China Overtakes U.S. as Top Energy Consumer, Alternative Energy Shares Surge in Asia


In Asia Wednesday Hong Kong's Hang Seng Index rose 1.1% to close at 20,487 and China's Shanghai Composite Index added 0.3%, ending the day at 2,535. In Japan the Nikkei 225 Index fell 0.3% to 9,279.

China has now become the world's number one energy consumer, overtaking the U.S., according to figures just out from the International Energy Agency. The organizations findings show that demand for energy in China has doubled over the last decade, due to the country's staggering economic boom and unprecedented growth over the last 20 years, as well as a rapid increase in population. A quick look at the smog belching out over brand new buildings in just about any Chinese city should make this news unsurprising.

But China is denying the charges, calling the energy watchdog's information "not very credible," according to the Financial Times. One official said the IEA "overestimated China's energy consumption and carbon dioxide emissions." While China's own data suggests that its energy consumption is not as high as the IEA claims, even its own lower numbers put it on par with energy consumption in the U.S.

Today shares in alternative energy-related companies surged in China. Baoding Tianwei Baobian Electric, which makes solar panels, surged 4.3% and Jiangsu Huasheng Tianlong Photoelectric, a developer of photovoltaic equipment, climbed 3.3%. Huaneng Power International, a major nuclear power company leaped 2.6%.

Meanwhile, traditional and more polluting energy producers closed lower today with Yanzou Coal Mining dropping 1.3%, China Coal Energy falling 0.8%, Shanxi Xiahan Coal & Electricity Power down 0.6%. China Yangtze Power, which generates power from the Three Gorges Project, was up 0.5%.

Also in China, airline shares climbed on increasing air travel in the region. China Eastern Airlines skyrocketed 5.9%, China Southern Airlines soared 3.3% and Air China jumped 2.6%. According to data released by OAG, Beijing has now surpassed London's Heathrow as the second largest airport in the world measured by seat capacity, surpassed only by Atlanta Hartsfield International.

In Hong Kong, energy companies also rose with China Resources Power gaining 2.8% and China Shenhua rising 2.6%. Among commodity producers, Chalco, or Aluminum Corp. of China, surged 3.7% and Cnooc, the oil exploration company, advanced 2.4%.

Things were also looking good for many Hong Kong banks including HSBC, which rose 2.2%, Bank of Communications, which advanced 1.8% and Bank of China, which added 1.2%.

New World Development racked up the biggest gain on the Hang Seng, rising 3.5%.

In Japan, car makers were among the worst performers, stung by a rise in the yen against the dollar. Isuzu Motors slumped 5.3% and Mazda tumbled 2%. Toyota lost 0.8% and Toyota parts manufacturer Jtekt fell 1.9%. Hino Motors, a maker of diesel buses and trucks, nosedived 5.3%. According to the Financial Times, Honda is blaming managers for strikes at its plants in China that interrupted production and slashed the number of vehicles produced by nearly 20,000. Honda slipped 0.2% today. But even if it had the cars to sell, it's not clear anyone would be buying them right now.