Do These Dots Connect?
May 2024
Is it just me, or have you noticed a myriad of catastrophic events playing out on the world stage lately? From fires and explosions to bridge collapses and more, might there be some common thread in all this?
Granted, we’re all so busy living our daily lives, managing our careers and taking care of family, there is precious little time to even try to decipher whatever mischief there might be behind some of these goings-on.
A few months back I participated in a multi-day CEO summit along with some of our nation’s leading thought-leaders—military brass, think-tank subject matter experts, and corporate executives—to reflect on such events and project where we might be headed.
The panel discussion that caused me the most trepidation featured some well-regarded retired military general officers and presidential cabinet members. The panelists concurred that not only is China’s economy larger than ours, but the Chinese Communist Party is well on their way to supplanting the U.S. as the global high-tech powerhouse in ten key manufacturing sectors. This was in reference to the CCP’s Made in China 2025 Initiative—a 10-year plan aimed at updating and expanding China’s advanced industrial manufacturing base in the following supply chain sectors:
Ocean Engineering Equipment and High Tech Vessels
Machinery and Robotics
Aerospace and Aviation Equipment
Railway Equipment
Agricultural Machinery and Equipment
Pharmaceuticals and Medical Devices
Electrical Power Equipment
New Information Technologies
New Energy Vehicles
New Materials
Ruminating on all this after the conference, I began to detect some potential connections between the Made in China 2025 Initiative and various catastrophic incidents taking place across the US. I’ll review some of them here, starting from the top.
Ocean engineering equipment: Consider the Dali—the 95,000-ton container ship that seemingly lost power before reaching open water and caused the collapse of the Francis Scott Key Bridge in Baltimore, MD on March 26.
Knowing 80% of global trade is carried out by sea, my curiosity led me to discover that China produces more cargo ships than all other countries combined. Over the past year, Beijing reported an impressive 12% increase in shipbuilding. Meanwhile, the US produces just 1% of all cargo ships.
Now let’s consider all the other kinds of massive vessels that will be required just to clean up the collapsed Key Bridge—like enormous barges and floating cranes with several hundred-ton lift capacity. One of the largest floating cranes on the East Coast, which can hoist up to 1,000 tons, will be needed to lift the bridge trusses after they are cut up. Then, to rebuild the bridge, heavy machinery and engineering equipment like aerial cranes, aerial lifts, excavators for digging trenches, skid loaders, telehandlers for hauling, and hydro platforms to enable below-bridge access will be required. All this kind of machinery and engineering equipment plays right into the hand of the Made in China 2025 Initiative.
Further investigation led me to discover that—according to the American Society of Civil Engineers’ Infrastructure Report, March 2021—46,000 of America’s bridges are in “poor” condition, with 17,000 at risk of collapse from a single hit, as happened in Baltimore. The ASCE estimated it would cost roughly $6 Trillion over the next decade to bring America’s bridges, roads, and airports to a safe and sustainable level. Could the Baltimore Bridge be just the first in a series of such calamitous events, given the number of at-risk bridges and the financial opportunity for those selected to repair / rebuild them?
Next, let’s consider airports and aviation equipment. The Airports Council International’s report on U.S. Airport Infrastructure Needs predicts there will be a 150% uplift in air traffic—both in passenger and cargo—by 2040. Yet many US airports lack the capacity to bring on new airlines or introduce new routes. New airports, new aviation equipment, and a myriad of other supporting technology will be in demand over the next 15 years.
As of now, five of the world’s top six aircraft / aviation manufacturers are US companies. #1 is Boeing. Of course, Boeing has had several issues with their 737 passenger jets over the years. Five years ago, two 737 Max 8s crashed just five months apart. In early January of this year, a 737 Max 9 lost a rear door plug mid-flight, causing all similarly configured Max 9 aircraft to be grounded for weeks. Then Alaska Airlines and United found loose parts on their grounded Max 9 jets. In early February it was reported that mis-drilled holes in window frames required the rework of 50 planes.
Less than one year ago, China’s first large “homegrown” passenger jet, the C919—built by the Commercial Aircraft Corporation of China (COMAC)—took to the skies. China has a long way to go to catch up to the US in this industrial manufacturing category, but the demand is there—especially if airlines and their passengers should lose confidence in Boeing.
Now consider railway equipment. According to the Bureau of Transportation Statistics, from 1990 to 2021 the US experienced over 54,000 train derailments. That equates to over four derailments per day. The same derailment trends continue to this day.
According to analytics firm Spherical Insights, the global railroad equipment market was valued at $75B in 2021 and is projected to grow to about $93B in 2030 (the rising price of fuel worldwide is already shifting freight transportation from trucks to rail). According to Statista.com, in 2020 the Chinese CRRC Corporation Limited was by far the world’s largest “rolling stock” manufacturer. At $36B in revenue, CRRC captured half of the world’s expenditure for wheeled vehicles that move on railways.
Finally, let’s discuss agricultural machinery and equipment. Mayhem (or industrial sabotage) has been running rampant, considering the 1,900+ food production companies, food processing plants, and food storage and supply buildings that have either blown up or burned down in the US since 2021. In just the last three months, we had the massive Texas panhandle fire (the largest in American history) that killed over 7,000 beef cattle. In April came the Dimmitt, Texas dairy farm explosion that killed over 18,000 dairy cows. Such catastrophes will drive the stricken food production and processing businesses to purchase copious quantities of new agricultural machinery and equipment—assuming they choose to remain in operation. What an opportune time for the Made in China 2025 Initiative.
I could go on and share more sordid stories that pertain to the remaining industrial sectors targeted by China’s 10-year plan, but you get the message.
Perhaps the various calamities mentioned above are simply amazing coincidences. But then again, maybe the dots connect somehow. As Sherlock Holmes deduced in The Sign of the Four, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth.”
You be the judge.