Seriously hard to comprehend how someone can juxtapose these two sets of thoughts in one’s brain at the same time.

Thought #1: That trying to achieve energy sovereignty is an intelligent goal for oil-importing countries …

https://twitter.com/cjhandmer/status/2034486003894002017

… Thought #2: That HSR in China — which has displaced huge volumes of gasoline and diesel usage in the world’s largest oil-importing nation by electrifying transport — was the numero uno sign of “bad capital misallocation”

https://twitter.com/glennluk/status/1956580531560128755

Oh and kerosene / jet fuel usage as well.

Meanwhile, China is going ahead and building — at scale, to be clear — infrastructure that can synthesize hydrocarbons from renewables.

https://twitter.com/glennluk/status/1808175437668876310

This is something that many folks still don’t understand — or stubbornly refuse to acknowledge.

China is moving away from coal-fired generation to renewables because it is less expensive to do so. Coal will account for less than half of power generation today, down from ~80% just 15 years ago.

The key to its renewables and related electrification boom was lowering its production cost below fossil fuels.

https://x.com/GlennLuk/status/2020348532440592801

Recently enacted policies like RPS now mandate a minimum amount of renewables-source power for heavy industry.

New datacenters must be built with at least 80% renewables sourced power.

https://twitter.com/glennluk/status/1943569358170787929

The key to this inflection point was economics: Driving down the manufacturing and deployment cost of the entire supply chain and key enabling technologies, from solar cells to wind turbines to battery storage to high-voltage transformers to robotics and machinery for installation and maintenance.

And since cost/performance gap continues to widen (renewables cost ↘️ while extraction costs of fossil fuels ↗️) the pace of transition to renewables will not slow down, but accelerate.

Because:

(1) it's actually ~57% today (2025)
(2) it was ~81% in 2011
(3) at the current trajectory it is headed to sub-20% over the next decade

China has found a way to grow its economy without incremental emissions, which have plateaued.

This may not be especially titilating for Robin, but I think it is exciting for policymakers in many countries, especially developing ones for whom lack of access to fossil fuels has historically been a growth constraint.

https://x.com/GlennLuk/status/1997351102954586128

(1) Robin's chart doesn't have a source, and I don't know how he's calculating 65%.

What I do know is that China's power grid will generate ~10.6 PWh in 2025 and solar/wind/hydro/nuclear will account for ~4.6 PWh. This is up from 10.1 PWh and 3.4 PWh, respectively, in 2024.

My suspicion here, given that this is a monthly series, is that Robin is drawing from the NBS monthly data series which he may not know excludes small-scale plants.

These figures are adjusted for in the annual numbers.

https://x.com/GlennLuk/status/1620987635719372802

Nice tale, but one not supported by data measuring socioeconomic inequality.

Gini coefficient for wages peaked in the late 2000s under Hu.

For a broader version incorporating capital income, it did not peak until 2019 when multi-year efforts to rein in (i) corruption and (ii) uneven land appreciation started to take effect.

https://x.com/GlennLuk/status/1991004398093545600

Gini coefficient for wages peaked in 2008.

See this 🧵 from last year + follow-on discussion below explaining how.

https://twitter.com/glennluk/status/1837929183541866563

Gini coefficient incorporating wealth effect (my own analysis) peaked in 2019 👇.

In the following posts I will also explain why and provide further context.

https://twitter.com/glennluk/status/1837929208888414558

There are multiple potential explanations for why trade between China and certain developing countries like Morocco are growing robustly beyond the narrowminded explanation Robin offers below (and consistently, in other threads).

Indeed, the most obvious one is that this is simply a continuation of a multi-decade trend of increasing trade between the two countries.

Often the most obvious explanation is the correct one, and I think that is the case with Morocco (and developing economies in general) as I will explain here in this 🧵.

https://x.com/GlennLuk/status/1984619928649875737

To prove his "transshipment" hypothesis at this level, Robin needs to provide more than just unsupported assertions.

The obvious approach would be just looking at the key categories that the U.S. imports from China and compare to the large import growth areas in a country like Morocco.

OEC is a nice place to start.

Cursory review of recent growth drivers suggests minimal correlation between the categories that are driving export growth in Morocco (cars, cranes, iron blocks) vs. declines in the U.S. (packaged medicaments, telephones and computers).

Free cash flow is a measure after capital expenditures and incorporates fluctuations in working capital.

Since founding, BYD's modus operandi has been to re-allocate every dollar of operating cashflow + as much capital as it can raise — as non-dilutively as possible — to support the needs of a rapidly growing business.

Frankly, it is financially illiterate to describe re-investment back into a growing business as "losses". Negative cashflow is a cashflow item and — especially if related to CapEx and working capital fluctuations (which I will address below) — is conceptually different from "losses" which is an income statement term.

https://x.com/GlennLuk/status/1983939382156443991

A better approach is to consider how much long-term capital the company has raised an compare it to the scale of operating capacity that capital has enabled.

We can look at this from BYD's latest balance sheet, which I have summarized here:

To date, BYD has taken in a total of ¥340B in debt and equity funding.

This number includes ~¥82B of ST/LT borrowings and ¥258B of equity (or equity-like) funding.

The equity funding includes ¥107B of "undistributed profit" which is similar in concept to retained earnings (we'll get back to this point in a bit).