Roy L Hales :
There is no modern parallel for the pace of Chinese development. Economically speaking, China was a Third World nation only decades ago – now it has surpassed the US, and enters 2015 as the world’s leading economy. (It will take at least another generation for this to be possible on a per capita level.) China’s development has two faces: black and green. The world’s largest GHG polluter has also built up the planet’s renewable energy system, which was producing 378 GW by the end of 2013. Wind, water and solar accounted for around 30% of installed capacity, and close to 20% of generated electricity in 2013. (A little more than 10% of China’s power comes from renewable sources.) The shift towards renewables was most clearly seen in new generation, 58% of which was “green.” As of September 2014, the Renewable Energy Country Attractiveness Index (RECAI) selected it as the #1 choice for renewable investors.
China has been the world’s leading producer of wind energy since 2012. Though the final figures for last year have not yet been released, Vice President Ma Jinru , of Xinjiang Goldwind Science & Technology Co., recently told Bloomberg that it added another 20 GW or so of wind capacity in 2014. If that is true, China has about 110 GW capacity, and is well on its way to reach the goal of 200 GW by 2020.
China is easily the world’s largest hydroelectric producer. It had 281.5 GW of capacity by the end of 2013. Though this year’s figures have yet to be released, they will easily exceed the target for 2015. The next goal is 429 GW by 2020.
The Three Gorges Dam (above) has been called a modern equivalent to the Great Wall, in both scale and cost. Around 1.5 million citizens are believed to have been displaced by the 22,000 MW project, but it also held back a catastrophic flood in 2010.
China has led the world in terms of new solar installations for two years. It is expected to reach 33 GW of capacity by the end of 2014. This is not enough to catch up to Germany, which is still leads the world in terms of installed capacity, but the gap is narrowing.
Peter Varadi traces the origins of China’s solar miracle in his book Sun Above the Horizon, Meteoric Rise of the Solar Industry. Though the industry can be traced back to 1988, production did not exceed 10 MW per year until the Suntech Corporation was started fourteen years later. It was the first of eleven “Chinese” companies trading on the US stock market. At the time of Varadi’s writing, 90% of Trina Solar’s shareholders are Americans. Other recognized names like Yingli, Jinka and Canadian Solar have smaller proportions.
The deluge of inexpensive Chinese solar modules burst upon the world market in 2011. According to an unnamed government energy official cited in Young China’s Business Blog, Chinese solar panel makers were able to do this because of a 0.9 yuan per kilowatt-hour “subsidy” they receive from the government. Both the EU and America have responded with protectionist measures.
Can China Play By The Rules?
This is not the only sector in which the world’s new #1 economy has been having dispute. China has been accused of dumping, unfair government subsidies, and theft of intellectual property. Some ask, “Can China play by the rules?”
It has been more than a decade since Chinese periodicals like The People’s Daily heralded their acceptance into the World Trade Organization as a “historic moment in China’s reform and opening-up and the process of modernization.”
Trade was one of the many issues President Obama raised during his visit to China last November. He told the APEC CEO Summit, I did emphasize the need for a level playing field, so foreign companies can compete fairly, including against Chinese state-owned enterprises. I stressed the importance of protecting intellectual property as well as trade secrets, especially against cyber-threats. And we welcome continued progress towards a market-driven exchange rate.
(To be continued)
