I recently attended two of the nation’s leading clean tech industry conferences – the AlwaysOn GoingGreen Silicon Valley 2010 Conference in San Francisco (October 12-14) and the NREL Industry Growth Forum in Denver (October 19-21). Two emerging industry trends were apparent at these conferences, the first of which – that energy efficiency solutions are the “hot” industry segment of the moment – was the subject of the previous post.
The second recurring theme at these conferences was that China and its government funding machine present a very serious challenge to U.S. competitiveness in the clean tech industry, particularly in clean tech manufacturing. The initiatives that the Chinese government have taken to promote its clean tech industry have been well documented – most capably by recent comprehensive coverage in The New York Times by Keith Bradsher – and include, among others, billion-dollar loans to individual clean tech manufacturers at below-market interest rates, and generous land grants, subsidies and concessions for the siting, permitting and construction of clean tech manufacturing plants. When coupled with substantially lower labor costs (as compared to the western world) and a proactively, artificially under-valued currency, China has been able to use these initiatives to catapult its clean tech industry to the top of the world export stage with incredible speed. As a result, U.S. clean tech manufacturers have been forced to compete with their Chinese counterparts on what many perceive to be severely unequal terms.
At the recent conferences, many industry thought leaders spoke of the need to bring clean tech manufacturing back to the United States to grow the nation’s clean tech industry and contribute to the recovery of the economy. But how best to realistically achieve this goal in the face of China’s existing policies was a source of significant discussion. Most participants agreed – regardless of their political orientation – that the current political climate in the United States simply will not support activist U.S. government spending in an attempt to match China dollar-for-dollar in its programs. Most seemed to agree that one of the few realistic paths forward was through proactive foreign policy.
The Obama administration’s recent “tough talk” with the Chinese government regarding how China’s subsidies benefit Chinese clean tech exporters in potential violation of World Trade Organization rules, and the Treasury Department’s recent “tough talk” regarding the manipulation of the Chinese currency were cited as two ways that the U.S. government can help to level the playing field for U.S. clean tech manufacturers without spending significant amounts of taxpayer money. Yet unless China capitulates under pressure from the United States on these issues – which it has shown virtually no signs of doing to date – it seems that aggressive competition from Chinese clean tech manufacturers and exporters is here to stay. While our economy recovers, it seems the best hope for the near term to remain competitive on the world stage is a modest leveling of the playing field with China through foreign policy and a national debate on whether to make significant investments in our clean tech industry.
This post on Clean Tech was authored by Brad Weber.