As the world's second largest economy, China looms large in the minds of U.S. economists and business sorts. I've also read plenty of worried blog posts and editorials focused on the thesis that the country might outstrip us on the clean-tech development front. Indeed, that may be a real threat, but in the short term, China looks like it might be a great market for U.S. clean-tech and green technology ideas.
I've seen no fewer than three notable developments over the past week supporting this hypothesis.
The most significant development (in terms of size at least) was the disclosure last week by General Electric that it had signed five different agreement with Chinese partners--those deals worth more than $2 billion in revenue for the giant U.S. technology manufacturer. GE is estimating that the joint ventures could create more than 4,500 U.S. jobs. Says GE Vice Chairman John Rice:
"These multi-sector infrastructure-improvement deals will help strengthen the critically important U.S.-China bilateral economic relationship, expand commerce and increase employment in both the U.S. and China. We feel confident about this relationship and are encouraged by the commitment both governments are demonstrating to working together to advance common interests."
The joint ventures include the following projects:
- Development of coal gasification technologies in China
- Work on distributed energy combined heat and power projects
- New avionics technology
- Assembly and manufacture of U.S.-built locomotives (China is investing billions in railroads)
- Collaboration on high-speed rail and electric rail projects in North America
Today, I've come across two other developments underscoring the importance of China.
The first, from San Jose, Calif.-based smart networked lighting technology player Echelon, outlines the company's success stories in Chinese cities including Changan City, Da Lingshan City, Qingdao city, Jinan city, Beijing and Shanghai. With something like 40 percent of city energy budgets going toward street lighting (that's an average worldwide figure), the Chinese market presents a particularly large opportunity for company's such as Echelon. In the press release describing the projects, an executive for Rongwen, one of the largest street lighting companies in China, says his company installed more than 16,000 lights equipped with the Echelon technology during 2010. He believes that Rongwen will have installed nearly 500,000 such lights by 2014, just three years from now. That executive, Li Zhiqiang, says: "Echelon's technology has enabled us to deliver a solution that reduces energy use by 55 percent and significantly lowers maintenance costs."
Echelon says it is working with 10 other companies like Rongwen on intelligent street lighting projects in China during 2011.
The second (and final) piece of evidence I've seen today surrounds a development deal and business relationship between China's Winston Global Energy and Balqon, a California company that develops zero-emissions heavy duty electric vehicles, electric drive systems and lithium battery energy storage products.
Winston Global is planning to buy 300 Balqon electric drive systems, which are priced around $53,000 each. The systems will be used in electric buses that will be marketed to private and government fleet operations in China. Balqon anticipates that the order will create about 150 new jobs in its Harbor City, Calif., headquarters location. "What today's announcement is really doing is validating our drive system on a larger scale," says Balwinder Samra, Balqon's CEO.
One of Balqon's core focuses has been on developing zero-emissions tractors for the Port of Los Angeles, which is actively working toward a zero-emissions power environment. During 2010, however, Samra says his company began sensing that there was a larger global potential for his technology -- provided Balqon could team up with technology companies that could localize its products for their unique market needs. The order follows Balqon's $5 million funding deal in December 2010 with Seven One Ltd., which is a Winston Energy affiliate.
Says Winston Chung, president and CEO of Winston Global Energy:
"Demonstration of Balqon's technology integrated into a 25-ton Class A motor home in China convinced us that Balqon's zero-emissions electric vehicle technology can be applied to other vehicle platforms such as passenger buses in China. We believe that by combining our lithium battery and fast-charging technology with Balqon's proprietary electric drive systems will enable us to provide cost-competitive zero-emissions solutions to a growing global demand for electric vehicles."
Political considerations aside, these deals underscore the need for supportive export policies that allow U.S. clean technologies to capitalize on the Chinese market.