This is China! blog

The Shanghai Business Review recently reported the European Union Chamber of Commerce has raised further complaints about discrimination against Western companies in the Chinese marketplace. Much of the consolidation occurring in China industry, though, is premature, much like the American teenager who believes at age 15 he’s entitled to drive the family SUV because he’s all grown up. Many of the sectors that rely on extensive R&D and innovative approaches to technology application are wholly immature in China, however. In the September 2010 issue Eurobiz Magazine I write in my China Energy column that:

The overwhelming majority of Chinese engineers and the companies that employ them are quite literally without application knowledge of the technologies required to meet the conditions into which the wind turbines are thrust, especially in the rough conditions of offshore installations. More than a few European General Managers and CEOs have told me Chinese buyers for their components and chemical processes expect the vendors to educate the Chinese on the specifications their parts require. As the CEO of one Danish components maker expressed to me, “We ask them [Chinese buyers] for specifications and they ask us what the specifications should be, since we are ‘the experts’.” The lack of knowledge and experience of domestic wind power components makers of many of the domestic turbine and components makers is a constant theme in discussions with Western vendors. Vendors have found they have to provide additional training and longer sales cycles to potential and current customers in order to make and keep sales in China.

Check out more of the Eurobiz article here.

Over at TrendsAsia my colleagues and I have been producing podcast interviews of General Managers, Senior Managers and CEO’s in China’s renewable and clean energy sector and posting the recordings on the ChinaEnergySector.com blog. We’ve taken the recording thing a bit further and started recording ourselves, too. A bit narcissistic, one might think; but we’ve been working out more channels to get our information, news, commentary and analysis across to interested Western audiences with little direct access to what’s going on here on the ground in China.

So, we’ve expanded into audio recordings of the blog posts we write, organized into files made on a weekly basis (“read in the author’s own voice,” as they say on the backs of audio book packaging). The idea is to make it easier for those on-the-go types to keep up with our blogs without having to remain glued to their computer screens. And Roundtable Discussions, in which the principals of TrendsAsia discuss the latest news topics of interest to us in China’s energy sector. Look for our video interviews in the near future.

You’ll find the Podcasts here on the ChinaEnergySector.com blog; the Blogcasts here; and the Roundtable Discussions under the Newscasts menu item, here.

Enjoy.

I’m in Beijing this week attending the Clean Energy Expo China, one of the highest profile shows for foreign and domestic companies that want to throw a spotlight on what they’re up to in the clean and renewable energies sector in China. Just having come off the Offshore Wind Power China Trade Show in Shanghai, the Beijing Show will be another opportunity for one of my colleagues and I at TrendsAsia to catch up with old friends and make new contacts in the industry. While in Beijing we’ll also be interviewing movers and shakers in the industry – Chinese and foreign – same as we did at the Shanghai  show a couple weeks ago.

You can hear my interview with AVN Energy CEO Tom Weiling in this podcast. AVN Energy specializes in components for pitch hydraulics, hydraulic braking and cooling solutions, rotor locks, and hatch opening systems. Tom spoke with me about educating the Chinese buyer, many of whom have a long and steep learning curve ahead of them as the industry matures.

You can hear other podcast interviews on the downloads page of the TrendsAsia blog, ChinaEnergySector.com.

Enjoy!

It doesn’t take long when you live and work in China to realize that altruism seldom fits into Chinese business calculations. As far as the renewable energies manufacturing sector is concerned, the Chinese government and entrepreneurs see the potential for riches to be made from the manufacture of equipment that captures, transforms and distributes energy from sources other than coal and oil. One source with whom I talked at the recent SNEC Photovoltaic Conference and Exhibition in Shanghai said her company had commissioned a market study in 2008 on the largest manufacturers in China of photovoltaic cells, as used in solar panels. The study turned up 130 companies that matched their criteria. A year later 50 of those companies had simply disappeared. “It was clear many of the [Chinese] investors saw an opportunity, had some money from other businesses, and thought they’d try their luck.”

It’s important then, in this media-appointed “race” between China and the US in the renewable energy sector to look more precisely at the numbers being quoted, the sources and the time frames from which the numbers are being taken. Bruce Usher, an executive in residence at Columbia Business School, recently wrote in a New York Times Op-Ed piece that, “Bruce Usher, an executive in residence at Columbia Business School, in a 2004 analysis, the World Bank determined that China accounted for a mere 5 percent of clean-development projects globally. But by 2008, the most recent year for which annual data is available, the bank reported that China’s market share had climbed to an astounding 84 percent.” But the same can be said of so many other industries in which America once held predominance and manufacture shifted off-shore: sneakers, TV sets, video recorders, and the like.

Issues of quality are even more difficult to articulate. One maker of equipment that automates the transfer of silicon sliced into wafers told us one of the reasons for Chinese interest in his equipment is that the majority of Chinese production is done on manual lines that yield 16.3% efficiencies in the solar cells. Some American buyers require 16.7% efficiencies from makers, creating a hidden barrier to unfettered Chinese domination of the American market. Though non-renewable energy may not be a national policy on the order of China’s, I do believe American companies continue to refine energy technologies and invest in R&D that will turn up ever more efficient means of producing clean, renewable energy.

So, let China continue to churn out the solar equivalent of “cheap sneakers” for the world. By the time international buyers have to replace less efficient Chinese copy-cat technologies, more efficient products and perhaps even completely new approaches to powering the world will be available.

Further reading: NYT