The U.S. Department of Commerce is leading a Clean Energy Trade Mission to China and India, on January 8-17, 2008, to promote a broad range of clean energy technologies such as renewable energy, biofuels, energy efficiency, clean coal, and distributed generation. The Mission is taking place in the context of the Asia-Pacific Partnership on Clean Development and Climate, and reflects growing dialogue between the United States and China on urgent environmental issues.

Media reports from China on the Mission (also known as the Sino-U.S. Clean Energy Dialogue) focused on the significant opportunities for U.S. and Chinese businesses that could be gained through collaboration, as well as the political and policy barriers that expanded trade in clean energy technologies may face.

Business Opportunities

The Chinese media emphasized the enormous opportunities on clean energy cooperation for both China and the United States, and quoted Chinese government experts and business community leaders who indicated that the Mission underscores the Chinese government’s sincere commitment to strengthening cooperation with the United States on clean energy.Mr. Xu Dianming, Vice Director of the National Energy Office of the State Council, said that the Chinese government will continue to take robust measures to save energy and reduce emissions in 2008 and encourage the development of clean energy and renewable energy. There will be more and more business opportunities in the area of clean energy.

Similarly, Ms. Yao Wenping, the Vice President of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (”CCCME”), estimated that the value of clean energy technology procurement and cooperation between Chinese and U.S. firms could exceed $10 billion during 2008. She said China is ready to introduce more clean energy technologies and products from the United States. Indeed, the organizers of the upcoming China Import and Export Fair, to be held in April 2008, are planning to open a special area for exhibiting new clean energy technologies and equipment from the United States.

Political and Policy Barriers

Officials from two countries aren’t entirely satisfied with the current situation, and have expressed concerns about persistent trade barriers to clean energy products and technologies. The Chinese media have also commented that the United States has been insufficiently honest and cooperative and addressing these trade impediments.

For example, Mr. Wang Chao, Assistant Minister of China’s Ministry of Commerce, said that the U.S. government’s strict controls on high technology exports to China have limited the export of advanced technology and equipment to China, which in turn has worsened the trade imbalance between the two countries. In fact, because of the U.S. government’s excessive export controls, U.S. high technology exports to China are declining, and lower than those from the EU and Japan. According to Mr. Wang, it is in the common interests of the two countries to increase the export of high technology goods to China, and he urged U.S. high technology exporters to take this message to the U.S. government.

Ms. Yao of the CCCME explained that most of the new energy enterprises in China are private companies. They are experiencing difficulties in finding U.S. partners to acquire the advanced technologies they are seeking. She also echoed the concerns expressed by other government officials about overly restrictive U.S. export controls, explaining that products in the clean energy sector are purely for civilian rather than military use.

Some U.S. companies have expressed their concerns with China’s poor record on intellectual property rights protection, which they view as an obstacle to trade in clean energy technology. Mr. Wen Yuewen, President of GE Energy Group (China), shared his own experience. He said that to cooperate with Chinese enterprises and to earn their respect for IP rights, U.S. companies must first learn how to respect their Chinese partners. He further explained that GE Energy Group has set up many operations in China, and that all of them are running very well.

China’s National Development and Reform Commission has just listed clean energy in its revised industry catalog for foreign investment. However, according to Ms. Yao, since business development in this area is new and chaotic, the government needs to draw up a detailed plan to bolster cooperation with foreign firms that can supply advanced technologies. She also urged the Chinese government to provide incentives and support to push cooperation on clean energy between private local companies and their foreign counterparts. She said that “policy incentives, financial subsidies and information services are vital to help Chinese companies find more opportunities to cooperate with foreign partners on clean energy.”

Chinese media sources included 21 Century Economy Report, Xinjing News, and China Daily.

For further information about this topic, please contact Akin Gump.