China's Further Vulnerabilities

China is facing increasing economic headwinds over the next decade as its coal production tops out and then goes into steep decline.  That will increase the cost of doing everything in China, and the country will become a less formidable trade competitor.  Evidence that the Chinese economy has already topped out comes from ExxonMobil's recently released energy outlook which contains the following figure:   Figure 1: Heavy industry energy consumption in quadrillion BTUs. It shows that China (the red line)'s energy consumption in heavy industry has fallen back to what it was in 2010.  Growth is over.  That is corroborated by China's railway statistics: Figure 2: Goods transported on Chinese railways, 1990-2016. The tonnage carried on Chinese railways is down 25% from its peak in 2011.  Without the economy contracting by a similar amount, one possible explanation is that more power...(Read Full Article)