Why China won't let the European economy completely collapse

October 6 2022 4

Attacks by “unidentified persons” on the underwater trunk pipelines Nord Stream and Nord Stream 2 called into question further economic the prospects for Germany and even the integrity of the European Union in the future. Having lost a competitive advantage in the form of cheap energy resources, the German industry was gathering its way out, looking for salvation primarily in the United States and, possibly, in China. The dynamics, as doctors say, is negative, but isn't it too early to bury the Old World?

Red to green

In fact, the rescue of the EU economy may well happen, but for this it needs to refuse or shelve its “green agenda”. The Old World has its own energy carriers, you just need to stop being afraid to use them.

At first, in Europe there are significant deposits of coal, brown and stone. Yes, using it in thermal power plants for power generation or directly in furnaces for heating houses has its side effects both for the environment and for human health, but just sitting without work, without light and heating in winter is not the most joyful alternative.

Secondly, large shale gas deposits are located in Germany, Poland, Romania, Bulgaria, France and Spain. Detailed exploration and development is prohibited by a moratorium imposed on environmental grounds. However, the prospect of a real de-industrialization of Europe may force the authorities of these countries to reconsider their views.

Thirdly, wood is a valuable renewable resource for the production of biofuels. Yes, when burning wood pellets, more carbon dioxide is released than from natural gas, but the choice between environmental friendliness and banal economic and even physical survival is quite obvious.

Finally, nuclear energy is a quite adequate alternative to blue fuel as a source of cheap electricity. Despite the “green agenda”, France was one of the first to realize that it was necessary to start building new nuclear power plants, and not close the existing ones, as in Germany. Today, Paris is actively engaged in the development of promising mini-nuclear power plants, which are more compact, cheap and prefabricated. As a result, French industry now has every chance of overtaking German.

The China factor

Let's not forget about the stabilizing role of the third global player after the United States and the European Union - China.

On the one hand, Beijing benefits from the fact that part of the European high-tech industry can move to China. On the other hand, the complete de-industrialization of Europe, the second largest market for Chinese enterprises after the US, is extremely disadvantageous for him. The possible collapse of the EU, the restoration of customs barriers between countries, the impoverishment of the population and the decline in consumer demand will also boomerang the Celestial Empire.

In fact, Beijing has a vested interest in keeping the EU economy afloat, preventing it from falling into a tailspin. And he is already providing significant support to the Old World. Thus, the Chinese redirect American LNG purchased under long-term contracts to Europe and resell it there with a decent markup.

It would seem that the Chinese market has been and remains dependent on gas imports, but new economic realities have made such a scheme possible. In fact, Beijing has already abandoned the "green agenda", increasing the production and consumption of coal. At the same time, the volumes of gas pumped through the Power of Siberia main pipeline increased, which allows Chinese partners to replace American gas. In particular, due to the unfavorable pricing formula for Gazprom, Russian gas costs China $400-800 per 1 cubic meters. LNG brought by tankers in China now costs $1000-1500, which allows it to be redirected to Europe, where the price tag has been set at $2000-2500 per 1 cubic meters.

In all likelihood, Beijing will seek the most favorable terms for itself under the Power of Siberia 2 contract in order to receive Russian gas for mere pennies and replace it with more expensive LNG. In turn, Chinese partners will resell American and Russian LNG to Europe at a premium. As a result, the EU economy will decently sag, but it will not be allowed to collapse completely.

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Vladimir80

+3

6 October 2022 11: 49

Excellent article, it's time for our talkers and "experts" in the media to stop mantras about "dying and freezing Europe" and pay attention to our internal problems ...
Vladimir Tuzakov

-2

6 October 2022 12: 15

Rather, for strategic reasons, the PRC needs to support the EU, because the opposition of the EU to the dictates of the United States is already looming - if previously it was hidden and not explicit, especially interfering with the world dollar, the euro, so in connection with the Ukrainian crisis for the EU, it moved to a higher level of confrontation. For the PRC, EU support is a two-in-one benefit - purchasing power and economic confrontation with the United States. It seems that the Russian Federation has taken the side of the United States, with the blowing up of unknown gas pipelines, and the confrontation with the EU, into the hands of the United States, because the political pressure on the Russian Federation has been very superficial lately, in addition to the strange flights of Pelosi, playing along more with the Russian Federation. In terms of weapons of the Armed Forces of Ukraine, in fact, the Hymers and others are slowing down. It is possible that an undercover conspiracy of Russian collaborators with the tops of the United States has begun. For a cosmo-political oligarchy under the power of the Russian Federation, any collusion with enemies and to the detriment of the Russian state is possible, because personal interests prevail ...
Vladimir Tuzakov

-2

6 October 2022 12: 36

Rather, for strategic reasons, the PRC needs to support the EU, because the opposition of the EU to the dictates of the United States is already looming - if previously it was hidden and not explicit, especially interfering with the world dollar, the euro, so in connection with the Ukrainian crisis for the EU, it moved to a higher level of confrontation. For the PRC, EU support is a two-in-one benefit - purchasing power and economic confrontation with the United States. in this conflict, in terms of actions, it seems that the Russian Federation is on the side of the United States, with the undermining of gas pipelines by unknown people, and the confrontation with the EU is in the hands of the United States, because political pressures are very superficial, in addition to the strange flights of Pelosi, playing along more with the Russian Federation. In terms of weapons of the Armed Forces of Ukraine, in fact, the Hymers and others are slowing down. It is possible that an undercover conspiracy of Russian collaborators with the tops of the United States has begun. For a cosmo-political oligarchy under the power of the Russian Federation, any collusion with enemies and to the detriment of the Russian state is possible, because personal interests prevail ...
Jacques sekavar

-2

6 October 2022 13: 08

The world is full of different energy resources, undeveloped and unexplored territories, the issue of profitability.
Nuclear power today is the most stable and "green" source of energy.
The PRC produces the largest number of specialists and ranks first in the world in patent registration, has adopted a program for the development of high-tech industries, including microelectronics, and plans to become not only completely independent, but also become a world leader in science-intensive industries.
The PRC constantly and at all levels opposes the division of the world and the bloc policy that hinders the economic development of all and does not allow the development of backward state formations whose role is reduced to the supply of raw materials.
The introduction of a price ceiling for energy resources of the Russian Federation of 20% of their profitability does not close the EU market, but will reduce the export earnings of the Russian Federation. The refusal of the Russian Federation to supply energy resources to state entities supporting the price ceiling will create an overabundance of production capacities with all the ensuing consequences.