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With protectionism in its many guises- like back in the day of the All-American production economy.
July 14, 2009
China Builds High Wall to Guard Energy Industry
By KEITH BRADSHER
BEIJING — When the United States’ top energy and commerce officials arrive in China on Tuesday, they will land in the middle of a building storm over China’s protectionist tactics to become the world’s leader in renewable energy.
Calling renewable energy a strategic industry, China is trying hard to make sure that its companies dominate globally. Just as Japan and South Korea made it hard for Detroit automakers to compete in those countries — giving their own automakers time to amass economies of scale in sheltered domestic markets — China is shielding its clean energy sector while it grows to a point where it can take on the world.
Steven Chu, the American energy secretary, and Gary Locke, the commerce secretary, are coming here to discuss clean energy and global warming with Chinese leaders, and to see if progress can be made toward getting China to agree to specific targets for reductions in greenhouse gases. Agreement proved elusive during the Group of 8 summit meeting last week in Italy.
But Mr. Chu and Mr. Locke arrive as Western companies, especially Europeans, are complaining increasingly about Beijing’s green protectionism.
China has built the world’s largest solar panel manufacturing industry by exporting over 95 percent of its output to the United States and Europe. But when China authorized its first solar power plant this spring, it required that at least 80 percent of the equipment be made in China.
When the Chinese government took bids this spring for 25 large contracts to supply wind turbines, every contract was won by one of seven domestic companies. All six multinationals that submitted bids were disqualified on various technical grounds, like not providing sufficiently detailed data.
This spring, the Chinese government banned virtually any installation of wind turbines with a capacity of less than 1,000 kilowatts — excluding 850-kilowatt designs, a popular size for European manufacturers.
Lu Hong, the program officer for renewable energy in the Beijing office of the Energy Foundation, a nonprofit group seeking to support sustainable energy, said that China was willing to invest heavily in renewable energy industries, even though wind and solar energy costs are higher than for coal, precisely because it helps the Chinese economy.
“The Chinese government won’t consider such a big solar industry without considering the building up of the domestic industry,” she said, adding that China’s policies will also help address global warming.
Zhou Heliang, the president of the China Electrotechnical Society, a government entity that plays a broad role in national and provincial technology policy, predicted at the Wind Power Asia conference here on Friday that Chinese-owned companies would increase their share of the Chinese market by an additional 10 or 20 percentage points this year.
That would give them almost three-quarters of the domestic market, compared with a quarter for European and American companies — the reverse of the ratio four years ago.
This year, China passed the United States as the world’s largest market for wind energy. It is now building six wind farms with a capacity of 10,000 to 20,000 megawatts apiece, using extensive low-interest loans from state-owned banks.
By comparison, T. Boone Pickens delayed his plans to build a 4,000-megawatt wind farm in Texas, once promoted as the world’s largest.
Some foreign companies, particularly European businesses, are starting to express misgivings about China’s promotion of the local manufacturers.
European wind turbine makers have stopped even bidding for some Chinese contracts after concluding that their bids would not be seriously considered, said Jörg Wuttke, the president of the European Union Chamber of Commerce in China.
European turbine manufacturers are especially disappointed because they built factories in China in order to comply with the country’s requirement that turbines contain 70 percent local content, Mr. Wuttke said. Yet all the multinational manufacturers were disqualified on technical grounds within three days of bidding for wind farm contracts this spring, even as Chinese companies that had never built a turbine were approved, he said.
European solar power companies are also unhappy. “This is not a level playing field,” said Boris Klebensberger, the chief operating officer of SolarWorld AG, which is based in Bonn.
http://www.nytimes.com/2009/07/14/bu...l?ref=business
European mercantile history with China...level playing field...does not compute, Commander Kirk :confused:
July 14, 2009
Calling renewable energy a strategic industry, China is trying hard to make sure that its companies dominate globally. Just as Japan and South Korea made it hard for Detroit automakers to compete in those countries — giving their own automakers time to amass economies of scale in sheltered domestic markets — China is shielding its clean energy sector while it grows to a point where it can take on the world.
Steven Chu, the American energy secretary, and Gary Locke, the commerce secretary, are coming here to discuss clean energy and global warming with Chinese leaders, and to see if progress can be made toward getting China to agree to specific targets for reductions in greenhouse gases. Agreement proved elusive during the Group of 8 summit meeting last week in Italy.
But Mr. Chu and Mr. Locke arrive as Western companies, especially Europeans, are complaining increasingly about Beijing’s green protectionism.
China has built the world’s largest solar panel manufacturing industry by exporting over 95 percent of its output to the United States and Europe. But when China authorized its first solar power plant this spring, it required that at least 80 percent of the equipment be made in China.
When the Chinese government took bids this spring for 25 large contracts to supply wind turbines, every contract was won by one of seven domestic companies. All six multinationals that submitted bids were disqualified on various technical grounds, like not providing sufficiently detailed data.
This spring, the Chinese government banned virtually any installation of wind turbines with a capacity of less than 1,000 kilowatts — excluding 850-kilowatt designs, a popular size for European manufacturers.
Lu Hong, the program officer for renewable energy in the Beijing office of the Energy Foundation, a nonprofit group seeking to support sustainable energy, said that China was willing to invest heavily in renewable energy industries, even though wind and solar energy costs are higher than for coal, precisely because it helps the Chinese economy.
“The Chinese government won’t consider such a big solar industry without considering the building up of the domestic industry,” she said, adding that China’s policies will also help address global warming.
Zhou Heliang, the president of the China Electrotechnical Society, a government entity that plays a broad role in national and provincial technology policy, predicted at the Wind Power Asia conference here on Friday that Chinese-owned companies would increase their share of the Chinese market by an additional 10 or 20 percentage points this year.
That would give them almost three-quarters of the domestic market, compared with a quarter for European and American companies — the reverse of the ratio four years ago.
This year, China passed the United States as the world’s largest market for wind energy. It is now building six wind farms with a capacity of 10,000 to 20,000 megawatts apiece, using extensive low-interest loans from state-owned banks.
By comparison, T. Boone Pickens delayed his plans to build a 4,000-megawatt wind farm in Texas, once promoted as the world’s largest.
Some foreign companies, particularly European businesses, are starting to express misgivings about China’s promotion of the local manufacturers.
European wind turbine makers have stopped even bidding for some Chinese contracts after concluding that their bids would not be seriously considered, said Jörg Wuttke, the president of the European Union Chamber of Commerce in China.
European turbine manufacturers are especially disappointed because they built factories in China in order to comply with the country’s requirement that turbines contain 70 percent local content, Mr. Wuttke said. Yet all the multinational manufacturers were disqualified on technical grounds within three days of bidding for wind farm contracts this spring, even as Chinese companies that had never built a turbine were approved, he said.
European solar power companies are also unhappy. “This is not a level playing field,” said Boris Klebensberger, the chief operating officer of SolarWorld AG, which is based in Bonn.
http://www.nytimes.com/2009/07/14/bu...l?ref=business
European mercantile history with China...level playing field...does not compute, Commander Kirk :confused: