This is China! blog

It was September, and an angry mob of 500 villagers were breaking through the chain-link fence of a solar cell factory belonging to Jinko Solar Holding Company, intent on ransacking the premises. A torrential rainfall had flooded the company’s mismanaged vats of toxic waste and carried the contaminated water into a nearby stream in Haining, Zhejiang province. On the day after the deluge, residents in the area reported seeing dead fish floating in the surrounding waters for hundreds of square yards.

The problem was a result of both government ineptitude and corporate inaction. Though the local Environmental Protection Bureau (EPB) punished the facility five months before the incident for improperly storing and managing the waste, the factory had continued to operate as usual. Jinko Solar was supposed to have paid a fine of RMB470,000 (US$73,600) and shut down the plant until its waste management system was robust.

But by the time the autumn rains had swept through, the facility had yet to act on any of the injunctions the EPB had set against it. The result was a rampage by angry local citizens that caused thousands of dollars in damage and demoted the “green credentials” of the New York Stock Exchange-listed company.

This is the irony of green- and clean-technology manufacturing in China: Without the proper technology, safety controls and management procedures in place, the manufacturing processes can be terribly polluting. In China’s rush to gain market share and satisfy its voracious appetite for energy, officials and companies have pulled out many safety stops and unhinged production goals from economic fundamentals.

Read the rest of my January 2012 China cleantech column here …

Angela Merkel, Prime Minister of Germany, isn’t even imagining a day when a German nuclear plant might meltdown in her backyard. And given that Germany doesn’t have a very big back yard, it’s probably well and good. Chinese suppliers – especially of solar power photovoltaic (PV) modules – must be dancing in their factory compounds. Overcapacity of production of PV cells and modules in China has driven profits for the hundreds of PV manufacturers that piled into the marketplace the last three years. Germany’s recision last year of feed-in tariffs that made it affordable for German investors to buy Chinese solar power products had hit Chinese suppliers hard. Now, the game is on.

Prepare to see even more Chinese PV manufacturers crowd into the game.

Further reading: BBC

image credit: morrisonworldnews.com

Technorati Tags: renewable energy

Martin Wolf writes an insightful analysis in the Financial Times of the rebalancing of the world economy back toward the heft of Asia, at the center of which are the populations of India and China. His point is that the divergence in wealth creation between East and West in favor of the West from the 1800s on was actually the historic aberration; Asia had been the world’s economic fulcrum for more than a thousand years.

He places the divergence in the late 18th and 19th centuries, following the thesis set out by Kenneth Pomeranz of the University of California, Irvine in his book The Great Divergence (which I have not read but now want to). Angus Madison, a statistical historian, Wolf cites, pinpoints economic divergence in 1820.

I place divergence much earlier than the two of them, around 1700, with the increased interest in burning coal to run steam engines and turbines. It’s no coincidence at the time that Britain mined nearly 80% of the world’s coal at the time, and that the seat of the Industrial Revolution was that little island with the terrible weather. Nevertheless, James Watt’s massive improvements on the use of coal in combustion chambers paved the way for Britain – and then the other European countries and eventually America – to mine the energy they would need to “artificially” push the world into economic divergence.

China, meanwhile, had closed it’s doors to the outside world two hundred years before with the destruction of Zheng He’s fleet of massive ships that plied the seas as far away as India and Africa in the early 1400s. Unable and unwilling to keep abreast of the innovations occuring in the West, China set about deforesting southern China and northern Vietnam to maintain a burgeoning population and increasingly complex society. Without the energy needed to keep the country together, the Manchus were able to sweep in from the north, and essentially fight a losing battle over the next three hundred years to consolidate the country. No energy, no money, no society – a lesson today’s Chinese leaders know very well.

Perhaps if the Manchus had opened up the empire to the energy-related innovations of the West in the 1700s – just as the CCP has the last ten years -  the society would have trumped all comers and seen off a divergence that became a near-death experience for a nation.

What do you think?

In this week’s China Economic Review online I write in my column about a revelation that’s come straight from the horse’s mouth about China’s wind power industry.

“It’s going to be a disaster. Everybody knows about it, everybody’s bracing for it,” the Chinese senior manager said. “The offshore wind industry will have terrible accidents because of quality issues and the speed of construction.” It was an unexpected confidence delivered with force and certainty. My colleagues and I sat slack-jawed at the round banquet table, shifting uncomfortably in our seats. We were in North Jiangsu Province, a couple hours’ drive from Shanghai. A Chinese wind power components manufacturer had invited us to his plant to learn more about their work and see their progress in the field. The manager spoke on condition of anonymity. “They’re just building the wind turbines too fast; there will be some big accidents,” he concluded. It seemed almost blasphemous for a Chinese manager to express massive failure ahead for an entire industry. Still, he just may have had a point…

Read more of the article here.

image credit: co2realist.com

Image credit: Hubpages

by Bill Dodson

I was recently interviewed on America’s National Public Radio from the broadcaster’s Shanghai office about the basis of the The United Steel Workers’ (USW) complaint against the Chinese government. The United Steel Workers Union is an 850,000-member strong labor organization in the United States that believes China is unfairly subsidizing its cleantech export industries. Energy-related American jobs the union believes China is sapping including manufacturers who make the steel for wind turbine towers and nuclear reactors and glassworkers who make solar panels and various kinds of incandescent and halogen light bulbs, which are manufactured in China then exported to the United States, according to the New York Times.The union wants the United States government to take the complaint to the World Trade Organization (WTO), to end what it sees is an unfair practice.

You can listen to the podcast interview here, and read the transcript of the interview here.

Further reading: NYT

Image credit: mywindpowersystem.com

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