(Kitco News) - Gold and silver prices are sharply lower in midday U.S. trading Monday, on heavy profit-taking from the shorter-term futures traders after recent good price advances. The selling pressure today across most of the raw commodity spectrum is also keeping the precious metals bulls on the sidelines to start the trading week. August gold was last down $37.50 at $2,360.10. September silver was down $0.849 at $30.85. U.S. stock indexes mixed but near their record highs scored last week. The rallying stock market is a bearish element for the gold and silver markets, from a competing asset class perspective. The key U.S. data points of the week include Fed Chairman Powell’s speeches to the U.S. Congress on Tuesday and Wednesday, and the consumer and producer price indexes on Thursday and Friday, respectively. The key outside markets today see the U.S. dollar index slightly higher. Nymex crude oil prices are lower and trading around $82.25 a barrel. The benchmark 10-year U.S. Treasury note yield is presently 4.288%. Technically, August gold bulls have the overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at the June high of $2,406.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,300.00. First resistance is seen at $2,382.60 and then at $2,400070. First support is seen at $2,350.00 and then at last week’s low of $2,327.40. Wyckoff's Market Rating: 6.0. September silver futures bulls have the overall near-term technical advantage. Silver bulls' next upside price objective is closing prices above solid technical resistance at the May high of $33.05. The next downside price objective for the bears is closing prices below solid support at the June low of $28.90. First resistance is seen at $31.00 and then at $31.50. Next support is seen at Friday’s low of $30.45 and then at $30.00. Wyckoff's Market Rating: 6.5. (Hey! My “Markets Front Burner” weekly email report is my best writing and analysis, I think, because I get to look ahead at the marketplace and do some market price forecasting. Plus, I’ll throw in an educational feature to move you up the ladder of trading/investing success. And it’s free! Email me at jim@jimwyckoff.com and I’ll add your email address to my Front Burner list.)
Record numbers of people are flying. So why are airlines’ profits plunging?
New York CNN — A record number of passengers are expected to pass through US airports this holiday travel week. You’d think this would be a great time to run an airline. You’d be wrong. Airlines face numerous problems, including higher costs, such as fuel, wages and interest rates. And problems at Boeing mean airlines have too few planes to expand routes to support a record numbers of flyers. Strong bookings can’t entirely offset that financial squeeze. The good news for passengers is they will be spared most of the problems hurting airlines’ bottom lines — at least in the near term. Airfares are driven far more by supply and demand, not their costs. But in the long run, the airlines’ difficulties could mean fewer airline routes, less passenger choice and ultimately a less pleasant flying experience. Profit squeeze Industry analysts expect airlines to report a drop of about $2 billion in profit, or 33%, when they report financial results for the April to June period this year. That would follow losses of nearly $800 million across the industry in the first quarter. Labor costs and jet fuel prices, the airlines’ two largest costs, are both sharply higher this year. Airline pilot unions just landed double-digit pay hikes to make up for years of stagnant wages; flight attendant unions now want comparable raises. Jet fuel prices are climbing because of higher demand in the summer. According to the International Air Transport Association’s jet fuel monitor, prices are up 1.4% in just the last week, and about 4% in the last month. Adding to the airlines’ problems is the crisis at Boeing, as well as the less-well-publicized problems with some of the jet engines on planes from rival Airbus. Since an Alaska Airlines Boeing 737 Max jet lost a door plug on a January 5 flight, leaving a gaping hole in the side of the plane 10 minutes after takeoff, the Federal Aviation Administration has limited how many jets Boeing can make over concerns about quality and safety. As a result, airlines have dramatically reduced plans to expand their fleets and replace older planes with more fuel efficient models. In some cases, airlines have asked pilots to take time off without pay, and carriers such as Southwest and United have announced pilot hiring freezes. In addition to the problems at Boeing, hundreds of the Airbus A220 and A320 family of jets globally have also been grounded for at least a month or more to deal with engine problems. Just about all the planes with those engines have been out of sevice for at least a few days to undergo examinations. And Airbus has also cut back the number of planes it expects to deliver to airlines this year because of supply chain problems. Problems for flyers For now, competition in the industry remains fierce: There are 6% more seats available this month compared to July of 2023, according to aviation analytics firm Cirium. And that’s helped to drive fares down — good news for passengers, but more bad news for airlines’ profits. Southwest announced in April that it would stop serving four airports to trim costs — Bellingham International Airport in Washington state, Cozumel International Airport in Mexico, Syracuse Hancock International Airport in New York and Houston’s George Bush Intercontinental Airport. Many more cities lost air service during the financial hard times of the pandemic. While upstart airlines are driving prices lower for travelers, those discount carriers might not survive long term. As the major carriers are making less money, many of the upstarts are flat-out losing money.