China set to dominate clean energy

China is the world’s manufacturer, and increasingly that applies to energy infrastructure as well:

> China vaulted past competitors in Denmark, Germany, Spain and the United States last year to become the world’s largest maker of wind turbines, and is poised to expand even further this year.

> China has also leapfrogged the West in the last two years to emerge as the world’s largest manufacturer of solar panels. And the country is pushing equally hard to build nuclear reactors and the most efficient types of coal power plants.

Chinese manufacturers benefit from three big advantages. The first, of course, is cheap labor. The second is a booming domestic market. China’s demand for electricity is rising 15% per year, and unlike more developed countries, China doesn’t have a lot of legacy infrastructure complicating their investment decisions. Finally, the Chinese government has made energy infrastructure a priority (although this isn’t remotely the same as saying they’ve made climate change a priority).

Naturally, the rise of clean tech in China has triggered protectionist handwringing:

> These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.

On a very basic level, this analogy is insipid. Oil is a finite resource whose production is partially controlled by a handful of governments. Renewable energy — the sun, wind, tides, etc. — are not, broadly speaking, controlled by anyone. Access to different sources of renewable energy may be somewhat unevenly distributed, but far less so than access to fossil fuels.

Rather, China’s dominance comes in the area of manufacturing the products that allow us to harness renewable energy. This is the type of dominance that is subject to competitive pressure, that can be lost, or that inevitably becomes less important over time as industries age and their growth slows.

Moreover, it’s the type of dominance that benefits China’s trading partners. One of the chief obstacles to the widespread adoption of clean energy is cost. Given the seeming inability of the United States government to put appropriate market incentives in place, we ought to strongly cheer any sign that the market is making progress on its own.

None of this is to suggest that the U.S. is smart to simply cede massive new markets to rising powers. Rather, the problem isn’t so much China’s rise as the U.S.’s ongoing complacency.

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  1. Peter Davis - February 3, 2010

    Napolean Bonaparte said “Behold China– she is a sleeping giant! But let her sleep because when she awakens she will destroy the world.” He was right as we have learned. When Nixon restored relations with China we failed to heed Napolean’s warning. Now they have all our money and can buy our companies (and control our elections through their U.S. subsidiaries, thanks to our Supreme Court), and we have lost our manufacturing economy and have replaced it with a service economy. Our only industry is health care. China’s manufacture of solar and wind power equipmentd will require more carbon than it will save through clean energy.
    [Ed. — Sigh.]

  2. Sp - February 3, 2010

    America is not a passive victim in its current fortunes. Even though developed nations can criticize the developing world for following the same path, it stinks of protectionism. China and others should be watched closely and educated on what we know (about Green issues, for e.g.,) but they have worked hard to “have all our money…buy our companies.”
    Pointing the finger at China’s contribution to making “Green” work is a bit rich. American car companies covertly killed any life ecofriendly cars had, only to be overtaken by the Japanese. As I said, America is not a passive victim. Stop feeling sorry for yourself. May be we need to learn Chinese.

  3. Michael - February 3, 2010

    China needs to be a leader in the new “green” since they are currently the worst polluters in the world, by far.
    They could take the lead for the next 20 years and still pollute more than we ever did.
    [Ed. — sigh, again]

  4. Michael - February 3, 2010

    Ed. – quit sighing, you are creating more greenhouse gas. China is way behind in cleaning up their act and you know it, if you are willing to be intellectually honest and not lazy.
    [Ed. — groan]

  5. Michael - February 3, 2010

    Wow, you make an amazing, well thought out argument.
    [Ed. — likewise!]

  6. Heather - February 3, 2010

    Agreed. Cities in China were installing solar panels on rural public housing 8 years ago. Was the US doing the same? Is the US doing this now? Will the US do this tomorrow????
    Rather than complain/do nothing/be intimidated by China’s investments in infrastructure development, perhaps defining ways to facilitate policy adoption and compete locally and might be a better use of our time.
    Take responsibility America. Take charge. Stop your petty complaining about proactive approaches and be proactive yourselves.
    Thanks China for making my first wind turbine. I hope that my second is made in the USA.

  7. michael - February 3, 2010

    This is an absurd paragraph…we depend on oil becuase it is a natural resource not found in quantity where we live…and because we chose to. We can produce solar panels and wind turbines and other gear just like the chinese.
    “These efforts to dominate renewable energy technologies raise the prospect that the West may someday trade its dependence on oil from the Mideast for a reliance on solar panels, wind turbines and other gear manufactured in China.”

  8. Jonathan - February 3, 2010

    The editor could not have said his bit any better. The American attitudes (of many at least) of protectionism, ignorance and what could be portrayed as genetic arrogance continue to frustrate many around the world. USA is the world’s capitalist leader and to deny the basic economic tenet of comparative advantage is absurd.
    In addition, American industry has been creating significant negative externalities for its people, the environment and the world at large for nigh on 2 centuries. Your baseless
    comment re greenhouse gas emissions is retarded at best. China has been polluting horribly for 20 years; USA for 200. At least the Chinese are recognising the need for improvement in industry practice now, and we don’t have to wait another 180 years as the USA would seemingly do.
    The USA needs to find what it’s good at (without ongoing governmet subsidies), stick with it and stop blaming everyone else.
    NB This is directed at those with an external locus of control, not the majority of you.

  9. Jean - February 3, 2010

    But, are they invading the last few areas that are pristine to do this? You know they don’t have an EPA over there and if they did it would be run the way Bush would run it.

  10. M Raj - February 4, 2010

    Americans are great innovators. Then why laugh at Asians electric scooters and 2500$ cars which don’t cross 40miles an hour yet?
    Till there is more potent technology around – at least we will keep all our deadlines within our limited resources.

  11. Matt Polaine - February 5, 2010

    I feel this thread is missing the point.
    The West has been fiddling while Rome burns; China has just got on with what it needs to do. China’s culture has adaptation at its core. Yes it has made some mistakes with freedom of speech, flattening villages, and lack of equivilent EPA, but the West isn’t so innocent either.
    Aside from population growth and Peak Oil, I would argue that the greatest problem facing the West is the increasing gap between the poor and middle classes and the rich, or should I say super-rich.
    Trillions of dollars have been pumped into the global economy by taxpayers and printed, so where is it now?
    As long as the financial sectors feel it is OK to pay obscene bonuses while RE flounders with lack of REAL investment, this greed will be the death of the West.
    China knows this, but ‘we’ in the West are just to stupid/greedy/complacent over the slow threats.
    We are all boiling frogs.

  12. michael - February 5, 2010

    Unfortunately – right or wrong – the money wall street makes eventually makes its way into the middle class. My heart agrees with you, however.
    Regards to some of our infrastructure…like remodeling an old house, updating the existing grid – as one example – may prove to be much more costly than building an entirely new one along side it…

  13. Matt Polaine - February 5, 2010

    Michael –
    Regarding your last paragraph; it is, I am.
    Yet for those above the poverty line the UK grants so-called ‘available’ for domestic low carbon tech retrofitting have such tight criteria, only a tiny minority can obtain them.
    The UK government spins up much about incentives, but the reality is rather pathetic. The UK microgen Feed-in Tariffs, another example, are set just low enough to be useless, but just high enough for greenwash.

  14. michael - February 5, 2010

    Not sure I understand…sorry, sometimes I am a wee bit dense.
    And to clarify, there are two michaels’ here…I am lower case michael…upper case Michael is someone else.