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China seeks power sector control

world Updated: Sep 09, 2010 23:58 IST
Keith Bradsher

Until very recently, Hunan Province was known mainly for lip-searing spicy food, smoggy cities and destitute pig farmers. Mao was born in a village on the outskirts of Changsha, the provincial capital here in south-central China.

Now, Changsha and two adjacent cities are emerging as a center of clean energy manufacturing. They are churning out solar panels for the American and European markets, developing new equipment to manufacture the panels and branching into turbines that generate electricity from wind.

By contrast, clean energy companies in the US and Europe are struggling. Some have started cutting jobs and moving operations to China in ventures with local partners.

The booming Chinese clean energy sector, now more than a million jobs strong, is quickly coming to dominate the production of technologies essential to slowing global warming and other forms of air pollution. Such technologies are needed to assure adequate energy as the world’s population grows by nearly a third, to nine billion people by the middle of the century, while oil and coal reserves dwindle.

But much of China's clean energy success lies in aggressive government policies that help this crucial export industry in ways most other governments do not, at times, violating World Trade Organization rules to get to its end.

Chinese wind and solar power manufacturers further benefit from the government's imposition of sharp reductions this summer in exports of raw materials, that are crucial for solar panels and wind turbines. China is also on track to make nearly half of the world's wind turbines this year.

Its success in clean energy also stems from assets enjoyed by many of the nation's industries: low labor costs, expanding universities that groom lots of engineering talent, inexpensive construction and ever-improving transportation and telecommunications networks.

China's aggressive tactics are making clean energy more affordable.

Solar panel prices have dropped by nearly half in the last two years, and wind turbine prices have fallen by a quarter — mainly because of China's rapid expansion in these sectors.