When
Clint Wilder and I wrote our first book, The Clean Tech
Revolution, we knew we needed to travel to China if we wanted to
understand the future of clean tech. Mind you, our trip took
place more than five years ago, well before most people uttered
the words “China” and “clean tech” in the same breath. But it
was becoming increasingly clear, even then, why China was going
to be such a force to reckon with. Today, most businesspeople,
investors, politicians, entrepreneurs, and students understand
the Chinese clean-tech juggernaut, what it might mean to the
U.S., and why we need to prepare.
So why is China really scaring me right now? Earlier this year I
wrote in a
column on why I think America can compete with China in the
clean-tech race. And I still stand by those points. But a number
of recent developments are making China’s aggressive push, and
America’s relative clean-tech ambivalence, of increasing
concern:
- The China Development Bank (CDB) is being relentless in
its funding of clean-tech concerns. While American
politicians battle it out over Solyndra’s collapse and
potential loss to the government of $528 million, the
Chinese are pumping billions into their clean-tech concerns,
knowing full well that some of them will fail. The CDB put
more than $30 billion in credit into its burgeoning solar
companies in 2010, including Suntech Power, Trina, and
Yingli. It recently announced financial commitments to
ensure that its fledgling wind industry can join the ranks
of GE, Vestas, and Siemens, allocating at least $15 billion
in state-backed credit to China's biggest windmill makers
Sinovel Wind Group and Xinjiang Goldwind Science &
Technology. And China has plans to invest some $45 billion
in smart-grid companies and technologies alone over the next
five years.
These investments haven’t gone unnoticed in the U.S., and have been front and center in recent complaints that have claimed that China’s solar industry, for example, has an unfair trade advantage.
- One of the other things that make China and the U.S. so
different is that Chinese national and regional leadership
is now fully aligned behind clean tech as an economic
development and jobs growth strategy. They aren’t fighting
amongst themselves about whether they should support clean
energy, but are instead fighting to lead in the sector. To
put it simply, China believes in renewables. At the same
time, our inept Congress dukes it out over one bad
investment and seems increasingly polarized at every turn.
We have states like California, Oregon, Connecticut, New
York, and Colorado that are committed to clean tech, but
without federal support they are left to figure out the
puzzle mostly on their own.
- China is getting ready to outsmart us. “When you look at the political leaders in China they are mostly scientists and engineers, many from the power industry,” says Jefferies managing director Jesse Pichel. “But in the U.S. politicians are mostly lawyers.” And it’s not just business and policy talent that seems to be expanding, but student achievement. Chinese students in Shanghai recently scored tops in the OECD Program for International Student Assessment (PISA) evaluation tests for math, science, and reading. It’s important to note that PISA usually evaluates student performance for entire countries, so while Shanghai’s results are impressive they are not necessarily representative of all of China.
China’s clean-tech push, of course, will be riddled with
future obstacles, potholes, and challenges. For example,
approximately a third of China’s wind power had not been
connected to the grid by the end of 2010, highlighting issues
with grid connectivity keeping up with new capacity additions.
There have also been complaints of everything from exploding
wind turbines to pollution concerns at solar PV manufacturing
plants, demonstrating serious environmental and quality control
issues that could cause significant roadblocks in the nation’s
push for clean-tech dominance. And, ongoing issues surrounding
weak intellectual property protections in China continue to
threaten foreign investment and participation within the
country.
But do you think these business and infrastructure issues will
unravel China’s commitment to its clean-tech build out? I don’t
think so. Instead, China is redoubling its efforts in order to
own as much of the clean-tech sector as it possibly can.
The U.S., on the other hand, has some political leaders that are
ready to call it quits. The U.S. “can't
compete with China to make solar panels and wind turbines,”
U.S. Representative Cliff Stearns (R-Fla.) recently told
National Public Radio. Imagine if our earlier tech
revolutionaries in aerospace, computing, and the Internet had
policymakers with such weakened spines -- we’d be a mere shadow
of our current selves.
No doubt America faces its own unique challenges, but it’s not
time to give up. Instead, let’s tap our entrepreneurial spirit,
regain our clean-tech policy backbone, and get back in the
business of 21st century innovation and leadership.
The Chinese, I’m certain, will be doing nothing less.
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Ron Pernick is cofounder and managing director of clean-tech
research and advisory firm
Clean Edge, co-author of
The Clean Tech Revolution, and is currently working on
his second book with Clint Wilder, Clean Tech Nation.
© Clean Edge, Inc. http://www.cleanedge.com