WASHINGTON: The US wants other countries to engage China on limiting the flow of synthetic drugs, the State Department’s top official on narcotics said on Thursday (Jul 6), as Washington complains of a lack of cooperation from Beijing to combat illegal trade in the dangerous substances. On the eve ofContinue Reading
Another factor that could affect sound quality is the temperature at a venue, Mr Spencer pointed out.
The heat at the National Stadium during K-pop band Blackpink’s concert in May made headlines, even though there were no reports of sound issues.
“Sound propagates through the air, like through waves. The warmer it is, the less dense the air; the colder it gets, the air is actually more dense, so it’s harder to (have) sound especially in the higher frequencies which is where all the clarity is,” he explained.
But in Singapore, it’s humid most of the time, he said. “If there’s a lot of moisture in the air, that also stops the propagation of sound.
“Essentially, if you really want good sound, you need to be near the speakers because then you have very direct sound,” he added.
“You (want to) try to give everybody direct sound rather than giving reflections. But in order for that to happen, you need to deploy more speakers, which is more budget and more setup time as well. It’s more manpower, more cost.”
With internationally acclaimed artistes like Coldplay and Taylor Swift making Singapore a multi-day tour stop, the country is on its way to cementing its branding as an entertainment hub, tourism experts previously told CNA.
Such artistes are drawn to Singapore for various reasons including its state-of-the-art event facilities, easy connectivity to other Southeast Asian cities, stable governance and promotion efforts by the Singapore Tourism Board.
As such, despite the National Stadium’s limitations, turning it into a concert venue boils down to business, said LAMC’s Mr Knudson.
“Sports arenas are generally not designed for live music, but the economics of the concert business require them to be used because they can accommodate higher capacities.”
Selecting the venue is also about dollars and cents, as concert promoters who pay for the audio equipment for the artiste will have to balance between expenditure and profit, said Mr Spencer.
Illustrating the eye-watering cost of renting audio equipment, he noted that most companies charge per concert day with rehearsals costing an additional sum. Should artistes choose to put in temporary infrastructure, the cost of venue rental also increases.
“If we’re looking at something the size of Coldplay, the rental will be north of S$250,000 for the entire week just for the audio itself. Whereas if you’re looking at Indoor Stadium, that S$250,000 will give you your entire production – lighting, sound, video and whatever else,” he said.
Ultimately, a concert promoter’s venue choice is “very dependent” on the genre, the artiste and “especially the artiste’s fan base, the size of their fanbase and the expectations of the artiste and their fanbase”, added Mr Knudson.
He acknowledged that a venue is “critically important” to create “the vibe of the show” for the artiste and fans, as the sound and ambience of the venue will help make the show a success.
But in the end, the “most important element is always the artiste”, he added. “Fans will generally go wherever their favourite artiste performs.”
CHIANG MAI: Police are pursuing legal action against 13 entities, including four Chinese nationals and six Thais, for operating a housing estate in violation of the law in Chiang Mai, deputy national police chief Pol Gen Surachate Hakparn said.
He said that the move came after Chiang Mai police and immigration officers inspected a housing estate covering more than 22 rai in Hang Dong district.
They found that the land is owned by two companies which list Thai citizens as their executives, even though they have no authority to run the business, Pol Gen Surachate said, adding the companies were allegedly used to hold shares on behalf of the real Chinese owners.
“The companies were set up for the purpose of holding land [on behalf of the Chinese suspects],” he said.
“The companies, which are run by Chinese nationals, would then sell long-term leaseholds to Chinese citizens.”
He said that Chiang Mai police and immigration officers had gathered evidence and filed a complaint with Hang Dong police to take legal action against 13 entities, which comprise three companies, four Chinese nationals — one of whom is on the run — and six Thai citizens.
Pol Gen Surachate also said that authorities had previously investigated another housing estate in San Kamphaeng district, which is operated by a company that authorities suspect was acting as a nominee for Chinese nationals.
Prosecutors indicted eight suspects in the case. The case is now being tried by the Chiang Mai Provincial Court, he said, adding that authorities will examine the money trail from the land sales in both cases and reclaim plots which have been illegally transferred to foreigners.
“The two housing estates have Thai nominees operating on behalf of foreigners,” Pol Gen Surachate said, adding assets acquired through money laundering will be seized.
Joyce Liu/BBC The small eastern city of Zibo in Shandong province is experiencing an outdoor barbecue craze.
People from all over China are coming here to taste its lamb skewers, which have become legendary via social media.
It’s quite a raucous experience and certainly not for the faint-hearted.
The street is packed, you sit on little plastic chairs, drink beer and wrap chunks of meat with spring onion on the local flatbread while karaoke songs pump out in all directions.
On the face of it, these crowds appear to show an economy rebounding strongly from the coronavirus emergency – but according to economists that’s not the case.
Rather, they say, this is an example of people choosing a cheap, tasty, option at a time of great pressure on household incomes.
A man sitting with his shirt off tells us this is the perfect spot to enjoy a hot summer night with his family, and that this type of fun has a price tag to match the moment.
“This place is great for ordinary people,” he says. “Recently, it’s been hard to make money but still easy to spend it. After three years of Covid, the economy is only slowly recovering.”
University graduates are being hit especially hard by China’s economic doldrums, with youth unemployment hovering at or above 20%.
Some students are feeling nervous about their futures.
“Yes, I’m worried,” says one woman who’ll soon graduate. “There’s a lot of competition. It’s hard to find a job. All my classmates feel the same pressure.”
For those who have jobs, a big reason for their reluctance to spend big is economic security.
They’re concerned about the potential to join the ranks of the unemployed, and their household’s largest single investment is, in many cases, no longer worth what they thought it would be.
The real estate sector is under great stress in China.
To see this first-hand, we drive a few hours east of Zibo to the outskirts of a much larger city, Qingdao.
Here, a property explosion hasn’t matched real demand from buyers or renters, and the result has been huge housing estates built with very few residents in them.
A woman is selling cold noodles from a portable stand outside her housing complex where she has few neighbours.
A few years ago, her husband bought a flat here after moving to Qingdao to give their child a better start because they heard the schools would be good.
I ask her if she’s worried about the value of her home collapsing.
“Of course I’m worried,” she says. “But what can I do?”
Nearby a couple who are street cleaners have stopped for lunch. They point to the huge estate behind them and say that nobody lives there.
Across the road there is a small forest of concrete towers without paint, without windows and with window frames now looking the worse for wear, having been exposed to the elements.
“Construction just stopped there one day last year,” the man says.
According to his wife, the entire suburb is pretty dead. “There’s nothing here. There’s no petrol station. You have to go a long way for fuel. It’s really not convenient to live here,” she says.
There had been hope that this region would take off after it hosted a major political meeting, the Shanghai Co-operation Organisation Summit, and China’s leader Xi Jinping gave it his personal stamp of approval as a place to invest and do business, potentially hosting international expos and the like.
But the factories, start-ups and other companies that would supposedly employ those who bought property here have been few.
According to a local real estate agent, sales volumes have halved in the area in recent years.
“Prices are down because the market is saturated,” she says. “Too many homes were built and it’s hard to sell them.”
We put up a drone to get a bird’s eye view and it looks even worse than at ground level.
Entire new housing estates where work has stopped can be found in all directions. Those that are finished don’t have much sign of life in them.
What’s more, this supply and demand problem isn’t unique to this area. It isn’t even unique to this city. In province after province across China, evidence pointing to the danger of a property bubble is easy to find.
One reason for rampant real estate speculation in this country has been a lack of other options for investment. But the boom in real estate drove house prices out of the reach of ordinary families in many big cities. The government response was to cap the number of flats any person could buy.
It was a genuine attempt at an egalitarian reform, but pressure is now coming to reverse this. In Qingdao, such measures have already been eased, in an attempt to stimulate its stalled real estate market.
The challenge for Chinese policymakers is to find a way to wean this economy off such a heavy reliance on property sales to generate growth and business confidence.
Economists like Harry Murphy Cruise, from Moody’s Analytics, think China is facing significant problems.
“China’s economy is in desperate need of rebalancing,” he tells the BBC from Australia. “It’s had that massive period of growth over the last two or three decades from big infrastructure building, from a massive uptick in the property market that is actually not a sustainable growth driver going forward.
“Look around the world, developed economies need households as a key driver of economic growth, and that is just not what China has at the moment.”
The Chinese government is considering ways to promote more spending by individuals and by businesses from interest rate cuts to cash handouts.
But the problem is sentiment.
People will feel more secure when there are more jobs. Businesses need to invest to create more jobs, but they are reluctant to do so while customers are so insecure.
As Harry Murphy Cruise puts it: “It’s sort of like the chicken and the egg. You can’t have that uptick in the economy unless you have business spending. They’re not spending until they see that uptick. So, there’s a stalemate that’s really holding back a key portion of the economy.”
Then there’s the chance that all of this will bleed into global trade.
China is big. What happens to the world’s second largest economy turns ripples into waves.
Reduced manufacturing here – off the back of weak international demand – has resulted in fewer exports, fewer Chinese-made goods available worldwide and less business activity in Asia’s mega factory. Then the subsequent slower consumption in China means fewer imports of other countries’ products.
The headache for the Chinese government is that it may have to choose whether to go for a short-term stimulus fix, which would delay the rebalancing it will eventually need to face, or whether to absorb more immediate pain and bring on the long-term solution more quickly.
Naturally, there are almost certainly those in Beijing’s upper echelons of power considering some sort of middle path, starting with a milder boost to stabilise the economy, then considering the larger problems at hand.
Because they know that, once negative sentiment sets in, it can be hard to turn around.
Yet if you want to feel optimistic about Qingdao, and about life, you go to the beach. Tourism along its famous coastline does seem to be picking up.
There’s laughter, sandcastle construction and everyone – whether they’re a captain of industry or a truck driver – is enjoying the great embrace of the ocean.
Whether it matches reality or not, here you almost can’t help but feel that, despite everything, the future still has good things in store.
“A nation can be transformed.” With those stately words, US President Joe Biden signed the Inflation Reduction Act (IRA) into law in August 2022.
Despite the fractured state of US partisan politics, the Democratic Party guided the largest energy subsidy in US history into being with a new national ethos for greening the economy while tilting global competition in the United States’ favor.
The IRA is part of a broader policy agenda with the CHIPS and Science Act that provides US$280 billion in federal funding for research and the fabrication of logic and memory chips inside the United States.
The Infrastructure Investment and Jobs Act also funneled $700 billion into electrification, renewable energy and digital infrastructure and has already funded 20,000 projects since 2021.
Understandably, there is some consternation over the market-distorting effects of Washington offering Beijing-style direct subsidies for those willing to bet on the Democrats’ “Make it in America” agenda.
While governments with cash to spend – like members of the European Union – have pledged their own net-zero industrial plans and chips subsidies, Asian leaders, like Indonesian President Joko Widodo, have hinted at trade remedies to protect Asia’s budding electric vehicle (EV) industry against unfair market practices abroad.
US industrial policy is not just transformative for the United States, but also for Asia, and intentionally so. The United States will subsidize hydrogen investments twice over: first for its production and again when it is used by energy-intensive industries across Asia, such as steel, aluminum, chemicals and heavy manufacturing.
Such double-sided stimuli will change the parity of competition against China and with allies and net importers of energy like India, Japan, South Korea and Vietnam. Carbon levies, currently under consideration, will also hamper exports from countries like Malaysia or Indonesia.
These subsidies also have some broader macro effects on Asia. While Trump-era tariffs created little or no jobs at home, the 2017 US tax reforms incentivized US multinationals to repatriate trillions from East Asia back into the domestic economy.
The IRA will funnel these profits into investments rather than shareholder dividends. The United States is already the largest recipient of foreign investments – thanks to its position as the world’s most productive economy by some margin – and the IRA will divert more capital from East Asia into the United States.
But the Biden administration’s industrial policy trifecta is not just an innovation moonshot of the 1960s. There is also an ideological shift – which National Security Adviser Jake Sullivan describes as the “new Washington consensus” – from a productivity-driven economic policy towards a statecraft-led one that aims to secure a comfortable lead over any rival on emerging technologies.
If US sanctions are designed to stop China from ever landing on the Sea of Tranquillity, the subsidies are the flipside of the same coin.
But today’s geostrategic competition is also a challenge different from that of the Cold War. Unlike the Soviet Union, China is deeply integrated into global production networks with well-diversified fiscal revenue. The United States would never be able to outspend it.
Nor is China the only rival. The puzzlement over whether electric vehicles from US allies – but commercial rivals – like Japan or Germany qualified for IRA tax credits showed how distinguishing allies and adversaries is a second-order priority for US legislators.
Other subsidies favor 5G equipment from a private consortium led by US cloud companies and Chinese military contractors – such as ZTE, Inspur, Phytium and H3C – over trusted South Korean and Nordic manufacturers like Samsung, Ericsson and Nokia.
But perhaps the most conspicuous plans pertain to moving the manufacturing of high-end processors and dynamic random-access memory chips to the United States.
The market leader, Taiwan Semiconductor Manufacturing Company (TSMC), estimates that the construction costs are likely to be at least four times higher than they would be in Taiwan due to skill shortages and administrative red tape. Its CEO, Morris Chang, candidly called the US effort to bring chipmaking home an “exercise in futility.”
Absent of commercial logic, such endeavors seem eerily similar to Beijing’s attempt at forced technology transfer, especially in light of US export controls towards South Korean and Taiwanese-owned microchip manufacturing plants in China.
Given such negative outlooks and global ramifications, it is an open question whether Biden’s gamble will pay off.
Many economists are negatively disposed to US industrial policy as markets inevitably make better informed and diversified bets on future technologies than government officials.
Postwar activist policies in Japan, South Korea and Taiwan were successful because they redirected scarce resources into sectors that held more long-term promise. They then ceased to be productive once the countries matured into dynamic market economies.
East Asian countries could shield their ministries from lawmakers and lobbyists representing special interests. Elsewhere, industrial policy is prone to failure in stakeholder systems like the United States or China, where lobbying has been elevated to performance art.
Auto bailouts, Cray supercomputers, solar panels and attempts to synthesize fuel from coal failed because the government supported unviable ideas or companies that were politically well-connected.
In contrast, innovations often labeled as successful – from the early breakthrough in semiconductor technology in the 1960s to Covid-19 vaccines – were not thanks to the White House betting on the right technology or company, but the results of broader support for scientific research.
In the coming decade, the United States will spend $100 billion annually on industrial support, a sum larger than the entire government expenditure of Singapore. While many programs will fail, a few projects may prolong US industrial pre-eminence, especially if the incentives are carefully designed to exploit Asia and Europe’s struggle with higher energy prices.
As Samuel Huntington said of the United States’ relative industrial decline against Japan back in 1988, “The United States is unlikely to decline so long as its public is periodically convinced that it is about to decline.”
Such aversion to defeatism – real or imagined – is indispensable in mobilizing the nation into something previously unthinkable, or even slightly un-American, like industrial policy.
Hosuk Lee-Makiyama is Director of the European Centre for International Political Economy and Senior Fellow of the Singapore Institute of International Affairs.
This article was originally published by East Asia Forum and is republished under a Creative Commons license.
This year’s GMP is a collaboration between Mranti and Leave A Nest
Participants will have chance to expand their network in Tokyo and Osaka
Leave a Nest (LVNS) and the Malaysian Research Accelerator for Technology and Innovation (MRANTI) is collaborating in this year’s Global Market Fit Programme (GMP) Japan for startups seeking to…Continue Reading
JAKARTA – As the first and only Indonesian leader with a commercial background, albeit from the heartland of rural Java, President Joko Widodo’s preoccupation with the economy and attracting foreign investment always dominates his agenda on trips abroad.
So it was with his latest visit to Australia, but with an important difference. Buoyed by the rapid growth of the electric vehicle (EV) industry, there are signs the two giant neighbors may have finally found the basis for a stronger and more sustainable relationship.
“I think this will be a massive transformation of the bilateral economic space because it has bigger implications,” former Australian diplomat Kevin Evans, director of the Australia-Indonesia Centre, told the Australian Broadcasting Corp (ABC).
“It’s not just about the Australia-Indonesian corridor,” he said. “It’s actually about doing things together that allows a move into much bigger markets around the region and the world.”
It will also depend on the active involvement of the Indonesian private sector and willingness of Indonesia-based companies to take a stake in West Australian lithium mines to shore up their supply chains.
“It will depend on Indonesia understanding that things are done here on a commercial basis,” says one Australian official, noting the Indonesian government’s interventionist role in making things happen in its economy. “It will still take time and a lot of effort.”
Prime Minister Anthony Albanese, who scored points with Widodo by making Jakarta his first port of call after he was sworn in last year, spoke of the often-turbulent relationship as “shifting up a gear.”
Central to that is the potential symbiotic partnership that could develop around EV batteries and Indonesia’s interest in importing Australian lithium, which along with some rare earth minerals is the one significant component it lacks.
Shortly before the leaders met, the Indonesian Chamber of Commerce and Industry (Kadin), signed a so-called Action Plan with the state government of West Australia, to bring both parties closer together in the critical minerals sector.
“The signing of the action plan is essential to seize opportunities and gather all parties involved in the critical mineral sector with those parties who will support them financially to realize more concrete cooperation,” said Indonesian Economic Coordinating Minister Airlangga Hartarto.
Australia is the world’s largest lithium producer, with last year’s output totaling 61,000 tonnes, or nearly half of global production, as trade in all EV battery ingredients – and their prices – rises significantly.
About 96% of Australia’s lithium exports last year went to China, which accounts for 58% of global lithium processing capacity and nearly 80% of global lithium battery manufacturing capacity, a dominance that worries the US.
Analysts say the lithium trade provides an opportunity to take full advantage of the 2020 Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA), which aims to unlock the trade and investment potential of both countries.
Under one of four side agreements, A-CEPA provides Indonesian companies with preferential access to the Australian market by lowering the level of Australian content required in EV battery manufacturing.
Indonesian firms are understood to have had initial discussions with the owners of several West Australian lithium mines, but the only signed deal so far is an MOU between state-owned holding company MIND ID and Australian salt and potash supplier BCI Minerals.
In Indonesia, United Tractors, a subsidiary of car-maker Astra International, is taking a 19.99% interest in Australian-owned Nickel Industries Ltd, which supplies nickel ore to the Morawali and Weda Bay smelters in Central Sulawesi and Maluku.
Despite their proximity, Indonesia counts Australia as its 15TH top trading partner with imports last year of just US$3.5 billion, lagging Bangladesh ($3.9 billion) and Pakistan ($4.3 billion).
Australia, on the other hand, puts last year’s figure of Australian exports to Indonesia at $12.4 billion and Indonesian imports at $5.9 billion, a trade deficit in goods that Jakarta regularly complains about to Canberra’s bemusement.
The discrepancy is explained by the fact that Indonesia doesn’t take services into account, including money spent by the 1.2 million Australian tourists who are now flocking back to Bali after the Covid hiatus.
More than that, Indonesia ranked 27th as a destination for sluggish Australian foreign investment, much of it in the mining sector, and a lowly 38th place as a source of investment to Australia.
Australian officials say one significant impediment is the Indonesian mindset that it is unpatriotic to invest in other countries, one of many factors that expose over-regulated Indonesia’s failure to sell itself on the world stage.
Former ambassador to Jakarta John McCarthy has noted the absence of any real diplomatic crisis in recent years in a relationship once marred by heated disputes over East Timor and Papua and also by the execution of two Australian drug traffickers in 2015, the year after Widodo came to power.
“If this lack of fireworks continues, we should be diverted even less by the need for crisis management and be able to focus more on what we want from the relationship,” McCarthy wrote in the Australian Financial Review.
JAKARTA: Chinese companies investing in minerals used in the renewable energy industry have been accused of more than 100 human rights and environmental abuses around the world since 2021, according to a report released on Thursday (Jul 6). China dominates the processing and refining of minerals critical to the transitionContinue Reading
As the dust settles from the audacious – and swiftly aborted – attempted Wagner insurrection, the exact whereabouts of its architect is still unknown at this writing. Yevgeny Prigozhin, the brutish figure behind the paramilitary group, is meant to be somewhere in Belarus.
Still, the life – and, as someone who has so publicly crossed Vladimir Putin, perhaps eventual death – of Prigozhin is not the most important topic far from Europe.
Almost as soon as the insurrection was halted, African states began to wonder what effect the mutiny would have on the Wagner fighters in their midst. The Kremlin moved quickly to quash any talk of change, thereby demonstrating how valuable Wagner fighters are to Russia’s foreign policy.
Speaking on the Monday after the brief march on Moscow, Russian Foreign Minister Sergey Lavrov said the fighters would remain in Mali and the Central African Republic as long as they were needed – the contracts that Wagner fighters sign are, after all, between them and the government. In other countries on the continent where Wagner operates, albeit with smaller footprints, the situation will be the same.
And that is for one simple reason: However angry President Putin may be with the head of Wagner, the group’s activities in Africa are too valuable for the Kremlin to give up.
The name may change, the leadership of the group may change – but the use of private military companies to provide protection, training and raw fighting force to Russian allies is here to stay. The Kremlin may cut off the head of Wagner, but the group’s tentacles in Africa will remain.
Wagner has a presence in as many as a dozen African states, but the exact nature of its work is extremely murky.
In Mali, the group has a contract directly with the government, and is reportedly paid millions of dollars per month. In the Central African Republic, the Russian government works with the CAR, and alongside the Wagner Group. The Kremlin said last week that the government-to-government relationship would continue, but the Wagner contract was for the CAR to decide.
Wagner also has – or had, it can be tricky to be sure – a footprint in Burkina Faso, Libya and Sudan, as well as other countries.
In addition to fighters, Wagner also appears to operate a number of other companies, or at least work closely with them. In the CAR, one company linked to Wagner buys gold and diamonds; in Russia another company buys gold from the first company, which then appears to fund the paramilitaries. Similar relationships occur in other countries where Wagner troops are present.
That murkiness is precisely why the group is so valuable to the Kremlin. With tentacles that stretch across military objectives and business interests, Moscow gains the ability to influence countries while maintaining plausible deniability, and also benefit from less than transparent business practices, while evading Western attempts to sanction companies and people.
In reality, Wagner is an arm of Moscow’s foreign policy.
Little wonder then that, whatever happened in the brief “internal affair” in Russia, as the Chinese Foreign Ministry referred to the mutiny, the use of private military companies on the African continent will continue.
(Indeed, it may even benefit the Kremlin: After years of denial, Prigozhin finally admitted last year that he was behind Wagner. Whoever replaces him will be more anonymous and offer further deniability.)
Certainly the mutiny will give countries where Wagner operates pause for thought. Private contractors can be disbanded easily, or their assets in Russia frozen.
No country needs a group of trained, armed, stateless men wandering around. For those extremely reliant on Wagner, such as the CAR President Faustin-Archange Touadera, who has placed even his own personal security detail in the hands of Wagner, having their ties to Moscow hanging by such a loose thread will be a concern.
However, the benefits of Wagner flow both ways, and African countries appear to like them as much as the Kremlin.
In Mali, where Wagner fighters stepped in to fill the gap created by departing French troops, having hardened fighters without the necessity of creating new political allegiances is helpful.
In Libya and Sudan, where fighters from the group have been spotted over the past four years, Russian influence and fighting experience can be purchased and utilized, but without the political blowback that would come from soldiers in state insignia being involved.
A close adviser to the CAR’s president confirmed as much last week when he told the Financial Times that Wagner fighters were in the country with the blessing of Moscow. “If Moscow decides to withdraw them and send us the Beethovens or the Mozarts rather than Wagners, we will have them,” he said.
At the murky nexus of private military contractors controlled by the Kremlin and African states looking to quietly bolster their fighting forces, a paramilitary group by any other name would smell just as sweet.
This article was provided by Syndication Bureau, which holds copyright.
Faisal Al Yafai is currently writing a book on the Middle East and is a frequent commentator on international TV news networks. He has worked for news outlets such as The Guardian and the BBC, and reported on the Middle East, Eastern Europe, Asia and Africa. Follow him on Twitter @FaisalAlYafai,
The story of renewable energy’s rapid rise in Latin America often focuses on Chinese influence, and for good reason.
China’s government, banks and companies have propelled the continent’s energy transition, with about 90% of all wind and solar technologies installed there produced by Chinese companies. China’s State Grid now controls over half of Chile’s regulated energy distribution, enough to raise concerns in the Chilean government.
China has also become a major investor in Latin America’s critical minerals sector, a treasure trove of lithium, nickel, cobalt and rare earth elements that are crucial for developing electric vehicles, wind turbines and defense technologies.
In 2018, the Chinese company Tianqi Lithium purchased a 23% share in one of Chile’s largest lithium producers, Sociedad Química y Minera. More recently, in 2022, Ganfeng Lithium bought a major evaporative lithium project in Argentina for US$962 million.
In April 2023, Brazilian President Luiz Inacio Lula da Silva and Chinese President Xi Jinping signed around 20 agreements to strengthen their countries’ already close relationship, including in the areas of trade, climate change and the energy transition.
China’s growing influence over global clean energy supply chains and its leverage over countries’ energy systems have raised international concerns. But the relationship between China and Latin America is also increasingly complicated as Latin American countries try to secure their resources and their own clean energy futures.
Alongside international investments, Latin American countries are fostering energy innovation cultures that are homegrown, dynamic, creative, often grassroots and frequently overlooked. These range from sophisticated innovations with high-tech materials to a phenomenon known as “frugal innovation.”
Chile is an example of how Latin America is embracing renewable energy while trying to plan a more self-reliant future.
New geothermal, solar and wind power projects – some built with Chinese backing, but not all – have pushed Chile far past its 2025 renewable energy goal. About one-third of the country is now powered by clean energy.
But the big prize, and a large part of China’s interest, lies buried in Chile’s Atacama Desert, home to the world’s largest lithium reserves. Lithium, a silvery-white metal, is essential for producing lithium ion batteries that power most electric vehicles and utility-scale energy storage.
Countries around the world have been scrambling to secure lithium sources, and the Chilean government is determined to keep control over its reserves, currently about one-half of the planet’s known supply .
In April 2023, Chile’s president announced a national lithium strategy to ensure that the state holds partial ownership of some future lithium developments. The move, which has yet to be approved, has drawn complaints that it could slow production.
However, the government aims to increase profits from lithium production while strengthening environmental safeguards and sharing more wealth with the country’s citizens, including local communities impacted by lithium projects.
Latin America has seen its resources sold out from under it before, and Chile doesn’t intend to lose out on its natural value this time.
Developing its own renewable energy industry has been a priority in Chile for well over a decade, but it’s been a rough road at times.
In 2009, the government began establishing national and international centers of excellence – Centros de Excelencia Internacional – for research in strategic fields such as solar energy, geothermal energy and climate resilience.
It invited and co-financed foreign research institutes, such as Europe’s influential Fraunhofer institute and France’s ENGIELab, to establish branches in Chile and conduct applied research. The latest is a center for the production of lithium using solar energy.
The government expected that the centers would work with local businesses and research centers, transferring knowledge to feed a local innovation ecosystem. However, reality hasn’t yet matched the expectations. The foreign institutions brought their own trained personnel.
And except for the recently established institute for lithium, officials tell us that low financing has been a major problem.
While big projects get the headlines, more is going on under the radar.
Chile is home to one of the largest public incubators and seed accelerators in Latin America, StartUp Chile. It has helped several local startups that offer important innovations in food, energy, social media, biotech and other sectors.
Often in South America, this kind of innovation is born and developed in a resource-scarce context and under technological, financial and material constraints. This “frugal innovation” emphasizes sustainability with substantially lower costs.
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For example, the independent Chilean startup Reborn Electric Motors has developed a business converting old diesel bus fleets into fully electric buses. Reborn was founded in 2016 when the national electromobility market in Chile was in its early stages, before China’s BYD ramped up electric bus use in local cities.
Reborn’s retrofitted buses are both technologically advanced and significantly cheaper than their Chinese counterparts. While BYD’s new electric bus costs roughly US$320,000, a retrofitted equivalent from Reborn costs roughly half, around $170,000. The company has also secured funding to develop a prototype for running mining vehicles on green hydrogen.
Bolivia’s “tiny supercheap EV” developed by homegrown startup Industrias Quantum Motors is another example of frugal innovation in the electric vehicles space. The startup aspires to bring electric mobility widely to the Latin American population. It offers the tiniest EV car possible, one that can be plugged into a standard wall socket. The car costs around $6,000 and has a range of approximately 34 miles (55 kilometers) per charge.
Phineal is another promising Chilean company that offers clean energy solutions, focusing on solar energy projects. Its projects include solar systems installation, electromobility technology and technology using blockchain to improve renewable energy management in Latin America. Many of these are highly sophisticated and technologically advanced projects that have found markets overseas, including in Germany.
Chile is also diving into another cutting-edge area of clean energy. Using its abundant solar and wind power to produce green hydrogen for export as a fossil fuel replacement has become a government priority.
The government is developing a public-private partnership of an unprecedented scale in Chile for hydrogen production and has committed to cover 30% of an expected $193 million public and private investment, funded in part by its lithium and copper production.
Some questions surround the partnership, including Chile’s lack of experience administering such a large project and concerns about the environmental impact. The government claims Chile’s green energy production could eventually rival its mining industry.
With plentiful hydropower and sunshine, Latin America already meets a quarter of its energy demand with renewables – nearly twice the global average. Chile and its neighbors envision those numbers only rising.
Zdenka Myslikova is a postdoctoral scholar in clean energy innovation at Tufts University and Nathaniel Dolton-Thornton is an assistant researcher in climate policy at Tufts University.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
