Rooster Crows A New Pecking Order

Here we go, strutting into the year of the Rooster… we said the Monkey would be disruptive and it did not disappoint, leaving us with a topsy-turvy world. President Xi’s Davos address leaves us with no doubt that the Rooster crows a new pecking order. As China drives structural changes at home and leads the climate fight globally, stay ahead of this changing waterscape with our 5 trends. Since the Rooster has a penchant for tidiness, we expect the central government to continue driving action in 2017.  Important changes were made in environmental policy over the last year from enforcement to finance and we summarise these into 5 regulatory trends. Be sure to catch up on them. Leading a low carbon future will likely see China rethink its global critical raw materials supply in the 13FYP. So this month, we also review the implications of these “dug-up in China” materials, many of which are significantly supplied by China with multiple WTO dispute cases. We may avoid a trade war, but a global trade rebalancing is imminent with China’s own demand for resources rising. Mother hen characteristics will also be displayed with China striving to protect river basins; supporting new growth industries while revamping/revitalising old industries; and pushing to embed environmental/water risk into financial valuations.  This unwavering support for new growth industries could disrupt. WWF’s Jean-Marc Champagne says an aggressive push for electric vehicles in the 13FYP could displace 1 million barrels of crude oil per day by late 2020s; while Zhang Chun from Chinadialogue expands on the fall of the cement industry and the painful transition into high end manufacturing. Such reform and innovation against a backdrop of looming trade wars in 2017 signal a year that is precariously balanced. In such times, it is best to ignore petty disputes and look for holistic solutions like Veolia’s innovative T Park in Hong Kong. Nina Cambadelis explains how this state-of-the-art sludge treatment facilities can also close the loop on water and energy.  The new China norm is de rigour: a water-nomics path where economic and resource planning are in sync is inevitable. Despite the uncertainties and elusiveness of business unusual, there is “firm resolve to forge ahead”. We are at the dawn of a new era, and dawn always favours the East. Get with the program and stay prosperous: make sure you are not walking on eggshells but laying golden eggs. Happy lunar new year!