New essay: China is Not Pulling Up the Ladder

A critique of the idea that industrialization depends on other countries voluntarily giving up productive sectors, and that the interests of a few countries are the same as the entire Global South.🧵

feelingthestones.com/p/china-is-not… The debate over what China Shock 2.0 means for the industrial sectors of developed nations like Germany has been raging for a while. However, the narrative thread that China's manufacturing dominance represents a barrier to the industrialization of developing countries is more recent.

According to this narrative, China isn't vacating low-end manufacturing segments when it's "supposed to". Its critics say this constitutes "pulling up the ladder", denying other developing nations the opportunity to take over these segments and enjoy the resulting economic bounties.

This idea has been particularly prominent on my corner of Twitter in recent weeks, thanks to this Foreign Affairs article and the authors' accompanying working paper published via PIIE. It has seemingly since become something of a cause célèbre among the DC and Brussels think-tank circuit.

foreignaffairs.com/china/china-pu…

My last post about Zigui County and the Three Gorges Dam:

Many Chinese county seats are centuries old.

Zigui's isn't.

The entire county seat was transplanted to make way for the Three Gorges reservoir. Today, the old town is underwater.

How is the new one doing?🧵 Zigui County's Maoping Town (茅坪镇) is carved directly into the cliffs over the reservoir. It's one of the more aggressively vertical urban spaces I've visited, reminiscent of the mid-levels of HK (or Chongqing I suppose).

It's clear that this community exists because it was willed into existence by the needs of the resettlement. Many of the streets running parallel to the river have you driving between a cliff face on one side, and the 5th floor of a high-rise on the other side.

The most vertical parts of the town in the middle are residential with only a few smaller streetside shops. There are flatter areas at the top of the town, and at the bottom, closer to the reservoir's level. This is where most of the commercial activity seemed to be.

A practical guide about how to choose a good restaurant using Dazhong Dianping (大众点评), which is China's main restaurant directory/review/coupon platform, based on my 10+ years of experience using it almost daily...

But first, some general background information: Thread.🧵 Part 1: Background Facts

Dazhong Dianping started out in 2003 as an app focused on local restaurant reviews, predating Yelp by roughly a year. The founder said he was inspired by Zagat ratings.

From 2003-2009, its business was merchant listings and peer reviews. Then, in 2010, competitor Meituan entered the scene, originally as a straight Groupon clone, then adding a merchant directory. From 2010-2014, Dianping added coupons and flash deals, while Meituan added merchant listings and reviews. They competed directly with each other by offering huge discounts and subsidies to consumers, via basically identical app products.

In 2015, they merged in a 15B USD deal, somehow avoiding antitrust oversight that I'm sure would make that merger very difficult today. But 2015 was the era in which Kuaidi & Didi and Qunar & Ctrip were allowed to merge, despite each merger creating near-monopolies for their respective segments. A different time...

Together they became Meituan-Dianping (later, just "Meituan"), operating two parallel but basically identical apps. Of course, Meituan today has become China's #3 consumer internet platform company, after Tencent and Alibaba, operating Meituan delivery, Xiaoxiang supermarkets, rideshare bikes, portable phone banks rentals, lifestyle booking platform aggregation, etc.

To date, both Dianping and Meituan's respsective app platforms have survived the merger, with a huge suite of offerings besides just listings and reviews. My experience has been that Dianping has more merchant listings and reviews in bigger cities, while Meituan has much more robust coverage of smaller cities and towns. But they are quite similar. You can use it to find restaurants, bars, hospitals, hair salons, massages, KTVs...anything. Today I'll just talk about F&B.

Dianping is one of my daily use apps - in fact it occupies one of the 5 spaces on my hotbar, together with email, wechat, chrome, and the camera.

I am pleased to introduce the Chinese Invisible Cities Index (CICI) - some Friday fun. 😏

These aren't the smallest or poorest cities. These are the cities with the least aura vs. their population.

They make you say: "wait, I've never heard of it and it has HOW many people?"🧵 My methodology for the CICI was as follows:

Start with a normalized value for their registered hukou population (户籍人口), not current inhabitants (常住人口). That's considering the entire prefecture population, not just the metro downtown, because anyone or any part of a prefecture can contribute to reputation creation.

After that, subtract for anything that gives the prefecture city aura, name-recognition, any kind of notability at all. That includes things like:

- being a provincial capital
- having famous tourist attractions (esp. 5A)
- having a national brand headquarters
- having historical or cultural significance
- famous cuisine/dishes
- any memes associated with the city
- being the site of a major disaster or scandal (negative reputation is still reputation)
- having anything else that people think of when you mention it

The highest scores after subtracting become the leaders on my CICI. This methodology allows me to find not just the small and obscure cities, but specifically *cities that are far less famous than their population suggests they should be.* The data part of this was AI-assisted.

I haven't been to most of the places on this top 15 list - because I'd typically travel to places that have notable economic or touristic activity - which by definition perform worse in the CICI. 🤔

And look, I know almost every city has a bit of *something*, or else there wouldn't be be a city there at all. It's all relative, and subjective, and for fun, so if you want to disagree with the list, just be nice about it.

All that being said, here my top 15:

China's 15th Five Year Plan on Energy - Summary and Commentary Thread

On 25 June, the NDRC and NEA issued the 15th Five Year Plan (FYP) on Construction of a New Energy System. This is the key energy-related supplement to the main FYP released (in draft) back in March. 🧵 (LinkedIn repost btw)

The 15th Energy FYP lays out China’s energy objectives for 2026-2030, with emphasis on how the energy system will be structured around growth in end-user electrification, flexibility assets, and higher shares of clean energy before the 2030 carbon peak.

Had an educational conversation with a farmer last week in the Shanghai suburbs. He approached me while I was relaxing next to one of the canals and asked me if I had ridden my bicycle there (I had). We then started chatting about agriculture in SH.

"Where are you from?"🧵 "I'm from Anhui."
"Of course, Anhui. Maybe of the people working fields in the suburbs in Shanghai are from Anhui. I noticed before all of the strawberry greenhouses have Anhui people."

"It's not just strawberries. Almost all the agricultural work in Shanghai is done by outsiders. There are many of us from Anhui. Also some Henan, but mostly Anhui."

"So do you rent the land?"
"A big boss rents the land from the Shanghai people, then they divide it into smaller plots and rent it out to us."

"Where is the big boss from?"
"Also Anhui."

"Okay, so the big boss comes in, negotiates many land lease agreements with the Shanghai people here who don't want to farm the land anymore, and then makes a business renting that last back out to you. Do you live here all year round?"
"No, we go back between planting seasons."

"Do you still have fields back in your hometown?"
"We do, but most of them are rented out to big companies, to do large-scale farming."

"So you rent our your fields back home to big companies to do large-scale farming, and then you come here to the Shanghai suburbs to do small-scale farming?"
"Yes, that's right"

"Why?"

This Economist article on China's solar industry has some problems.

I won't waste ink getting all hyperbolic about it. I'll just highlight the places where I think a healthy copy-edit could have helped the piece a lot. 🧵

https://twitter.com/TheEconomist/status/2060506516776505392

It is a major oversimplification to say Chinese domestic demand for solar panels is falling "because the country's power grids have become overloaded with the things".

The real challenge right now is developers and banks still figuring out how to finance and build projects without policy-backed revenue guarantees.

Domestic demand was shored up in past years by a generous feed-in-tariff (FiT) scheme that ensured stable and predictable revenues. Following the the longstanding policy trend toward liberalization, last year solar generators were shifted out of FiTs and into a Contract-for-Difference (CfD) scheme. Guaranteed CfD volumes have quotas, with non-CfD volumes expected to find customers via open markets (i.e. merchant exposure). The piece acknowledges the policy change from last year, but doesn't seem to recognize the importance.

New solar capacity growth will likely be flat or even decline YoY in 2026 because generators and financiers are still inexperienced with merchant risk and renewable consumption quotas aren't quite high enough yet to drive more long-term renewable power contracting demand (which financiers rely on).

Yes, low prices in daytime spot power markets reflect temporal oversupply, but that's largely irrelevant for investment decisions, which are built around long-term contracts, not spot markets.

This post got me thinking about the interesting way small Chinese cities self-identify vs. the city that governs them.

The Yangtze River Delta is full of small cities with strong cultural and economic identities that have weak or zero feeling of kinship with their parent... 🧵

https://twitter.com/robert_baiguan/status/2050757825937432939

I've mentioned before in other essays how discussions of Chinese cities are usually focused on prefecture-level cities (地级市).

There are 337 prefecture-level cities in China, but IMO it's more appropriate to mentally organize them as "prefectures" in English (that is, an administrative tier smaller than a province and larger than a city).

For ease of governance purposes, many cities and counties in China are grouped together into "prefectures" in ways that aren't linguistically, historically, or culturally coherent; often they are simply geographically adjacent.

In this example, Robert was visiting Fenghua, which until 2016 was a county-level city governed by Ningbo (it is now a full district of Ningbo).

If we look at the administrative map below, we can see the denser urban area of what most people would recognize as "downtown Ningbo" (Jiangbei and Zhenhai) along with a large halo of suburban and exurban regions also governed by Ningbo. This is why I prefer a word like "prefecture" to translate 地级市. These areas not continuous urban agglomerations.

This thread is a deliberately nerdy look at Chinese administrative geography, but I think the outcome is helpful for understanding why people from small cities like Yuyao might not answer a simple question the way outsiders expect, and how we can think about these cities from a development perspective when we visit.

I rented a place for 5 days in this lovely seaside apartment complex in Bo'ao, Qionghai City, Hainan.

The same housing complex also had 12 lovely, unsold luxury villas, facing the ocean.

They were obviously abandoned and unlocked, so I gave myself a tour...😁

A fun thread. 🧵 As you can see, these units were designed to be quite fancy, with 4-5 bedrooms, pools, balconies facing every direction, a vaulted ceiling in the living room, even an elevator...

This complex was completed in 2013. The apartments all sold alright. But not a single villa...

Just back from 10 days in Hainan. A few practical observations on transportation to/around the island - this seems as good a place as any to start a place review. Hope it's helpful to anyone planning a trip.

There are currently three commercial airports in Hainan: Sanya, Haikou, and Qionghai.

The first two have daily connections to pretty much any large city in China, plus a handful of international flights. Qionghai (琼海) is much smaller, with only a few flights each day, built primarily to serve visitors to the Bo'ao Forum ("Asia's Davos") which just wrapped up last week.

There is also a new commercial airport under construction in Danzhou (儋州), an industrial hub on the northwest coast, scheduled for completion by ~2030.

Bonus: If you fly to Hainan, there's a good chance you'll get to try Hainan Airlines, widely considered China's best airline. I flew in and out of Sanya Phoenix Airport, which is a rare example of an airport in China that feels undersized for its passenger load (most airports feel...very overbuilt).

There’s a brand-new Terminal 3 (opened Feb 2026) meant to ease perssure on Terminal 2 (2018) and Terminal 1 (built 1994, expanded 2011). But when I passed through, Terminal 1 still felt overloaded and disorganized - and this wasn't even peak season. March is a shoulder season before the summer lull (rain and typhoons).

But even the creaky old Sanya Terminal 1 still had better dining options than Shanghai’s Pudong, which remains an utter disgrace of a flagship international airport no matter how shiny it looks, and I will never stop hating on it until it does better.

Image: Sanya Airport Terminal 1

For my own education, I've been trying to make sense of China's industry exposure to the Iran conflict and Hormuz closure. I wanted to share what I have now:

My Level-1 taxonomy includes 5 buckets of products that are one conversion step away from crude oil or natural gas:🧵 Bucket 1: Refinery‑derived, petroleum‑based finished products (both fuels + non‑fuels)

I defined "finished refinery products" as mostly a pricing channel here. This includes the fuels: gasoline, diesel/gasoil, jet fuel/kerosene, fuel oil/bunker, and petroleum coke as well as non-fuels: bitumen/asphalt and base oils/lubes/solvents.

China refines most of its gasoline/diesel/jet fuel domestically, and has substantial policy levers (large strategic crude reserves and commercial inventories, export quotas) to stabilize local availability. The short-/midterm effect is more likely to be moderately higher costs, rather than shortages, as long as the reserves hold out (and they should be good for quite a few months). Anode-grade petcoke for aluminum smelting is a potential niche outlier here, as there is more import exposure, but that's really it.

Meanwhile, markets for non‑fuel refinery outputs like bitumen are slower‑moving and simpler to buffer via demand rescheduling and/or substitution, with moderate risk mainly via general price levels.

This is the least-concern bucket overall IMO.

China’s coal economics are shifting from "generate electricity → get paid" to a messy stack of flexibility revenues, grid services, and capacity payments.

The age of simple coal baseload cash cows is already over. But that doesn't mean it's easy to kick out coal. 🧵

https://twitter.com/CleanPowerDave/status/2021166302916698163

In a increasingly variable renewables-heavy system, only the coal plants that can ramp, cycle, and stay available on demand will survive. And the plants China's building these days are *tricked out*.

I'm talking lower minimum stable load (20-30%), faster ramping capability (in MW/minute), reduced hot/warm/cold start times, reduced start-up fuel burn, world-class fuel efficiency (<250g of coal/kWh), better thermal cycle stress management, modern DCS for better turbine/governor control and AGC tracking for ancillary revenues, ultra-supercritical heat rates...the works.

Older subcritical coal plants weren’t built for this new world. Those that can retrofit affordably will. But many can’t retrofit cheaply. They’ll be pushed out as the system prioritizes flexible, fast-response assets.

Some wonky add-on thoughts about this China green electricity/decarbonization of aluminum FT story:

1. Electrolytic aluminum smelting is one of the most energy-intensive processes in the world.

There's a joke that aluminum is "solidified electricity", and it's kinda true. 🧵

https://twitter.com/AssaadRazzouk/status/2020348532440592801

2. For this reason, globally, about half of all primary aluminum is produced using captive onsite power plants, and roughly two‑thirds of that captive capacity is subcritical coal.

This is the core reason aluminum has such a stubborn emissions profile.

nature.com/articles/s4155…

On China's Clean Energy "Morality":

There's an emerging "acceptable" way to talk about China's cleantech push: that it's less driven by altruistic intentions on climate change, and more driven by self-interest like economics, energy security, and pollution control. 🧵

https://twitter.com/mattyglesias/status/2009796521642840424

mea culpa: I contributed to this narrative in the past to make it more palatable in media interviews. It's an easy one for China-skeptical editors and readers to accept: that this "good behavior" on climate issues is driven by self-interest that happens to be socially beneficial.

So many times, to so many people, I said things like: "what does it matter what the motivation is, as long as it works?" I wanted to emphasize the positive outcomes and so I embraced a convenient narrative that helped me get there.

Of course this works, but it's only half-true. Which uncharitably means it's also half-false. Here's why...

Did Li Keqiang really say 600 million Chinese people earn <1000 CNY a month?

No, not quite. That comment is widely misunderstood, as explained in this paywalled article from The Economist.

If you don't subscribe, I'll summarize in a thread.🧵
economist.com/finance-and-ec… So where did this number come from?

In May 2020, then-Premier Li Keqiang famously said:

"...人均年收入是3万元人民币，但是有6亿人每个月的收入也就1000元, 1000元在一个中等城市可能租房都困难..."

"Our average annual income is 30,000 CNY, but China has 600m people with a monthly income of just 1000 yuan. You can't even rent in a mid-sized city for that much".

That's the phrase that was widely misunderstood, with Li's unfortunate framing adding to the confusion. It got a lot of attention both within and outside of China.
china.huanqiu.com/article/3yQjRY…

China’s New Play for Mid-Duration Energy Storage: Carnot Batteries

On December 25, State Power Investment Corporation (SPIC), announced its prototype “Chunuo” thermal storage system had passed expert review and met its performance targets.

What is it and why does it matter? 🧵 A Carnot battery, also called a pumped thermal energy storage (PTES), is an energy storage system that converts electricity to heat and cold, then converts it back to power when needed.

Instead of using chemical reactions like lithium-ion batteries, it relies on thermodynamics.

The only thing OP should regret is misleading his followers with his clunky charts and sloppy, unsophisticated analysis.

He has sadly ignored more tactful efforts to correct these issues, so enough is enough. Time to be blunt...

Let's break it down in a long thread.🧵

https://twitter.com/robin_j_brooks/status/2004221427382436188

1. The Premise is Flawed

If we must go about assigning a silly label like "green superpower" (which IMO is really just vanity contest clickbait pretending to be analysis) then it's too narrow to define "green superpower" by what percentage of a country's power comes from renewables. This is immediately obvious when we look at the list of countries that lead the world in % of power from renewable energy today - see any superpowers in there? It's lovely to be blessed with abundant hydropower or geothermal resources, but that hardly drives global change.

China, at around 36% renewables (and rising of course) both installs more than the rest of the world combined, and exports the technology to green the power sectors of developing nations globally. If we must have this conversation, then it should acknowledge absolute volume and international impact, where China is clearly dominant...

This post going viral reminded me of an interesting bit I read recently about "rising superstars" in China among the ranks of young cadres.

To be considered a high-flyer superstar, you need to be advancing through China's political ranks at a VERY advanced pace. Let's look. 🧵

https://twitter.com/DanCollins2011/status/1989874329308316120

The best way to measure "rapid advancement" is not necessarily by the title they currently hold, but the rank within the state civil service system vs. their age.

For instance, this is Mr. Wang Bo, currently one of 7 vice-mayors of Longyan City, Fujian. He is just 38 years old.

My newest essay on Feeling the Stones comes from Linfen, Shanxi, which was infamously declared "the most polluted city in the world" by the World Bank in 2006.

But I had a different reason for visiting: I wanted to assess life in China's "most median city".🧵

(link at end) If you've followed me for a while, you'll know that for 3+ years now, I've protested the over-sampling of opinions from China's 1st-tier cities and pursued this idea of capturing China's "median zeitgest" from smaller cities.

This 2022 trip started it:

https://x.com/pretentiouswhat/status/1541753290576531461?s=20

Twitter tourist slop.

I'm not in the mood to be polite today. If you truly believe all this trash, you shouldn't be teaching; you need to be taking classes instead.

Let's break it down: 🧵

https://twitter.com/slantchev/status/1984634570353099009

1. "...the massive production, which relies on exports by design".

Meaningless. How would you prove any industry relies on exports "by design"? Unless you've got a recent planning document that says "we will develop this industry with exports in mind", how could you determine production is "designed" for exports? Words have meaning. Use them with intention.

But more importantly than whether export reliance is "by design" or not, the bigger question is: is there actually reliance? Reliance that means something - that is usable for leverage? Since this is something we can asesss quantitatively, we should be very careful about making such claims without data.

The answer is: no. In 2025, very few Chinese industrial segments rely on export demand to ANY foreign country (not just the US) to any considerable degree, expressed in terms of revenue. The major exception is consumer electronics, with a honorable mention to electrical equipment (e.g. solar panels). It wasn't always like this. In decades past, production in many segments indeed was stimulated mostly by export demand. But that's the past. The main driver of this shift is growth in Chinese consumer demand growth- they are now consuming much, much more of Chinese production than their international counterparts.

Of course Chinese policymakers would like consumer demand growth to be even higher. We see lots of signs consumption demand will be a big focus in the 15th FYP. But the longer you go on believing it's *weak*, the longer you will miscalculate re: trade and exports - sometimes catastrophically.

I've just wrapped a 10 days on the North Yunnan loop route, hitting Dali, Lijiang, Diqing/Shangri-la, and Nujiang. Some of the most beautiful places I've seen in China.

Lots of essay content from the trip coming soon, but here's a summary of the route first, 1 tweet per city.🧵 ...oh, and I'm writing this partly as a travel report/guide for others who might like to do a similar tour in the future, and partly as a foundation for the essay content that's coming next.

So I'll try to provide both travel details and some background info for each spot...