Video Infoblog; CHINA SHUTS DOWN All Cooperation With NETHERLANDS After U.S. Did THIS!
Transcript
the US government is highly concerned about China's Ambitions in microchip manufacturing however so far neither China nor the US has managed to get their hands on a crucial machine sold by this Dutch company now asml has a monopoly on the fabrication of euv lithography machines the most advanced type of lithography equipment that's needed to make every single Advanced processor chip that we use today and this company is one of the most extraordinary organizations in the world we are the only provider on the planet of this critical technology this Dutch company finds itself caught in a tug of war between the world's two largest economies the United States worried about China's technological advancements has been pressuring its allies to restrict the sale of semiconductor technology to Chinese firms the Netherlands home to asml has recently given into to this pressure on Monday a Beijing mouthpiece issued a stark warning asml risks permanently losing access to the Chinese market if it implements the latest us export curbs this isn't just diplomatic posturing it's a threat with serious economic implications the Dutch government has announced plans to stop asml from maintaining the Deep ultraviolet duv lithography machines it is already sold to China these machines while not asml most advanced are still critical for producing many types of semiconductors the government also intends to prevent asml from selling spare parts for these machines to China this decision didn't come out of nowhere it follows significant pressure from Washington which has been working to curtail China's access to Advanced semiconductor technology the US argues that these restrictions are necessary for National Security citing concerns about the potential military applications of advanced chips China's response to this development has been Swift and sharp the global times a state-backed newspaper warned of severe consequences if the Netherlands follows this strategy it will exacerbate the widening Rift in China us and China Netherlands relations the paper stated it went on to suggest that Beijing might impose trade restrictions or seek alternative suppliers and re-evaluate its cooperation with the Netherlands in more Global areas but China's potential retaliation doesn't stop there reports suggest that Chinese officials have privately warned Japanese companies that Beijing could cut off Japan's access to critical minerals essential for automotive production if Tokyo joins in on the semiconductor restrictions this threat carries weight China is a major supplier of rare Earth elements and other critical minerals used in everything from electric vehicle batteries to wind turbines A disruption in this Supply could have far-reaching consequences for Industries far beyond semiconductors the stakes for asml are enormous China represents a significant portion of the company's business in 2021 16% of asml sales worth around 2.2 billion went to China in the first half of this year China accounted for a whopping 49% of asml sales asml CEO Peter wenck has expressed concerns about the escalating restrictions speaking at a conference in New York he suggested that the US push to stop top asml from selling top chipm equipment to China has become increasingly economically motivated rather than purely about National Security I think to make the case that this is about National Security is getting harder and harder when in stated this situation highlights the complex interplay between National Security concerns economic interests and technological advancement the semiconductor industry once a realm of pure technological competition has become a battlefield for geopolitical influence the current restrictions primarily affect asml deep ultraviolet duv lithography systems these are not asml most advanced machines that distinction belongs to its extreme ultraviolet euv systems which have never been sold to China due to earlier restrictions however duv systems are still critical for producing a wide range of semiconductors including many used in IND industrial manufacturing around the globe from January 1st this year the Dutch government stopped granting licenses for the shipment to China of asml most advanced duv immersion lithography systems NXT 2000i NXT 205i and NXT 2100i and subsequent systems however Chinese chip makers can still purchase these machines from third countries while asml has to provide maintenance services and parts to them the impact of these curbs on China's chip sector could be significant as one Chongqing based it columnist guu stated if asml stops providing maintenance services and parts to China some duv lithography machines may have to stop working from next year those using multiple exposures to produce high-end chips will break down first China's response to these restrictions isn't just about maintaining access to asml current technology it's also about the future of China's domestic semiconductor industry Beijing has been pouring billions of dollars into developing its own chipm capabilities aiming to reduce its Reliance on foreign technology however without access to as sml's most advanced machines China faces significant hurdles in catching up to The Cutting Edge of semiconductor technology while Chinese companies like semiconductor manufacturing international corporation smic have made progress they still lag behind industry leaders like Taiwan semiconductor manufacturing company tsmc and Samsung tsmc cannot make its chips without a $150 million machine from a Dutch company called asml asml high-end equipment prints the tiny features that form the basis of tsmc's microchips microchips are made by building up billions of tiny transistors an asml machine pack patterns the finest lines on the microchips using a method called lithography the projection system shrinks and focuses the pattern onto a silicon wafer after the pattern is printed it moves the wafer slightly and makes another copy on the layer they are built up layer by layer like layering a cake except much more complicated because this involves up to 100 layers with nanometer Precision smic has reportedly been making seven nanometer semiconductor chips which are only generation behind the five nanometer ones manufactured by tsmc and Samsung however if Washington gets its way and even asml older lithography equipment is banned from China this progress could be severely hampered the restrictions on asml equipment could have far-reaching effects on the global semiconductor supply chain asml machines are used by all major chip manufacturers including tsmc Samsung and Intel any disruption in the the supply or maintenance of these machines could Ripple through the entire industry potentially affecting the production of everything from smartphones to cars moreover these restrictions could accelerate the fragmentation of the global semiconductor industry we might see the emergence of parallel Supply chains one centered around the US and its allies and another around China this could lead to increased costs reduced efficiency and potentially slower technological progress overall the US for its part maintains that these restrictions are necessary to prevent Advanced semiconductor technology from being used for military purposes the concept of dual use technology items that have both civilian and potential military applications is at the heart of this argument however China views these actions as part of a broader strategy by the US to maintain its technological dominance Chinese officials have repeatedly accused the US of using its influence over the global supply chain to stifle China's technological advancement the Netherlands caught between these two economic Giants faces a difficult balancing act on one hand asml is a Crown Jewel of the Dutch economy and restricting its ability to sell to China could have significant Economic Consequences on the other hand the Netherlands is a close Ally of the US and is under considerable pressure pressure to align its policies with Washington's strategic interests Dutch prime minister dick scof has acknowledged this dilemma we are in talks good talks and we are also watching out very specifically for the economic interests of asml those need to be weighed against other risks and the economic interests are extremely important schof stated he added asml is for the Netherlands an extremely important Innovative industry that should not suffer under any circumstance ances because that would damage asml Global position China's threatened retaliation goes beyond just the semiconductor industry Beijing has hinted at broader economic measures including potential restrictions on Rare Earth exports China dominates the global supply of these critical materials which are essential for many high-tech products any disruption to this Supply could have far-reaching consequences for Industries worldwide moreover China has already taken retaliatory steps in 2023 it imposed restrictions on the exports of gallium germanium and graphite materials crucial for Semiconductor manufacturing this move was widely seen as a response to earlier us chip export controls the Biden Administration has been particularly aggressive in its efforts to curb China's semiconductor progress in addition to pressuring allies like the Netherlands and Japan to impose restrictions the US has also been building a power known as the foreign direct product rule or fdpr this rule allows Washington to control sales of products made anywhere in the world provided they use even the smallest amount of American Technology while the US has so far refrained from invoking the fdpr against key allies like Japan and the Netherlands the threat of its use has been a powerful tool in negotiations a senior us Administration official stated that while they would prefer to reach a diplomatic solution they would not rule the use of fdpr asml and Tokyo electron have both posted large sales increases in China since the US imposed its initial rules us firms including Applied Materials lamb research and K have also continued to sell large amounts of gear to China as businesses there stockpile less Advanced Equipment in an effort to get ahead of potential new US restrictions a senior Us official downplayed the impact of this stockpiling saying if pertains only to less Advanced Machinery and that beijing's ability to innovate has been severely hampered by a lack of access to cuttingedge tools China's long-term strategy in response to these restrictions will likely involve a combination of diplomatic economic and technological measures on the Diplomatic front Beijing will continue to pressure its allies to oppose us-led sanctions emphasizing the potential economic benefits of closer cooperation with China on the economic front China May seek to impose its own counter measures targeting foreign companies that rely on the Chinese market and on the technological front China will likely double down on its efforts to develop its own semiconductor Technologies reducing its Reliance on foreign suppliers like asml as a Reddit user pointed out this is a little different as you can't easily replicate what asml has even with an almost unlimited supply of money so China stands more to lose this just shows how critical for National Security of everyone the semiconductor sector has become for asml the path forward is fraught with challenges the company must balance its business interests with geopolitical realities all while continuing to push the boundaries of what's possible in semiconductor manufacturing as asml CEO Peter wenink stated most probably there will be more pressure for restrictions but I also think there will be more push back and I think we have to hope reach a certain equilibrium because as a business what we all want is a bit of clarity a bit of stability the global times piece said that while China remained a lagered in advanced chip technology the country will double its efforts to fully resolve the technical issues of high-end chip production for those companies that follow the US in containing China it will be challenging to return once they lose the Chinese market China just shocked the US Military and tech companies by tightening its grip on antimony a rare metal essential for High-Tech weapons Electronics solar photovoltaic components telecomunications petrochemicals vehicles and Aerospace in this episode China has issued a ban that could all us high-tech weapons starting on 15 September China will impose strong export curves on antimony animon is an element and its most common use today is in fire suppression and prevention but it also has widespread military uses if something is considered dual use it means it can be used in civilian and a military sector on Thursday China's Ministry of Commerce and the general administration of Customs jointly announced their decision to impose export controls on antimony and related items this measure set to take effect from September 15 2024 aims to protect China's national security interests and fulfill its International nonproliferation obligations responding to Media inquiries about the new restrictions a mofcom spokesperson stated implementing export controls on antimony super hard materials and related items is an internationally accepted practice the spokesperson emphasized that China is following International norms and implementing these controls based on its own needs to safeguard National Security and meet non-proliferation commitments to understand the gravity of this decision it's crucial to look into the nature and ation of antimony antimony is an important non-renewable resource that finds widespread use across various Industries it plays a crucial role in electronics solar photovoltaic components telecommunications petrochemicals Vehicles Aerospace and Military applications the uses of antimony are diverse and critical approximately 50% of global antimony usage is inflame retardants making it an essential component in fire safety for a wide range of products another 20% goes into photovoltaic glass for solar cells highlighting its importance in the renewable energy sector the metal is also essential in lead acid batteries which are still widely used in vehicles and backup Power Systems however it's in the defense sector where antimony truly shows its strategic value antimony is a critical component in the production of infrared missiles playing a key role in guidance systems it's also used in the manufacturer of nuclear weapons though the specifics of this application are closely guarded night vision goggles which give modern militaries a significant advantage in low light conditions rely on antimony for their functionality perhaps most crucially antimony is an essential ingredient in armor-piercing ammunition and military grade armor directly impacting both offensive and defensive capabilities of armed forces the mining and production of antimony primarily involve the extraction of stibnite ore site a sulfide mineral is the most common source of antimony The Ore is typically mined through underground methods though some surface mining does occur antimony can also be obtained as a byproduct of gold mining which has historically been a significant Source in some regions additionally recycling lead acid batteries is another source of antimony China's new restrictions cover several animony products casting a wide net over the industry the controls apply to animony ore the raw material from which the metal is extracted they also cover animony ingots which are the purified form of the metal used in various manufacturing processes antimony oxide a compound used in flame retardants and other applications is also subject to the new regulations perhaps most significantly there's a ban on exporting gold antimony smelting and separation technology without permission which could hinder other countries abilities to process antimony even if they can Source the raw materials under the new rules exporters will now be required to obtain an export license this process process adds a layer of scrutiny and control over the flow of antimony out of China the mofcom will review application documents upon receipt and make an assessment in conjunction with relevant departments before either granting or denying a license within a designated time frame the mofcom spokesperson clarified that the policy does not Target any specific country or region exports that comply with the relevant regulations will still be permitted the spokesperson stated the Chinese government is committed to maintaining world peace and Regional stability ensuring the security of global industrial and Supply chains and promoting compliant trade development he wean a senior fellow at the center for China and globalization provided insight into the Strategic rationale behind the restrictions he told the global times some rare minerals are related to National Security because they have dual use applications serving both military and civilian purposes he added that implementing these restrictions is necessary to ensure China's national security and fulfill its International responsibilities China's dominance in the antimony Market cannot be overlooked in 2023 the country accounted for 48% of global mine production making it by far the world's largest producer this dominance extends Beyond just mining China is also the leading exporter of processed antimony controlling a significant portion of the value chain within China antimony reserves are concentrated in the provinces of Guang Shi Hunan and Gansu these regions have long histories of antimony Mining and have developed significant expertise in extraction and processing despite its large production it's worth noting that China remains a net importer of antimony concentrates highlighting the country's massive demand for the metal and its Central role in global antimony trade flows in the global antimony supply chain other major producers play significant but small smaller roles Tajikistan stands out as the second largest producer accounting for 25% of Global Production Russia was once a major exporter but has seen a decline in its antimony Supply in recent years this decline in Russian exports has further Consolidated China's position in the market one of the key issues in the global antimony Market is the limited processing capacity outside of China this bottleneck in the supply chain means that even countries with antimony reserves often rely on China for processing creating a form of resource dependency that extends Beyond mere ownership of Minds the global antimony Market was already facing challenges before China's announcement in May 2024 the market was experiencing a supply deficit estimated at 10,000 tons this existing shortage set the stage for the dramatic Market reactions that followed China's export control announcement the immediate effects of China's export controls on the antimony Market were significant prices reached record highs with Chinese antimony trading at an all-time high of 162,00 Yuan or 22657 24 per ton on the Shanghai Metal Exchange further price increases are predicted by industry analysts with some suggesting prices could climb another $88,000 per ton to reach $30,000 in the near future the stock prices of Chinese antimony producers surged in response to the news companies like Hunan gold Tibet huou Mining and Guang XI huashi non feros saw their share prices rise by between 66% and 93% year-to date in 2024 this stock market reaction reflects investors expectations of increased profitability for these firms under the new export control regime the United States finds itself in a particularly vulnerable position regarding antimony Supply the country is not engaged in domestic antimony mining since 2001 when the last us antimony mine closed this leaves the US heavily reliant on Imports with a staggering 63% of its antimony coming from China in recent years this dependence is especially concerning given antimony's strategic importance for the US defense industry the Metal's crucial role in various Weapons Systems and Military Technologies means that any disruption to supply could have serious implications for US military Readiness and technological Edge in response to this situation there have been efforts to restart domestic antimony production in the United States perpetual resources has proposed a project in Idaho to revive antimony mining this initiative has gained support from the Pentagon reflecting the defense Department's recognition of the Strategic importance of securing a domestic antimony Supply perpetua resources project located at the site of the historic STI Knight mine aims to produce antimony as a a byproduct of gold mining the company has ambitious plans with production scheduled to begin by 2028 if successful this project could significantly reduce us Reliance on foreign antimony sources following China's announcement of export controls perpetua resources saw a significant surge in its stock price shares jumped as much as 19% to levels not seen in 3 years reflecting Market expectations for increased domestic production and the company's potential strategic importance the global reaction to China's export controls has been one of concern particularly regarding potential supply chain disruptions there are worries about the impact on us and European militaries given antimony's crucial role in defense Technologies these new restrictions are being compared to China's previous export controls on other materials such as gallium and germanium which were announced in 2023 and have already had significant impacts on global technology Supply chains Joe Mi a senior research fellow at the Chinese Academy of international trade and economic cooperation provided context for China's decision he told the global times export controls are a common International practice and this approach is consistent with previous measures on certain raw materials these materials are not banned from export rather their destinations and potential impacts must be carefully assessed and analyzed in line with International Norms Joe added the controls stem from security concerns as some elements may be misused by certain countries or regions threatening global stability the aim is to address gaps in international trade while enhancing China's security measures the US Congress has responded to this vulnerability by asking the Pentagon to strengthen strategic reserves of critical minerals with antimony being a top priority for the National Defense stockpile the US House armed services committee has expressed concern about potential supply chain disruptions from both Russia and China in a recent report the committee urged the Department of Defense to develop policies for recycling used batteries to recover precious metals Rare Earth elements and other strategically important materials China's statement on export controls highlighted that a key rationale is to prevent the proliferation of nuclear biological and chemical weapons aligning with its long-standing efforts to fulfill nonproliferation obligations this follows the expansion of nuclear arms control talks with the US in April prompted by Washington's arm sales to Taiwan given the size of the US nuclear Arsenal China can impose significant constraints by limiting access to key materials essential for production this move represents a shift from China's previously more open approach to supplying critical materials to the US while high-tech weapons rely heavily on rare metals and resources antimony also has important applications in the field of biology and Medicine antimonate based drugs such as mumin antimonate are considered the primary treatment for leash manases an infectious disease caused by parasites I have tremendous respect for president shei but we have a trade deficit it is the largest deficit of any country in the history of our world it's out of control you know look if there was going to be a trade War I can tell you jica the markets wouldn't really like it China's Industrial Revolution is in full swing and US companies are feeling the heat from EVS to semiconductors to aircraft 5G and commerce China's rise is shaking the foundations of American industry will the US be able to keep up or is this the beginning of a new world order in global business can you just lay out kind of the state of play right now amidst this kind of global competition that we're seeing uh supply chain resilience matters this remains a product in performance industry and this remains an industry where if you have the best product if you have the best technology your customers going to buy it the part of your survey also includes um asking Chinese companies how they how they feel about what's going on how do they feel uh so Chinese companies believe the future is bright they're going to see growth they don't see margins clap they say Automotive electrification which are markets where China has more Downstream industry control and a larger percentage of the global Tam they actually still have a tremendous amount of respect for the United States ecosystem Chinese semiconductor companies can go Global one is a Chinese box or Chinese car that's made with Chinese Chips can go be sold overseas and you see that in the automotive SP how far can decoupling go it it can never fully decouple because there isn't enough money and time and capital in the world to create two separate Supply Chains It's just Aviation comac ma c919 versus Boeing 737 Max 8 starting off with the commercial aircraft Corporation of China has developed the c919 narrow body jet aiming to challenge the long-standing dominance of Boeing and Airbus in the commercial Aviation Market established in 2008 comac represents China's ambition to reduce its Reliance on Western manufacturers and establish itself as a major player in the global Aerospace industry the c919 and Boeing 737 Max 8 share similar characteristics in terms of size and passenger capacity both aircraft are designed to seat between 158 and 168 passengers in a typical two-class configuration notably both planes utilize CFM leap engines highlighting the ongoing dependence on Western technology in certain critical areas of aircraft design comac faces several significant challenges in its pursuit of market share the c919 relies heavily on Western components for critical systems including avionics and engines additionally there are ongoing concerns over intellectual property protection with some Western companies hesitant to share Advanced Technologies with Chinese Partners geopolitical tensions have also impacted comac's progress in 2020 the US government added comac to a list of companies with alleged military ties potentially limiting its access to American Technology and component on Boeing despite its established position faces its own set of challenges in the Chinese market the grounding of the 737 Max following two fatal crashes in 2018 and 2019 severely damaged Boeing's reputation and Market position the company has struggled to regain trust and market share particularly in China where regulatory approval for the 737 Max to resume flying has been slow to materialize the future outlook for both companies remains uncertain comac aims to dominate The Domestic Chinese market leveraging government support and a vast potential customer base the company has secured hundreds of orders for the c919 primarily from Chinese Airlines and leasing companies electric vehicles byd versus Ford byd short for build your dreams has emerged as a major player in the global EV Market challenging traditional automakers like Ford and Tesla founded in 19 1995 as a battery manufacturer byd has leveraged its expertise in energy storage to become a leading EV producer surpassing many established automakers in sales volumes to see byd's rapid growth in China just look at retail sales charts byd which is backed by Warren Buffett jumped from 13th Place in 2021 to the top spot in 2022 in 2022 byd sold over 1.85 million new energy vehicles including both pure electric and plug-in hybrid models that's some half a million more cars than Tesla this remarkable growth represents a year on-year increase of 28.6% highlighting the company's rapid Ascent in the EV Market in comparison Ford sold approximately 61575 EVS in the same year demonstrating the significant gap between the two companies in terms of EV sales volume byd's success can be attributed to several key factors the company's vertical integration strategy allows it to produce many critical components inhouse including batteries Motors and electronic controls this approach gives byd greater control over its supply chain and costs enabling it to offer competitive pricing across its product range the company's diverse product lineup spans from affordable models like the byd dolphin priced at around $155,000 in China to premium offerings such as the Han sedan which competes with Tesla's Model S this broad range allows byd to cater to various market segments and consumer preferences Ford a legacy American automaker with over A Century Of History is investing heavily in its EV transition the company has committed to investing more than $50 billion in EVS through 2026 aiming to produce 2 million EVS annually by the end of 2026 Ford strengths lie in its established brand recognition Global dealer Network and expert piece in mass production and Supply Chain management in terms of Battery Technology byd has focused on developing and producing lithium iron phosphate batteries which offer lower costs and improved safety compared to traditional lithium ion batteries the company's blade battery introduced in 2020 has gained recognition for its innovative design and Performance Ford like many Western automakers has primarily used nickel Cobalt manganese batteries but is exploring lfp options for entry-level models to reduce costs and improve affordability byd's Global expansion plans include entering European markets with the company launching several models in countries such as Norway Germany and the UK the company has also made inroads in Southeast Asia and Latin America Ford leveraging its existing Global presence aims to accelerate EV adoption worldwide with a particular focus on its Home Market in North America and key European markets semi semiconductors smic versus Intel semiconductor manufacturing international corporation is China's largest and most advanced chip manufacturer spearheading the country's efforts to achieve semiconductor self-sufficiency founded in 2000 smic has made significant strides in recent years narrowing the technological Gap with global leaders like Intel smic has reported progress in developing advanced process nodes including 14 nanometers and 7 nanometers technology IES in 2022 the company announced that it had begun mass production of 14 nanom chips a significant milestone in its technological advancement while still behind the Leading Edge processes of companies like tsmc and Samsung smic's progress represents a major achievement for China's semiconductor industry the company has significantly increased its investment in research and development with R&D expenses reaching $766 million in 202 1 a 39.5% increase from the previous year this substantial investment reflects smic's commitment to advancing its technological capabilities and reducing the Gap with global leaders Intel a long-standing leader in the semiconductor industry faces challenges in maintaining its technological Edge the company has experienced delays in advancing to smaller process nodes particularly in its transition to 7 nanometers technology these setbacks have allowed competitors like tsmc and Samsung to gain ground in the contract manufacturing space telecommunications Huawei versus Cisco huawe has emerged as a global leader in telecommunications equipment particularly in 5G technology the company's rapid growth and technological advancements have positioned it as a major competitor to established players like Cisco huawei's rise in the telecomunications sector has been nothing short of remarkable with the company becoming the world's largest Tel equipment manufacturer in 2012 and maintaining a strong position since then huawei's strengths in the Telecommunications Market are manifold the company has made extensive investments in research and development with R&D expenses reaching $22.1 billion in 2021 representing 22.4% of its total revenue this significant investment has allowed Huawei to develop cuttingedge Technologies in 5G cloud computing and artificial intelligence the company's 5G equipment has gained traction globally due to its competitive pricing and comprehensive product offerings Huawei has secured numerous 5G contracts worldwide particularly in Emerging Markets across Asia Africa and Latin America as of 2021 Huawei had signed more than 3,000 5G commercial contracts globally demonstrating its strong Market position Cisco a long-standing leader in networking equipment faces challenges in the evolving telecommunications landscape the company has been working to accelerate its 5G product development to compete with Huawei and other rivals in 2021 Cisco announced its internet for the future strategy which includes significant investments in Silicon Optics and software to address the growing demand for 5G and Next Generation networks however Cisco faces pressure on profit margins due to increased competition particularly from Chinese vendor offering lower priced Alternatives the company's networking infrastructure business which includes routing switching and wireless products has experienced slower growth in recent years e-commerce jd.com versus Amazon jd.com has established itself as a major e-commerce player in China and is expanding its presence globally putting it in direct competition with Amazon in several markets founded in 1998 jd.com has grown to become China's largest online retail by Revenue with a market capitalization exceeding $100 billion as of 2023 jd.com quot s success can be attributed to several key strengths the company has developed an advanced Logistics network with a high degree of automation allowing for fast and efficient delivery services as of 2022 jd.com operated over 1,600 warehouses across China covering more than 23 million square meters of floor space the company's automated warehouses and delivery drones have set new standards for e-commerce Logistics jd.com has also been at the Forefront of integrating online and offline retail experiences the company's Omni channel strategy includes Partnerships with traditional retailers and the development of its own brick and mortar stores such as its unmanned convenience stores and seven fresh supermarkets Amazon while dominant in many Western markets faces significant challenges in its global expansion efforts the company's attempts to penetrate the Chinese market have largely failed with Amazon shutting down its domestic e-commerce business in China in 2019 this Retreat highlights the difficulties foreign companies face in competing with local Giants in the Chinese market artificial intelligence sense time versus Google sense time a Chinese AI company founded in 2014 has gained prominence in computer vision and deep learning applications positioning itself as a competitor to Global AI leaders like Google the company's rapid growth and technological advancements have made it one of the world's most valuable AI startups with a valuation exceeding $7.5 billion as of its 2021 IPO sense time strengths lie in its expertise in facial recognition and image analysis Technologies the company's AI algorithms have found applications in various sectors including smart cities autonomous driving and mobile devices sense time claimed that its facial recognition technology has an accuracy rate of 99.8% surpassing human level performance in many scenarios renewable energy jeno solar versus first solar jeno solar a Chinese solar panel manufacturer founded in 2006 has become one of the world's largest producers of photovoltaic modules the company's growth and technological advancements have positioned it as a major competitor to established players like First Solar challenging the traditional dominance of Western firms in the solar energy sector the company has demonstrated a commitment to continuous innovation in solar cell efficiency in 2021 jeno solar achieved a record-breaking solar cell efficiency of 25.25% for its large area nype monocrystalline silicon solar cell showcasing its technological prowess the company has also made strides in developing Advanced module Technologies such as by facial modules and half cell designs to improve overall system performance jeno solar has established a strong presence in both domestic and international markets in 2022 the company shipped approximately 44.5 GW of solar modules globally with International markets accounting for about 80% of its total shipments Russia and China are in discussions about a$1 13 billion oil and gas pipeline project Mongolia initially proposed proposed as a Transit country for the pipeline May no longer be needed instead there's growing speculation that the route could shift to pass through Kazakhstan this potential change has raised eyebrows and left people wondering why is China hesitant about the Mongolian route what is the current status of the project and how could this new route enhance Russian exports the invasion of Ukraine has had severe consequences for Russia's gas exports to Europe since the conflict began these exports have plummeted resulting in an annual loss of approximately $150 billion for Russia this enormous Financial blow has forced Russia to look Eastward for new buyers with China being the primary target however Russia faces significant challenges in this pivot towards Asia one of the main obstacles is Russia's lack of liquefied natural gas LNG infrastructure LNG facilities allow natural gas to be cooled and compressed into a liquid form with can then be transported by ships to markets around the world without adequate LNG infrastructure Russia's ability to export gas to distant markets is severely limited in a bid to address this issue and secure new export routes Russian President Vladimir Putin recently visited China to discuss the power of Siberia 2 project despite Russia's eagerness to seal the deal China has shown a surprising lack of enthusiasm this tepid response from China has raised questions about the Project's VI ility and the future of Russia China energy cooperation yeah I'm I'm happy to start so you know there is a lot of enthusiasm I think right now in Russia and in Mongolia for routing the power of Siberia to pipeline through Mongolia um I think that right now that there's not an equal amount of enthusiasm in China One you know they don't need this gas right away uh and two I think there are concerns about ing this pipeline through a third country that isn't supplying natural gas to China um you know obviously you know the more countries you route a pipeline through the more chances there are for things to um you know disrupt the flow of gas you know intentional or accidental so I'll leave it at that okay anybody else want to pop in on that one to understand the context of this new pipeline proposal we need to examine China's current natural gas demand and sources in 2022 natural gas accounted for 9% of China's total energy consumption this might not seem like a large percentage but given the size of China's economy it represents a significant amount of gas moreover China has set an ambitious Target to increase this share to 15% by 2030 as part of its efforts to reduce carbon emissions and improve air quality thank you um happy to address all of those topics um so I'll start with the role of natural gas in China's Energy Mix uh last year natural gas accounted for almost 9% of China's total energy consumption and that compares to 24% for the world as a whole uh China would like to increase the role of natural gas in its energy consumption mix uh both to reduce air pollution and to combat climate change uh the government has a target of increasing the share of natural gas to 15% of the energy mix by 2030 China's growing appetite for natural gas necessitates increased Imports currently China sources its natural gas through a combination of pipeline Imports and LG shipments the country has existing pipeline connections with several neighboring countries including Turkmenistan Russia and Myanmar additionally China receives LNG from various Global suppliers allowing it to diversify its sources of natural gas uh the main play in Central Asia in gas is turkistan and turkistan pumping gas to China um Eric already mentioned the fourth P pipeline the pipeline d uh to increase uh the supply of gas uh to China I think last year about 35% of natural gas Imports were pipeline gas so Russia Central Asia Myanmar um other 65% are LNG um and if you look at you know China's gas suppliers as a whole I think 77% of China's natural gas Imports last year came from um just six countries but they nicely sort of illustrate this diversity of suppliers and routes so we have you know Australia and turkistan and Russia and the United States um and Malaysia and Qatar um and you know earlier this year there were reports of Chinese companies Chinese National oil companies negotiating with Qatar forecasts of China's gas demand through 2030 and 2040 show a potential Supply gap which Russia hopes to fill with the power of Siberia 2 pipeline however the situation is complicated by China's existing import commitments and the uncertain trajectory of its future demand these factors make it challenging to predict exactly how much additional gas China will need and when let's take a closer look at China's current gas pipeline infrastructure the country has three major pipelines from Turkmenistan known as a b and c these pipelines were constructed between 2008 and 2014 at a combined cost of approximately $14 billion together they currently Supply 55 billion cubic met of gas annually to China there are plans to increase this capacity to 85 BCM in the next 3 years reflecting China's growing demand for natural gas the power of Siberia one pipeline connecting Russia to China became operational in 2019 this massive infrastructure project spans 3,000 km and cost an estimated $55 billion to construct in 2023 it delivered 22 BCM of natural gas to China the pipeline's capacity is expected to increase gradually with projections to reach a maximum capacity of 38 BCM by 2027 China also receives gas from Myanmar through a pipeline constructed in 2013 this pipeline was designed to deliver 12 BCM of gas per year however it currently operates at only onethird of its capacity due to various operational issues despite these challenges the pipeline remains an important part of China's gas import infrastructure the proposed power of Siberia 2 pipeline would take a different route from its predecessor while power of Siberia 1 travels through Eastern Siberia and enters China in its Northeastern region power of Siberia 2 would pass through Mongolia to reach China this route presents both opportunities and challenges the estimated cost of the power of Siberia 2 project is $13.6 billion this is a significant investment especially considering the current geopolitical tensions and economic uncertainties the high cost raises questions about funding and economic viability particularly given China's apparent hesitation the pipeline's proposed route through Mongolia introduces additional political risks agreements must be reached not only between Russia and China but also with Mongolia for Transit rights this adds complexity to the negotiations and potential vulnerabilities to the gas supply chain any future political tensions between these countries could potentially disrupt gas flows however recent discussions about this project have hit some unexpected complications China it turns out isn't too keen on the pipeline passing through Mongolia instead they're pushing for a route through Kazakhstan there are several reasons for this potential change firstly China has expressed concerns about mongolia's growing alliance with the United States Mongolia has been strengthening its ties with the US in recent years signing a strategic partnership in 2019 and participating in joint military exercises this closer relationship between Mongolia and the US has raised eyebrows in Beijing as China is wary of increased American influence in the region Kazakhstan on the other hand presents several advantages as a Transit country it already has experience with oil and gas pipelines including those connecting to China the Kazakhstan China oil pipeline operational since 2006 and the central Asia China gas pipeline which passes through Kazakhstan demonstrate the country's existing energy infrastructure links with China moreover kazakhstan's political landscape may be seen as more stable and predictable from China's perspective while Kazakhstan has its own challenges it has maintained relatively balanced relations with both Russia and China potentially making it a less risky Transit option the Kazakhstan route would also be Shor than the Mongolia route potentially reducing construction costs and transit times this could make the project more economically viable an important consideration given the estimated 13 to 15 billion price tag Chris weaer CEO of Eurasia based strategic consultancy macro advisory said using the khaak route where the cost of repair and upgrade will be considerably less than power of Siberia 2 is a much more attractive option and one which appears to be acceptable to Beijing he further added they share a long Common border and the old Soviet infrastructure is repairable to allow more gas via Kazakhstan selling at a price lower than it gets from Europe and turkey is an acceptable cost to expand volumes and infrastructure while natural gas remains a key part of China's energy strategy the country is also exploring Alternatives China has shown significant interest in hydrogen as a future energy source particularly green hydrogen produced using renewable electricity hydrogen production methods are categorized as gray blue or green gray hydrogen is produced from fossil fuels without capturing the resulting CO2 emissions this is currently the most common and cheapest method of hydrogen production but it's also the most environmentally damaging blue hydrogen uses fossil fuels but captures and stores the CO2 making it more environmentally friendly than gray hydrogen but still not entirely clean green hydrogen produced using renewable electricity to split water molecules is the most environmentally friendly option but currently the most expensive to produce China recently announced a massive $45 billion investment in green hydrogen development signaling its strong commitment to this technology this move could potentially impact future natural gas demand as hydrogen could replace natural gas in some applications particularly in industrial processes and transportation Russia's desperate need for new gas export routes contrasts sharply with China's lack of urgency this imbalance in negotiating positions could significantly impact the final terms of any deal Russia currently holds about 24% of the world's proven natural gas reserves making it the country with the largest gas reserves globally however these vast reserves are of little value if Russia cannot get the gas to Market it's worth no cting that the power of Siberia 2 project is not just about natural gas recent statements from Russian officials suggest that the pipeline could also be used to transport oil Russian President Vladimir Putin stated moreover it's possible to lay both a gas pipeline and an oil pipeline in the same Corridor this dual use potential could make the project more attractive economically the geopolitical implications of the power of Siberia 2 project extend beyond just Russia and China the United States which has been promoting its own LNG exports to Asia is likely watching these developments closely increased energy ties between Russia and China could potentially challenge US influence in the region despite all the challenges Russia remains optimistic about the project Alexander Novak Russia's Deputy Prime Minister has stated that they expect to sign a contract for power of Siberia 2 soon the negotiations surrounding the power of Siberia 2 project are intricate with pricing being a key point of discussion despite these complexities Putin remains confident in the Project's potential he emphasized that China's expanding economy has a growing need for energy resources and he positioned Russia as the most Dependable supplier to meet this demand Putin also highlighted the Project's resilience against potential Western interference he asserted that the deal would be structured in a way that makes it impervious to sanctions whether they target shipping fleets or financial institutions Putin stated nobody can get in the way of this neither sanctions on tanker fleets or even sanctions on financial institutions we will buy and sell everything in our national currencies so the interest from both sides is confirmed by conducting transactions in their National currencies Russia and China aim to circumvent potential Financial restrictions this approach according to Putin underscores the mutual interest and commitment of both Nations to the project Russia has long been a major player in the natural gas export Market with Europe as its primary customer but a new agreement between Russia and China caught the world's attention this wasn't just any deal it was a massive $1 13 billion investment in a 2,600 kilometer pipeline project the original plan was ambitious start construction in 2024 and complete the entire project in Just 4 years however recent discussions about this project have hit some unexpected complications China it turns out isn't too keen on the pipeline passing through Mongolia instead they're pushing for a route through Kazakhstan this change has raised eyebrows and left people wondering why is China hesitant about the Mongolian route and how's the project progressing now to understand the sign ific of this project let's look into Russia's natural gas resources the Siberian plane is loaded with natural gas in 2011 Siberia was producing 40% of Russia's total natural gas output that's an enormous amount of gas but getting that gas from Siberia to where it needs to go isn't cheap the transportation costs are a real challenge for Russia this is where China comes into the picture in 2015 China and Russia shook hands on something called the Far East Route memorandum this led to the development of the Siberia 1 natural gas pipeline which started pumping gas to China in 2019 currently it's sending about 15 billion cubic meters of gas to China each year but that's just the beginning they're planning to ramp that up to 38 billion cubic meters by 2027 with this pipeline Russia has become one of China's primary suppliers for natural gas and China needs a lot of gas in 2021 China's natural gas consumption hit a staggering 390 billion cubic met that's a 7.6% increase from the previous year out of that total about 100 billion cubic meters came from Russia approximately one-third of China's total consumption looking ahead China's national energy Administration predicts even greater demand they forecasting consumption to reach between 420 and 425 billion cubic M by 2024 with numbers like these it's clear why China and Russia are discussing the construction of another pipeline enter the Siberia number D2 pipeline project the plan involves investing $13 billion in this massive project the pipeline would start in tuman Russia cross through Mongolia and end up in Eastern China we're talking about a 2600 km pipeline here to break it down about 900 km would be in Mongolia 100 km in Russia and, 1600 km in China originally they plan to start building in 2024 and finish by 2028 if everything went according to plan the pipeline would be operational around 2030 this pipeline could deliver up to 50 billion cubic meters of natural gas to China every year this project could be a win to win for both China and Russia for China it means a more stable supply of natural gas for Russia it's a new market for their gas giving them more flexibility in the global energy Market but as of now there's no solid news about when construction will actually start back in June there were reports that China and Russia were stuck in negotiations the main issues they couldn't agree on the price of the gas or how much gas China would buy some Western media Outlets jumped on this painting a picture of tense sinor Russian relations but is that really what's going on the real issue seems to be China's concerns about the pipeline going through Mongolia
