The Recent Major Advance Towards Renewable Energy In China

Chinese leaders can finally breathe, now that the Olympics have gone by with relatively little trouble and more blue skies than many observers anticipated. Yet there is plenty of work to be done, and tons of money to be made in Chinese renewable energy.

This week, U.S. trade officials estimated the value of China’s clean technology market at $186 billion by 2010, soaring up to over half a trillion dollars by 2020.

Why such whopping estimates?

Well, after the athletes headed home, on August 29 the Communist Party leadership in Beijing passed what’s known as the Circular Economy Law, which will stimulate national cleantech spending through efficiency and emissions regulations.

The essence of the Circular Economy Law is very simple and familiar to green enthusiasts around the globe: Reduce, Reuse, Recycle.

But energy progress isn’t just something you can legislate. As we’ve learned the hard way here in the U.S., the greening of our economy requires cultural change and economic oomph behind it.

The Circular Economy Law (C.E.L.) had been in the works for over a year, and after it takes effect on Jan. 1, 2009, the C.E.L. should set the country on a more sustainable path towards national wealth and power.

China can’t do that alone. So China and the U.S. inked a decade-long energy and environment cooperation agreement back in June, including American firms in the circular, sustainable economy that is developing.

U.S.-China CleanTech Trade

Now, Deputy Commerce Secretary David Bohigian is leading a mission of 19 clean energy and environmental protection companies through Beijing and the provinces of Guangdong (Canton) and Shandong.

The companies range from small, unlisted start-ups to giants like G.E., and they’re getting an on-the-ground look at how they can make money in the Middle Kingdom in the next ten years.

The main points of this summer’s bilateral framework for cooperation are:

• Transportation (China is home to the world’s fastest trains and fastest-growing car market)

• Clean energy technology (China has the potential to leapfrog developed countries by building brand-new grids optimized for renewables)

• Water (China has 17 of the 20 most polluted streams in the world)

• Air (China’s official “blue sky” rating system falls far short of E.P.A. standards)

• Forests/Wetlands (Deforestation is estimated to contribute 20% of the carbon man has added to the atmosphere, speeding global warming)

In all of these areas, General Electric (GE), 3M (MMM), Honeywell (HON), and other companies with worldwide wherewithal can help China reach its goals while boosting their own shareholder value.

We’ll keep you up to date with the best bets on U.S. companies doing business in China’s booming market for cleantech and efficiency improvements.

Posted in Categories: Contributor, Energy, External Research, Stocks, USA.

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