 This is Think Tech Hawaii. Community Matters here. Okay, we're here in Honolulu. I'm Jay Fidel. This is, I guess it's a Monday. Think Tech Asia. Exciting. And we have, as we usually do at 4 p.m. on Mondays, we have Russell Liu. And he's in China. He joins us from yet another coffee shop in China. He's making the rounds of all the coffee shops in China one by one. Russell is an American lawyer practicing in Beijing and sort of discovering China step-by-step. Welcome back to the show, Russell. Welcome back, Jay. I've been discovering China for 15 years. You must have found out a few things by now. Well, you know, Jay, everybody out says Russell, you must be an expert at China. And I say, no, you're wrong. I'm never an expert because it changes every minute, every second, every day in China. Fantastic changes. And I tell people, if somebody tells you they're a China expert, turn the other way and run away because they're not an expert. Nobody's an expert. So let me get the handle on this. Today is December 11th. I guess it's December 12th in China, huh? And we're going to study winter. We're going to study winter in Beijing. So what is it like on December 12th in Beijing in China right now? Well, Jay, it's been a really nice, clear, sunny day. So although the winter is cold, it's about 30 degrees Fahrenheit. It's a little bit chilly. I have to wear a thick down jacket. But for the most part this year, unlike the previous years, I'm not really carrying my mask. You know, we usually carry a mask which will prevent small particles, micron-sized particles, from coming through the air and getting through our lungs. It can cause a lot of major heart respiratory diseases and ailments. Now we've seen that. Big change. So you know, what strikes me though is that, you know, we've heard about pollution in Beijing. In fact, we had on the show a couple years ago a fellow who runs. He likes to run. And he runs in Beijing, but there comes a time in the year where he really cannot run. Now I thought that was during the warmer months, but you're here to tell us that during the colder months it gets more polluted than it does in the warmer months. Can you explain that? Well, there's a combination of factors, Jay, historically. First of all, you have to understand Beijing is not located next to the ocean. It's not next to Shanghai. It's not like Tianjin, where the air by the ocean blows it all that way. Like in Hawaii, the air blows all the bad stuff away. Beijing is located in the interior of the hinterland of China, where the air gets trapped. So winter, the air gets heavy. It gets cold. And second of all, China has been for a number of years, been one of the major polluters because it burns cold using fossil fuel, especially in the winter months. You can see the cold being dropped off the restaurant, south side stacks of coal. You would see a lot of little truckloads of coal being dumped at places, residences, apartments. But I've been here 50 years. You don't see that anymore, Jay. You don't see coal here. Maybe during the cold, you see Americans who are expats here doing a barbecue on the weekend. That's all we can see coal in. Well, what do they use instead of coal to keep warm? I'm sure it's still cold in China in the winter, but what do they use? Well, I think China is getting away from fossil fuel. They're looking at alternative energy. But one of the things that has been very important here, at least in Beijing, has been a major move to really clamp down on Beijing, the polluters in Beijing. First of all, the last coal burning plant in the city has been closed down. Now, they use alternative energy because Beijing is set up. When Beijing was designed actually in the modern era in the 70s, investors came to China. They smartly dug the underground. You know, there's underground grids, water pipes around the whole city. So the whole city will be pumped in hot, warm water steam. So the city is pretty warm. And in fact, in the apartments, the residences, the office buildings, you know, water goes through this ipsid and they haven't prepared so that on November 16th, that's the official day that the heat gets turned on, that warm water. And it generates heat in offices at homes. So, you know, they've got that under control. But the biggest thing is that they're cracking down on the polluters. They're closing down factories within the city area. So things have markedly made a change, you know. You measure pollution by the air quality index. It's an international standard. So a few years ago, all the American expats would be looking at the AQI on our iPhones. And it tells us just what the air quality index is. So we would know how bad the air was outside. But Beijing has done a lot of things to take corrective action. Well, is there a big move in China to, you know, avoid pollution? I mean, where's it coming from? It sounds like when you say crackdown, use words like that, it sounds like it's a political initiative. And the government is taking affirmative steps. Am I right? Well, you know, I found living in China, when they say they're going to do something, the government doesn't. And which is, which is a miracle, you know, with 1.3 billion people, you know, it moves. Okay. For example, last year, the government increased their budget by 23 to 25%. Just in environmental protection and energy efficiency, added about 35 billion remedy to their budget, just to attack that. And in Beijing alone, they have put companies on a watch list. They've got 170 companies on a watch list, where they do daily inspections to check to see, or these polluters, you know, just what the daily level pollution they're putting out. And they're fine for this. So there's a lot of things that are going on. They're doing a hands-on approach to actually clamp down on the pollution. And I can see that it's happening. I was at dinner last night with the Dutch businessman, and he said, I was here two years ago, and I didn't talk about the show, but he said, you know, there's something different. It's cleaner. What are they doing here? And so we had this whole discussion, and I talked about our show today, about what they're doing here in China to crack down the pollution. Now, it's very visible because in 2013, that was the apocalypse year in China. That's the year the pollution sought up to 755 on the air quality index. When it shoots up to 500, that's danger. 700 is deadly. At level 300, the skies are all gray. So it was common a few years ago, two o'clock, I'd be sitting out in Cuomao, China, World Tower, looking outside. And Jay, everything is like pitch gray and black. It looked like it was eight or nine o'clock in the evening when it was two p.m. And today, that's not the case. So it's having a good effect. But tell me, what happens? I mean, what kind of instruction, what kind of, what do you call it, crack down instruction that I get from the government? In order to improve the air, what would the government be telling me to do? Well, you know, they've done several things, first of all, for the number of registered car drivers here in the city on a daily, every day, it's 5 million. So they have a system where they crack down a number of drive users. For example, on certain days, if your license plate ended with an odd number, you only could drive on certain days. You couldn't drive, and people have to take the bus. People have to use mass transit. So I've seen that that has a major effect on people using the subway more, people getting around all alternative energy vehicles. Like in previous show, we talked about mobile bike, and we talked about all these bike share. People ride them during the winter. I ride them all the time. They're cheap, they're a great way to get around, and it's healthy. Now, what about danger? If you're right on the street, how likely is it somebody's going to hit you from behind, either with a car or maybe a truck or maybe another bicycle? Well, you know, I think that that was something that everybody, as Westerners, expats, forward cigarettes, they might be especially if they come to Beijing for the first time. You're a little bit scared. You don't know the rules. There are certain protocols here, because a city that is so large where business has to move when you're at an intersection, you just don't walk when it says walk, and you wait for the cars to go, and then everybody masses up to about 100, 50 to 100. And there's usually a guy in the corner who says, okay, group, you're okay, and everybody stands across. It's like a sheep crossing, it's a cattle crossing, Jay. So there are rules of etiquette. So I'm not saying I have to look to the eyes of the Chinese, not a Western. And this is how things done, because, you know, what, what 3.8 people with 22 million people a day in Beijing, you know, if you had to do the Western way where we stopped, we have to let the pedestrians or they let us cross half the street before they can make that right turn, everything stops there. Everything stops, commerce is dead. So there's a little different rules of engagement, but it works here. So suppose I don't follow the instruction that I get from Xi Jinping and the various divisions and departments and officials that may tell me what to do. What happens to me? Do I go to jail? Do I go to a reeducation camp somewhere deep in the South? Where do I go? I know. You're thinking 50 years ago. There's actually fine. You get a fine. Polluters are fine. You know, one of the things that I'm impressed about China is how they run this place with so many people, how you can create order. There is law and order. I'll give you an example. The way the country is, for example, part of this pollution crackdown means that China has turned to green energy. And we're saying a lot of green energy initiatives. For example, the university where I teach, they're actually notices where they put on all the dorms, all the office buildings that they're doing this green movement. So you can't ride your electric bikes. You can't keep it part of certain areas because now they prefer you to use bicycles. And people have switched to bicycles. So again, there is a conscious effort, not only from the level of the factory, the businesses, but down to the everyday persons. This green movement. But you know what's interesting is how technology is used at highest, like this show is talking about technology. For example, in China, the policemen who monitor the traffic on the road, they are serious about cars who try to take over the road, who park in areas on the street where they're not supposed to. Now they don't send a tow truck. There is a policeman who comes around who has his mobile phone, who has an application. He takes a picture of that car and the license plate, sends it back to go on their computer service. And then all of a sudden that goes into their computer center. There's an infraction launch. And so he just prints out on a small thermal printer the actual ticket, the ticket right there. And the printer is only showing the size, the printer comes out. And he just sticks it on the car. And the registration is sent, notice that he also finds that there's a parking violation. And they're serious because if you have so many of these violations, it counts against you. And when you try to register your car again, you may have problems. They may forbid you from driving. So good behavior results. What about that, the fine you talked about? I mean, just, let's see, an RMB is worth what, 15 cents, 16 cents? So how many RMB do I get fined if I park in the wrong place or I violate some directive about pollution? Well, Jay, I don't drive a car in China. Smart. I never look at the fines. But I understand the fines can be very substantial. So technology is used to keep people thinking about the rules. When you have this many people, 1.3 billion people, you have to use technology. So it goes back to another point. Again, back in the States, maybe if the police use that kind of technology, they can use their time for greater other important things and get the job efficiently done. Yeah. Now, that sounds like a better idea than towing the car all the time. But I want to change our viewpoint to the whole, the green initiative in China. My last trip there, my wife and I were coming down the Yangtze River in a riverboat. And we were surrounded by coal barges. And the coal was coming from the Hinfeland to Shanghai in that case, enormous amounts of coal. And the country was living on coal. So where are the solar panels? Do you see them? If you stood up in your coffee shop and walked out in the street, would you be able to see solar panels? Would you be able to see wind? I mean, wind turbines? What would you see? And what is driving this? Because obviously, if they're still using coal, they're going to have pollution. So they must be using something else. And they must be more advanced than they were. When the last time I checked, there weren't that many solar panels actually being in use in China, although they were ramping up their production of solar panels. Where do you see them? Well, Jay, that's a good question. I think the Chinese are looking at how to harness the solar power energy into solar plants, which do not necessarily have to be right in the middle city. As you know, it could be the outside of the city. I understand that China has actually certain, for example, certain cities have huge solar farms that's outside the city. And that solar farm is converted into energy that was sent and transmitted back into the metropolitan area. And I know for sure that they're switching off the coal because this year, the last coal-burning plant in Beijing was closed down this year. In fact, it was about a month ago it was closed down. So they're not using coal. No more coal in Beijing? No more coal in Beijing. That's something. And I think we have to look because China has always been the largest coal consumer. But in 2016, China accounted for 25% of the total $329 billion investment in new energy investment in nuclear energy. So I think they're taking positive steps. As you know, the U.S. not signed the Paris Accord. And China is taking that opportunity to put money back into renewable energy research, creating renewable energy. And one of their projects that understand this is one belt, one road, which commerce will go through middle China, up through the Northwest, up through the Middle East and up to Europe. And so one of the things that China's proposal is to do is to create those areas, a lot of renewable energy, which can be transmitted across borders. And feed it back to China. Yeah, that's really interesting. And so that's very interesting. So it's going to be a corridor where energy can pass through and goods will pass through. So you need energy to make commercial centers trade. So that's a big priority. So they're doing a lot of things. Russell, we're going to take a short break, if you don't mind. And then we're going to come back and we're going to talk more about renewable energy in China. We're going to talk more about their aspirations and goals. We have goals. Maybe they have goals too. Right now we're going to take a goal of one minute for our public service announcement break. We have this crazy thing going on today. I was just walking by and all these DJs and producers are set up all around Yeah, hi Jay. Yeah, I don't know what it is, but we're hearing music. We're hearing all kinds of interruption noises. What's going on in our coffee shop? You know, this is a coffee shop and it's just music in the background there. There were a lot of people that claimed they had no musical talent and then sat down and kind of Okay, it's Monday the four o'clock block. I'm Jay Fidel. This is Think Tech Asia with Russell Yu who joins us by Skype from Beijing. And we're talking about renewable energy in China. Really important. I remember when we started the, I guess it was a lawyer exchange program in downtown Honolulu. The lawyers who were over here were really interested in the fact that we had so much renewable energy. And their idea was to carry some of that knowledge, technology, you know, the whole initiative word about it back to China because China was hungry for that and wanted to get into renewable energy and the manufacture of renewable energy, you know, elements like solar panels. Now China is doing a lot of solar panels. I wonder if they're doing a lot of wind also, Russell, do you see wind turbines anywhere? Have you heard about that? I see wind turbines all over China, not in cities but outside the cities, not in rural areas where there is renewable energy be created by wind power, huge, you know, wind power plants. But I think, you know, the fact is that China is increasing, putting a lot of money, you know, in the solar farms, solar production in wind turbines, you know, they're making a major blitz to invest in that area. From what I understand is that the China leadership has put in roughly about, they're investing $367 billion next three years on these renewable energy power development. So what percentage are you at now? Now, you know, in Hawaii we're supposed to be 100% renewable energy by 2045. Other places I've heard about in Europe, you know, they're kind of ahead of us in that regard. And I wonder whether there is a public aspiration, a public goal in China to reach 100% renewable energy either in Beijing or a city or a province, or the whole country by a certain date. Well, I think that China is looking, you know, over a picture probably over the next 30 years, from what I understand, to make the complete switch over. You know, that's why it's investing a lot of money. This country is huge. And I think that, again, the opportunity takes itself because of the Paris Accord, Carpentry, Credit, all of this. So things are happening for China. And from what I understand is that, you know, they've already canceled, recently I've just read that they canceled like 100 coal-fired power stations switching to large solar farms. Okay. One interesting thing that's happening in the US and not Hawaii is liquid natural gas, LNG. And, you know, Hawaii kind of had the chance to do that, but Governor E. Gay kind of quashed it a couple of years ago with a public statement that he didn't like it. The Hawaii gas was trying to get that through. I think Hawaiian Electric was probably also interested in it. But right now, there's really no liquid natural gas in Hawaii. And I don't see a big prospect for it here. On the other hand, on the mainland, liquid natural gas is a big deal. There's lots of it. A supply that will last a long time. It's coming from various places on the mainland and also from Canada. And in fact, this administration is trying to negotiate deals through Japan to provide liquid natural gas to other places in Asia because it's cheap and it burns relatively clean, even if it's fossil fuel. But I wonder if there's any talk about LNG in China, whether China is negotiating for part of the American supply of LNG that's supposed to come through Japan. Have you heard anything about that? Well, I've heard too much about liquid natural gas. Okay. One of the things that you've got to think about is if we don't have to buy liquid neutral gas, we can create our solar energy. Why would we need to buy liquid natural gas? We become really hostage to somebody else. It's sort of like where U.S. has become hostage to fossil fuel. We need oil from the Middle East. And look what we ended up going into war and so forth because we're fighting over oil, strategic positions, strategic interests. But I think in the U.S. and how it relates to Hawaii, we've got to really carefully look at the numbers. For example, in 2016 in the U.S., the solar energy made up 39% of new electricity generation capacity in the U.S., increased it. And yet, we're seeing a lot of pushback in the U.S. where President Trump is advocating fossil fuel. And recently, there's a controversy because they're bringing some trade violation against China for the manufacturing of solar panels. It's too cheap. Okay. But the fact of it is that U.S. has only a 2% market in the world of manufactured solar panels. So why does it a big issue? It's not a big industry in the U.S. In fact, the bigger industry in the U.S. is actually in the solar energy where we should be concentrating that. In 2016, coal declined by 53% in the megawatt coming from coal. Natural gas was increased by 33%. But solar power, the generation of megawatts was increased by 5,000% in the U.S. So you can see the trend, the direction is toward solar energy. I know that natural gas is important. But again, solar energy is probably the area where maybe in the U.S. we're starting to back away from. So again, in 2016, 39% new electricity was generated by solar industry. 30,000 jobs are created in the solar energy industry. And these jobs were a lot higher. There were 374,000 jobs created in the solar industry in the U.S. as compared to 160,000 jobs for the coal industry. So all of a sudden, we're backing away from the greatest potential in the U.S. to deal with the solar industry. And it's not the manufacture solar panels in the U.S. It's the servicing. It's the repair. It's the operational aspect, the servicing where the new jobs are created. So again, there's a lot of questions there, Jay. Yeah. Well, as I said, back a few years ago, not too many, maybe 10. China was not really manufacturing a lot of solar panels. Now it has ramped up its production to be the world leader, I think, in manufacturing solar panels and quality solar panels. And of course, it can use those itself. And it sounds like it is. It's moving to a solar electric energy economy. And it certainly wants to sell them in the U.S. That's a great market for it. But we have these tariff issues. And Washington is imposing tariffs on solar panels. And I wonder what the talk is about that. It's problematic. Maybe it's still in play. I don't know. But my understanding is that the tariffs are really hard. The American tariffs are really hard on the Chinese solar panels. Yes, Jay. I think that's the trade dispute that it's starting to develop at this point in time, the proposal to smack China-heavy tariffs. Again, there may be some political dimensions there that you and I might want to speculate. But there was a lot of pushback, not from the China side, but from the U.S. side, where the experts are saying that that doesn't make sense that we should be putting those tariffs because U.S. manufactures only a small percentage of these solar panels. And the dispute arose because there was a Chinese subsidiary in the U.S. that went bankrupt. And the major creditor, I believe, or shareholder, some sort, brought that issue about the trade practices by China. Not the Chinese, but it was the creditor or somebody who had an interest in that Chinese subsidiary that raised that. And so now they're going on a full-frontal attack to seek heavy tariffs on China. But the question is that it may be something where it's actually burdened the U.S. because the U.S. cost of manufacturing is too great. The key to the Americans would be developing the technology piece that runs those solar things. U.S. has the patents for those. Again, that's the key where the money should be put in the R&D, the new technology. And then the servicing side where you create a lot of new jobs, not the manufacture of the hardware piece. That's something that doesn't make sense here. One other thing that comes to mind is on this show some years ago, it must be maybe three, four years ago, we had a young American couple from New York City as a matter of fact that went into a smaller city in China to teach English. That was, I guess it still is, an attractive situation for them. And the wife, the spouse who maintained the household in this city, had a terrible time in cleaning the coal dust off her pottery and her kitchen utensils and so forth. Her whole house was covered every day with coal dust. And she cleaned it and next day would be covered with coal dust again. And it was really trouble. In fact, at the end of the throw, they quit. They left, which is not so easy if you're in a contract to teach. And they came back to Beijing where they found the situation was better. My question though is what about these smaller cities? You say that Beijing is benefiting by the solar and renewable energy. What about the smaller cities where coal is the mainstay, where everything is happening in the city is coal? Sure, they knock off the last coal plant in Beijing, but what about all those other cities? There's a lot of other hundreds of millions of people in China. Are they enjoying the benefit of this renewable and this less polluted air? Well, I think, Jay, this recognition of their pollution that the China government has taken notice is not just only Beijing. It's all over the country. And yes, it's true, especially in the second tier cities, where the advances in technology haven't been fully implemented. But I see that there's a program that they're developing where some of the actual renewable energy farms are in rural areas. For example, there's a second tier city, I think it's called Huainan, where it's one of the largest solar panel farms in created China, where that renewable energy is going to be pushed out. It is a problem because there's too many people. Resources are limited. Now, you've got hydropower in the north. Everything that's where the Yangtze River, where that was developed years ago. And that has changed the area to some degree. But again, these changes take a little time. And I don't go off into the second tier cities, but I understand that the government has recognized us and they are trying to change the infrastructure to create new energy sources for them. From what I've seen is it has to be that direction because China has created the infrastructure here to move a lot of things, like the high-speed trade coast of all the cities, including the second tier cities. With that comes investments back into the cities business, which means, again, the effects of pollution. It has to attack in the same way it has attacking Beijing. Yeah. You mentioned early on about how the government, when the government wanted to do something like crack down on people who pollute, it could do it. No problem at all. And it would happen. And there would be sanctions that would force people to comply. But you know, I wonder about the comparison of the not-in-my-backyard phenomenon that we see in Hawaii, where people don't want renewable energy in their backyard. Sometimes they oppose it, especially in the case of wind. And on the mainland, the same thing happens, where through our community meeting process, we have a lot of objections are expressed. And I wonder how that works in China. I mean, for example, if I went out on the street outside of your coffee shop and asked people how they felt about renewable energy and solaring and wind, what would they say? They say they're behind it. Would they say they didn't care? Would they say they opposed it in some circumstances? And do you see protests? Do you see, you know, I know China has plenty of protests. Do you see protests about the placement of solar energy or wind turbines by people who don't like it in their backyard? You know, Jay, that's a question that could only come from a foreign perspective, because how they do things here, it's a cultural thing. Why it's so different? Because to some extent, while China is transitioning to a rural law society, it's still a part of the rural mad society. But it's not all bad because let's consider this. How did Singapore come out so well ahead of everybody in the pack in Asia? It's because it's a rural mad society cloaked in rural law. You had Liu Guangyu, who was actually a benevolent dictator, and who, like in the Chinese mode, it's a Confucian way of how we run things. We have somebody who's benevolent that's going to make all these changes for the people. You know, people here are struggling for the day we're living to have a job. You know, China has moved 500 million people out of poverty to do so, meant that you have to have somebody who's a strong figure who's going to, of course, chart that path. And people accepted more here because that's the culture. It's a Confucian culture. It's sort of like the group mentality that we have to follow, but we have to trust this, you know? So again, I think that the government, actually the country, people realize that we may be better off because we're seeing the effects of a changing society gets better. I can tell you something, Jay. All the roads in Beijing, even in the back streets and areas you wouldn't take it, the roads are all new. There are no potholes. You're seeing, experiencing daily changes. In this area where I live, they knocked down a lot of buildings that were illicit to business, to business quarters. They knocked it down because it was a health and a dangerous violation of the coast. So they're putting up new trees, new improved structures. So all that's changing. So again, it's sort of like this different cultural concept. In the U.S., the rule of law means that we have a lot of these hearings, people invited. We have people coming out of Woodward, and we have people who are expense or interest. And you and I, Jay, are lawyers, and we know the lawyers get involved in the picture. And the lawyers become a price of the progress. The lawyers get paid. There's litigation. Things get stopped. And at the end of the day, the great aspiration, the goals of this project, are shot. There's no money. There is no money to fund it. And we start from square one, so nothing gets done. So the two different models are too different. There are cultural concepts that are totally different. And I'm talking from the eyes of the Chinese, from their perspective, of what they see. And I think they understand that. They understand that the culture is Confucianism. So we follow, and we believe this is a group thing, and so they support it. You know, I used to say in the French, plus change, plus le mem, meaning the more things change, the more they stay the same. I've changed my view of that. Now I say plus change, plus change. It keeps on changing ever faster. And to close, Russell, could you tell our viewers how you say that in Mandarin? Well, I don't ever say it in Mandarin, but I would say this. What I was saying is two words. One is may bampa. May bampa means we can't do much about this. And the other word is kui. Kui means we can do everything. And I think that attitude pervades here. We can do everything. And so that's what I've seen in the last 15 years I'm here. So it has changed just for the better. Thank you, Russell. Sheshe, Sajin. Great to talk to you. We'll be back with more from Russell You in a week or two on Think Tech Asia. Aloha.