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CHINA ECONOMIC ANALYSIS BlowMe AI ... China Just Made 10 TRILLION Economic Move… U.S. Didn’t See It Coming! PLAY YOUTUBE VIDEO Original article: https://www.youtube.com/watch?v=6ZiH6lycz0A Peter Burgess COMMENTARY I don't know the origin of BlowMe AI information and essentially do not trust it. However, having said that, the ideas being communicated are interesting ... and in many ways make a lot of sense. Peter Burgess
China Just Made 10 TRILLION Economic Move… U.S. Didn’t See It Coming! BlowMe AI Nov 14, 2024 77.3K subscribers China's approval of a massive 10 trillion yuan ($1.4 trillion) debt package aims to address its struggling economy and local government debt crisis. Finance Minister Lan Fo'an announced the plan will allow regional governments to borrow 6 trillion yuan to replace hidden debt, plus 4 trillion yuan in special bonds over five years. This strategic move comes amid falling fiscal revenues, property sector challenges, and potential trade tensions with the U.S. While some analysts praise the package's scale, others question whether it's enough to meaningfully stimulate China's economy. Join this channel to get access to perks: / @blowmeai Transcript ranscript 0:00 speaking of China the country is shelling out nearly a trillion and a half dollars to tackle its local government debt problems China has approved a staggering 10 trillion un or $1.4 trillion debt package to bolster its struggling economy this action comes as a shock to many especially the United States which has been dealing with its own economic challenges and the return of Donald Trump to the White House Finance Minister Lan faan announced the details of this massive debt package at a press conference over the next 3 years Regional governments will be allowed to borrow up to 6 trillion un or $838 billion to replace their hidden debt which is typically owed by risky local government financing platforms additionally local governments will have access to a separate 4 trillion un or $558 billion quota for special local bonds over the next 5 years aimed at further reducing their debt Holdings well that 1.4 trillion is supposed to be 1:00 stimulus but it's not stimulus in the traditional sense in that it's not being used to stimulate demand so 60% of it has been allocated to a program for local governments to issue new bonds over three years including this year to pay off what the government calls as hidden debt so this is debt that's off balance sheet or um unrecognized which has been a primary source of risk in this economy so in addition to that uh local governments will be allowed to issue more special bonds over 5 years to raise funds for the same purpose uh the stimulus is indirect so the Finance Minister said that $85 billion over five years would be freed up uh because of this refinancing of the debt that local governments would be able Lan stated since the beginning of this year affected by a variety of factors the Central and local government fiscal revenues have fallen short of expectations China's decision to 2:00 implement such a drastic measure stems from its recent economic struggles since the beginning of 2023 Central and local fiscal revenues have fallen short of expectations largely due to years of tight pandemic restrictions and a crippling real estate crisis consequently local government coffers have been drained leaving authorities across the country grappling with mountains of debt and few resources to kickart economic growth the problem has become so so severe in some areas that cities are now unable to provide basic services and the risk of defaults is on the rise Lan foan revealed The Staggering scale of China's hidden debt which stood at 14.3 trillion un or $1.99 trillion at the end of 2023 the government's goal is to slash this amount to 2.3 trillion un or 320 billion by 2028 while some analysts see the debt package as a step in the right direction others remain skeptical about its Effectiveness Mark Williams Chief Asia 3:04 Economist at Capital economics noted that the package only amounts to about 0.5% of China's current gross domestic product spread over 5 years clearly that's not going to make any appreciable difference he wrote in a research note today's fiscal announcement is another disappointment for those expecting substantial stimulus on the other hand Larry who Chief China Economist at mcor bank believes the scale of the debt swap exceeds expectations however he also pointed out that it is unrealistic to expect the national people's Congress to approve a massive fiscal package as the policy goal is to achieve the GDP growth Target and reduce risks not to meaningfully reflate the economy it may be disappointing for those who are expecting the NPC meeting to approve a massive fiscal package but the expectation is unrealistic because the policy goal is to achieve the GDP growth 4:02 Target and reduce tail risks not to reflate the economy in any meaningful way he said China's economic challenges are indeed daunting in the third quarter of 2023 the country's GDP grew by just 4.6% compared to the previous year only slightly higher than the 4.5% forecasted by economists pulled by Reuters there is a real risk that Beijing may miss its annual growth Target of around 5% after a summer of dismal economic news China's leader XI Jin ping finally decided to move forward with a much-needed stimulus package in late September primarily focused on monetary measures since then economists have been anticipating additional stimulus measures worth up to 10 trillion un to restore confidence in the world's second largest economy it is important to note that China's debt swap program is a departure from its previous allout stimulus strategies instead of directly injecting money into the 5:04 economy this plan aims to repair Municipal balance sheets as a longer-term objective Finance Minister Lan faan has signaled that more stimulus is on the horizon with some analysts suggesting that Beijing may be saving ammunition for a potential trade War under a second Trump Administration the measures announced by China confirm the scale of the local government debt crisis the international monetary fund estimates that hidden debts amounted to 60 trillion when 47.6% of GDP at the end of 2023 although China puts the figure at a lower 14.3 trillion un the debt swaps are expected to save local governments 600 billion UN in interest payments over the next 5 years swapping hidden for official debt is expected to save 600 billion W in interest for local governments over five years Reuters reported Lan foen also 6:02 reiterated additional support measures such as policies to support state sector purchases of unsold Apartments reclaiming undeveloped residential land from developers and replenishing the capital of big State Banks be able to spend uh the Finance Minister also added that new measures would promote State purchases to buy idle land and unsold homes so that in theory would help the property sector but uh there's nothing in this plan that directly help helps and gets money into the hands of consumers and companies to stimulate demand however he did not provide details on the size or timing of these more direct stimulus measures Lan also reiterated officials will issue policies to support state sector purchases of unsold apartments and reclaim undeveloped residential land from property developers as well as replenish the capital of big State Banks Reuters noted many economists argue that stronger consumer stimulus is needed to revive China's economy the country faces 7:03 tariffs on its exports from the US and other nations while low wages High youth unemployment and a weak social safety net keep household spending low China's household spending is below 40% of its GDP which is 20 percentage points below the global average analysts believe that Beijing is likely holding back some stimulus waiting for more clarity on Trump's China policies before acting they may also want to avoid the appearance of overreacting to the US election policy makers probably saw no need for a robust response to Trump's Victory before he takes office given the relatively restrained post-election Market response said Duncan Wrigley Chief China Economist with Pantheon macroeconomics next year is a different matter but officials will take that as it comes Market reactions to China's debt package announcement have been mixed 8:00 some investors were disappointed by the lack of details on additional fiscal spending to directly stimulate the economy While others had expected support for purchasing property inventories the uan weakened against the dollar following the announcement and East Asian equities initially extended gains but later retreated to really have a positive for markets you want to see something which is 2 trillion or above specifically talking about consumption related stimulus Bernie akong CIO at UBS o Conor Global multistrategy Alpha told Bloomberg TV chenl hang an expert on the Chinese economy at the Peterson Institute for international economics said what they have announced is a package meant to manage risk stabilize the economy to prevent it from falling further instead of directly stimulating domestic demand which is actually what I think they should do because I think the number one challenge the Chinese economy faces now is deflation Wong said that Beijing has a fundamental opposition to handing out 9:03 cash they don't like welfarism he said adding that Chinese officials think it would encourage people to become lazy investors are now closely watching for the December pollit Bureau meeting and the central economic work conference where greater Clarity on the US trade stance and China's fiscal strategy is expected right uh yesu we know that Beijing had an earlier signal that fiscal stimulus is coming but you know as Olivia had mentioned it was short on detail frustrating uh investors so essentially at this point do you think investors are generally going to be happy with today's announcements I think that's a great question thanks for asking I think it's really a mixed result today and I'm not I'm not sure that all of the investor will feel happy because there are two things that investors are watching one is the amount of that swap as Olivia mentioned is 10 trillion or 12 trillion already right already the other thing that investors are watching is how much 10:02 additional fiscal money fiscal bond that the government is willing to take uh to stimulate the economy however the second part as I mentioned there's not much mentioning on the additional fiscal spending um uh in details this time so that's I think uh where the the the broader um P mistake come from the geopolitical context and trade tensions cannot be ignored when considering China's economic moves the the debt package announcement comes just days after Trump's reelection and the president has threatened tariffs of up to 60% on Chinese Goods adding uncertainty and complicating China's economic challenges during his first term Trump launched a trade war with tariffs on $360 billion of Chinese Imports despite these challenges robust Chinese exports have been a rare bright spot this year however Trump's Victory May undo beijing's economic stabilization efforts analysts expect China to launch stimulus 11:04 measures in stages escalating and deescalate as the US trade stance becomes clearer they may not substantially boost stimulus until Trump's specific actions are known Beijing is launching a stimulus largely to repair confidence said Gerard Depo senior geoeconomics analyst for Bloomberg economics and if the US is basically declaring a second trade War it might undo those stabilization measures on the confidence side certainly with foreign investors and possibly with Chinese households so that would be a rather big problem for Beijing critics of China's debt package point out its limitations particularly its focus on supply side measures rather than boosting domestic demand this approach May exacerbate industrial overcapacity and trade tensions without a rebound in consumption producers cannot absorb inventory during export shocks which would hurt profits revenues 12:01 and dampen private investment or trying to boost domestic demand Rebecca I'm having a little bit of deja vu when you look at this Market reaction because about a month ago we had a similar one from the ndrc and I'm curious how much of that Dynamic has actually changed to your point they're falling short on that key word consumption I think that's the really big missing piece here and by the way there was never particularly a promise but actually there just had been a lot of speculation and a lot of expectation there had been some media reports for example that suggested that China was actually going to set aside a hefty chunk of change into buying unsold property for example now that hasn't transpired today perhaps you can kind of link that to some of the Commodities declines that we've seen in markets too and so again there was also this bet that uh if we saw a trump victory that Beijing would turn and sort of have its hand forced into trying introduce more support particularly focusing around restoring domestic 13:05 consumption as Yu principal China Economist at The Economist intelligence unit noted thing is that if the consumption domestic consumption cannot come back which means that whenever there's an export shock either because of tariff increase that means that the producers within China couldn't find uh like ways to absorb their inventory that would dampening their profit their revenue and again depening private invest some argue that direct household income support is needed to boost consumer spending and sentiment additionally debt swaps do not address the underlying local fiscal Revenue shortfalls meaning local governments will still need to borrow to fund basic operations as Victor shei a specialist in Chinese politics and finance at the University of California San Diego stated it's really not going to address the problem in a meaningful way there will be round after round of these small bailouts to make sure that things don't 14:02 get out of control but the underlying debt amount will still rise the stimulus package is also smaller than some expectations especially considering the Tariff risks posed by Trump at around 0.5% of GDP per year it is well below the 10% plus of GDP in the 2008 crisis stimulus Carlos kasanova Asia senior Economist at ubp estimates that China needs closer to 23 trillion un to reduce housing inventory and hidden debts the measures announced on Friday are going to disappoint the market because China needs more essentially he said furthermore the money is largely being used for infrastructure and property rather than direct household support while boosting investment helps employment and income growth gradually there is a lack of funds being distributed directly to families as seen in the US Co stimulus I don't think that we we will see direct fiscal stimulus aimed at consumption anytime soon ub's 15:04 Casanova said I think you will need a lot more pain for that to materialize he added China is probably going to hold back some of that Firepower until they have a better idea of what president Trump is planning according to Yu's research group the impact of the tariffs on Chinese Goods could be significant she said to your research group though how big of an impact do you expect the tariffs to have Chinese Goods after all I mean boosting exports has been one of the growth drivers for China this year yeah that's a good question according to our estimation if Trump Administration impos 30% tariff on Chinese product in general that would uh reduce China's GDP growth by 0.3 to 0.4 percentage Point within within the next two years I mean 25 and 26 however as we can see that if the Congress is being controlled by the Republican that means that it's potentially there's higher 16:05 risk that the Tariff could goes higher and could comes much earlier that means that there is significant downside risk to China's export next year in 2026 which means that I do expect the government will come up with a stronger fiscal policy uh especially focus on consumer goods spending when considering the various pillars of the stimulus measures yesu believes that managing Market expectations is a top priority for the government she explained I think the the S the most important thing in the government mind I think the top thing is actually to manage Market expectation again so you can see that throughout uh from the December end December to now there are several conference uh press conference uh hosted by the government officials and they keep sending the positive signal to the market so I think M manage Market expectation to domestic event s and foreign investor are the top priority of the government the second priority is to reduce systematic risk in the banking sector and uh and amount the 17:07 local government China's 10 trillion un debt refinancing package for local governments is a substantial move that caught the US offguard however many analysts believe it falls short of the fiscal Firepower needed to reinvigorate the sluggish economy particularly in terms of spurring consumer Demand with the risk of a renewed trade War under a second Trump Administration Beijing may be holding some stimulus measures in reserve imagine a high-speed Journey under the East China Sea China's gintong undersea tunnel is making it a reality this 16 km record-breaking tunnel will cut travel time between Ningbo and Joan to 26 minutes overcoming extreme underwater pressures and complex seabed challenges this ambitious project marks a new chapter in China's High-Speed Rail dominance the gintang undersea tunnel project located in Eastern China is set 18:03 to become the world's longest undersea high-speed railway tunnel spanning a total length of 16.18 KM and reaching a maximum depth of 78 M the tunnel is part of the 77 km Ningbo Joan Railway and is expected to be completed by the end of 2026 with the railway operational by 2028 the excavation process began with the tunnel Boring Machine ding High starting work 42 M below sea level advancing at an average rate of 16 m per day this colossal project holds immense significance as it will connect the cities of Ningbo and xan reducing travel time between the two from 1.5 hours to just 26 minutes the gintang undersea tunnel project is a colossal undertaking that will rewrite the history books spanning a total length of 16.18 km this tunnel is set to become the longest of its kind in the world the tunnel will link joean to China's extensive 19:06 high-speed rail network and accelerate the integration of Ningbo and xan into the yangi river economic belt imagine the transformative impact this will have on the lives of the people in these two cities as they are seamlessly connected to each other and to the larger high-speed rail network that spans the length and breadth of China but the benefits don't stop there the new tunnel will also also serve as a crucial link connecting the Joan Islands to China's extensive high-speed rail network Envision the journey between Joan and hjo which currently takes about 3.5 hours being reduced to a mere 77 minutes it's a game changer that will undoubtedly accelerate the integration of Ningbo and xan into the yangi river economic belt the yangi belt is China's largest economic zone sprawling across 11 provinces and municipalities it covers more than 21% of the country's 20:02 land area and accounts for nearly half of its population and total economic output the construction of the gintong undersea tunnel faces numerous technical challenges including navigating complex navigation channels and anchorages contending with the everchanging geological conditions beneath the seabed tunneling under immense water pressure and maintaining High Precision over the longdistance excavation overcoming these obstacles requires the utmost engineering expertise and innovative solutions it's a daunting task that would make even the most expert of construction Crews break out in a cold [Music] sweat 21:08 for but these challenges are merely obstacles to be overcome and the engineering team behind the gintang under sea tunnel is up to the task they've deployed a diverse array of construction methods from the tried andrue cuton cover technique to the amazing Shield tunneling machines to ensure that every inch of this project is executed with the highest standards of quality and safety under sea tunnel project director Jang gentau told State broadcaster CCTV that there were many technical challenges ahead after officially entering the C-section of the construction we will face several risks including Crossing navigation channels and anchorages Jang said we will also encounter challenges such as complex and variable geological conditions difficulties in tunneling under high water pressure and the need for high prision over a longdistance excavation 22:01 the dingi the Colossal tunnel Boring Machine spearheading the excavation is a proof of the Ingenuity of China's 22:08 Engineers this Behemoth measuring a staggering 135 m in length and weighing 22:14 a colossal 4,350 tons is the largest of its kind in 22:19 the world equipped with 308 custom-designed Cutters the dinghai is 22:25 assured to carve its way through the complex geological iCal conditions that lie beneath the East China Sea and the 22:32 dinghai is not alone in this Monumental task the Y Joe another equally 22:37 impressive tunnel boring machine is working from the Ningbo side of the tunnel ensuring that the project stays 22:43 on track for its anticipated completion by 2028 it's a synchronized work of 22:49 engineering prowess with each step carefully choreograph to overcome the daunting challenges that stand in their 22:56 way [Music] 23:03 [Applause] [Music] 23:24 as we Marvel at the sheer scale and complexity of the gintong undersea it's natural to draw comparisons to other 23:31 legendary Feats of engineering after all this isn't the first time humans have dared to venture beneath the surface of 23:37 the sea while the jintong undersea tunnel may not be the longest undersea tunnel in the world it is set to become 23:43 the third longest undersea railway tunnel the seon tunnel in Japan stretching 54 km with 23 km Beneath the 23:52 Sea and the channel tunnel between the UK and France spanning 50 km with 38 km 23:57 under the water currently hold the titles of the world's longest undersea tunnels however the jintong undersea 24:05 tunnels unique distinction is that it is specifically designed for High-Speed Rail allowing trains to travel at speeds 24:12 of up to 250 kmph through the depths of the East China Sea speaking of 24:18 High-Speed Rail let's take a moment to appreciate the sheer scale and dominance of China's Transportation network with 24:25 over 46,000 km of highspeed rail tracks in operation the country accounts for 24:31 More than 70% of the world's total high-speed rail network from the bustling metropolises of the East to the 24:37 remote regions of the West China's high-speed rail network has transformed the way its citizens move and connect 24:44 imagine traveling on a train in Beijing and arriving in guango in a matter of hours or traversing the vast expanse of 24:51 the country from harbon to Kunming in a fraction of the time it would have taken just a decade ago it's a revolution in 24:57 trans portation that has propelled China to the Forefront of the global stage and 25:03 the country's Ambitions don't stop there with plans to expand this network even further China is determined to redefine 25:10 the boundaries of what's possible in the world of High-Speed Rail the gintong undersea tunnel is just the latest 25:16 chapter in this ongoing saga but China's vision for the future of Transportation doesn't stop at its borders in an 25:24 interesting proposal the country has set its sights on an even more audacious project a $200 billion underwater train 25:31 Network that would connect mainland China to the United States traversing through Siberia Alaska and Canada along 25:38 the way imagine boarding a high-speed train in Beijing and reaching New York City all while traversing the depths of 25:44 the ocean it's a concept that sounds like something straight out of a science fiction novel but China is determined to 25:51 make it a reality with a proposed length of over 12,800 km this underwater rail net work 25:58 would dwarf even the most ambitious of engineering projects setting a new standard for Global connectivity the 26:05 plan was first announced in 2014 and received a lot of media attention 26:10 however some say the project has been put on hold the feasibility of this project may be the subject of much 26:17 debate but it proves China's unwavering ambition and its willingness to push the boundaries of what's possible after all 26:24 the gintang undersea tunnel was once just a bold idea and now it's well on its way to becoming a reality who's to 26:31 say that the underwater train Network won't one day follow in its footsteps as we've already established the gintang 26:38 under sea tunnel is no mere pipe dream the project is well underway with the 26:43 offshore excavation Works already in full swing and at the heart of this colossal undertaking is the ding High 26:50 the world's largest and most powerful tunnel Boring Machine successfully crossing the seaw wall means we have 26:57 overcome all the landbased risk points says Mr Yin Pang Chang chief engineer 27:03 for the jintang undersea tunnel project at China Railway 11th Bureau group the 27:08 next phase will fully shift to Marine construction which brings even greater 27:14 challenges the tunnel will take the Ningbo Joan line beneath a busy shipping Lane in the East China Sea that is used 27:21 by vessels up to 100,000 tons in size it has been described as the longest 27:27 high-speed r railway tunnel in the world when unveiled in January the 27:32 4,350 ton dinghai how was understood to be the world's widest and longest Marine 27:37 TBM says Mr Yin Pang Chang indeed the construction team behind the jintong 27:43 undersea tunnel is facing a veritable obstacle course from navigating the busy shipping lanes of the East China Sea to 27:50 contending with the presence of oil pipelines seaw walls and Docks but with 27:55 their unwavering determination and engineering prowess they are determined to overcome every challenge that stands 28:02 in their way the gintang undersea tunnel is just the latest in a long line of infrastructure Marvels that have 28:08 cemented China's position as a global leader in the field from the world's largest high-speed rail network to the 28:14 breathtaking Hong Kong jwai maau bridge the country has consistently pushed the 28:19 boundaries of what's possible when it comes to transportation and engineering and the country's Ambitions don't stop 28:25 there China has also made significant strides in the realm of hydrop Power with some of the largest and most 28:31 powerful dams in the world dotting the landscape it's a clear demonstration of the country's commitment to sustainable 28:38 energy solutions and its willingness to tackle even the most ambitious of engineering challenges deep in the 28:45 Japanese mountains lies a glimpse into the future of Transportation a 43 km 28:50 magnetic levitation train track that defies gravity this isn't Science Fiction it's Japan's ambitious maglev 28:57 project where trains hover 10 cm above their tracks and hurdle through space at 29:02 a mindbending 500 kmph the technology behind these floating trains sounds almost magical 29:09 but it's grounded in sophisticated engineering and Decades of research unlike conventional trains that rely on 29:15 Wheels and tracks these trains literally float on magnetic fields but before we begin how this 29:22 revolutionary system works let's look at where maglev technology stands today 29:27 does despite the futuristic promise of magnetic levitation technology its realworld implementation remains 29:34 surprisingly limited currently only one commercial high-speed maglev line 29:39 operates in Daily service the Shanghai maglev connecting pong International Airport to the outskirts of shanghai's 29:46 financial district this 30 km route while technologically impressive 29:51 actually highlights some of mlv's current limitations the journey takes just 8 minutes but here's the fascina 29:58 Paradox despite the Train's capability to reach speeds over 400 kmph its 30:04 average operating speed is only 225 kmph why because on such a short route 30:12 the train barely reaches its top speed before it needs to begin slowing down it's like having a Formula 1 car but 30:19 only being able to drive it on a short City Block to put this limited implementation into perspective let's 30:25 look at conventional High-Speed Rail net networks traditional high-speed trains currently operate on an astounding 30:32 60,000 km of track worldwide China alone has built over 30:38 40,000 kilometers of these lines in just two decades Japan's shinkansen Network 30:44 spans 3,000 km while Europe's various high-speed networks connect major cities 30:50 across the continent even more telling is the ongoing expansion an additional 50,000 km of conventional high-speed 30:57 race are currently under construction globally countries from Morocco to Indonesia are building new lines showing 31:04 the continued Faith In traditional wheelon rail technology what makes this disparity even more striking is that 31:12 maglev technology isn't new it's been around since the 1970s yet in nearly five decades only 31:19 Shanghai has managed to implement a high speed commercial line several other projects like the Birmingham Airport 31:25 maglev in the UK and the Berlin bon in Germany operated briefly but were eventually decommissioned due to 31:32 maintenance costs and reliability issues multiple countries have conducted feasibility studies for maglev lines 31:39 Germany's trans rpid project America's proposed Baltimore Washington route and various Chinese corridors but most have 31:46 opted for conventional High-Speed Rail instead the reasons range from cost 31:51 considerations to compatibility with existing infrastructure this context makes Japan's current maglev project 31:59 even more remarkable it's not just building a new train line it's betting on a technology that has struggled to 32:05 find widespread Commercial Success there are two main approaches to making trains levitate the first used in shanghai's 32:12 system is electromagnetic suspension essentially pulling the train upward using attractive magnetic forces this 32:19 method requires maintaining a precise gap of 8 to 12 millimet between the train and track it's like trying to hold 32:26 a magnet steady below another magnet the closer they get the stronger the attraction becomes making the system 32:33 inherently unstable and requiring constant computerized adjustments Japan 32:38 chose a different path their system creates a 10 cm gap eight times larger 32:44 than shanghai's and achieves stable levitation through magnetic repulsion at 32:49 the heart of Japan's lzo train lies a Marvel of modern engineering its revolutionary superconducting magnetic 32:56 system each train car is a equipped with eight powerful superconducting coils precisely arranged with four on each 33:03 side transforming the basic principles of magnetism into a practical Transportation solution these aren't ordinary magnets you'd find on your refrigerator the coils are made from niobium titanium a special alloy that becomes superconducting when cooled to extremely low temperatures superconductivity is a fascinating phenomenon where electrical resistance completely disappears allowing electric currents to flow indefinitely without losing energy but achieving this state requires maintaining temperatures close to absolute zero to accomplish this feat each coil is cooled using a sophisticated dual temperature system the niobium titanium coils are bathed in liquid helium at a bone chilling minus 269 de C 4 Kelvin while a surrounding jacket of liquid nitrogen atus 196° C provides an initial cooling barrier think of it as a Russian doll of cooling systems each layer protecting 34:04 and supporting the next the real engineering breakthrough comes in the form of the pulse tube refrigerator system this ingenious device maintains these ultra low temperatures without any moving Parts in the cold section making it more reliable and less prone to Mechanical failure the system works by creating pressure waves in helium gas similar to sound waves which create alternating hot and cold regions through careful timing and heat exchange it can maintain the superconducting state indefinitely but having such powerful magnetic fields on a passenger train creates its own set of challenges the magnetic fields generated by these superconducting coils are strong enough to wipe credit cards interfere with pacemakers and attract metallic objects clearly not ideal for a public transportation system this is is where the magnetic field management system 35:00 comes into play the engineers developed a sophisticated shielding solution using electric steel containing 3% silicon this isn't your ordinary steel it's specially processed to align its crystal structure in specific directions allowing it to channel magnetic fields like a router directs internet traffic the steel undergoes a complex Cold Rolling process that creates large aligned Crystal grains these grains can carry about 30% sent more magnetic flux in the desired Direction enabling Engineers to precisely control where the magnetic fields flow it's like creating invisible magnetic highways that direct the fields away from Passenger areas the results are impressive inside the passenger compartments the magnetic field strength is reduced to just 0.5 millitesla comparable to Earth's natural magnetic field for perspective that's less than 1% of the field strength you'd experience during an MRI scan the tracks themselves need special consideration 36:00 traditional steel rails would be attracted to the powerful magnets creating unwanted forces and interference instead the system uses a combination of low magnetic steel and fiber reinforced composits for the guideway structure these materials maintain their structural Integrity while remaining magnetically neutral the entire system requires incredible Precision in both manufacturing and assembly the superconducting coils must be wound perfect the shielding materials need to maintain their properties over Decades of use and everything must be aligned with millimeter Precision it's like building a Swiss watch but one that's several kilometers long and operates at temperatures colder than space each component must also be designed to handle the extreme forces involved when operating at 500 km hour

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