American politicians and pundits should stop complaining about successful Chinese competition for greentech and other “good” jobs. Rather than complain, they should get off their soapboxes and work towards incentivizing and encouraging US industry. They should be asking following question: ”The Chinese have their plan, what’s ours?”
This article from yesterday’s Industry Week cites a congressional panel which concludes that China’s government is aggressively encouraging the foreign investment in, and development of, key industries– this to the detriment of those industries in the US. From that article:
China employs a variety of incentives, including subsidized land, energy and water, to foreign companies that relocate their operations there. China uses tax incentives and preferential loans, the report notes, to further reduce the cost of investing in China.
The report says China is selectively targeting industries such as auto parts, machine tools, information technology, optics, photonics and clean renewable energy. This policy, it warns, is contributing to the loss of jobs in the upstate New York area even as the state seeks to become a global leader in the renewable energy field.
The report adds that it is not just manufacturing jobs that are moving to China. “Advanced technology companies in the region that have been moving their manufacturing operations to China are now relocating their research, development and innovation operations there as well,” it finds.
The Chinese have been doing what they should do by building a platform for development by private companies, both local and foreign. They invest in the development of the industries and they get the jobs associated with those industries.
And here’s an example of the Chinese government’s “can do” approach to clean energy from a report by Reuters posted on November 15th:
China selects 294 solar power plants for subsidy
(Reuters) – China has identified 294 solar power projects with total generating capacity of 642 megawatts (MW) in its first pilot program.
Beijing has said it will subsidies [sic] at least half of the investment cost.
The capacity will be nearly 30 percent more than the minimum target Beijing set in July when it launched the unprecedented “golden sun” plan, which was part of China’s drive to catch up in a global race to find alternatives to fossil fuels.
One would expect that the Chinese solar panel manufacturer Suntech, or it’s Chinese competitors will get a lot of orders out of this initiative. Speaking of Suntech, two days before the above-mentioned article appeared, Reuters ran an article about China’s solar rooftop program:
Suntech to develop 20 pct of China’s Solar rooftop plan
Nov 13 (Reuters) – Chinese Solar panel maker Suntech Power Holdings Co Ltd (STP.N) said it expects to develop about 20 percent of the 91 megawatts of solar projects under China’s solar rooftop program.
The solar rooftop program was launched in March to increase the efficiency of buildings through photovoltaic (PV) solar systems.
Once again it seems that Chinese pols are actually doing something about encouraging clean energy and developing the industries to support it. (Suntech, by the way, is plowing some of it’s gains into job creation in the USA– t is building a solar power panel factory in Arizona. Everything’s connected!)
It reminds me of Taiwan in the 90’s. The government targeted computer manufacturing as key industry for development. They created research institutes devoted to technical and market development, and helped steer local companies into the field. They gave development loans to the 4 key players and Taiwan’s computer industry developed quite nicely.
Now I know it’s not that simple. There are trade agreements which need to be taken into account, and it might be desirable to establish job-creation metrics which would be tied to government incentives or assistance.
All of which leads me to Charles Schumer and his rant about Shenyang Power Group getting the lion’s share of the jobs associated with a huge wind power project in Texas. Schumer’s rant fails to mention that:
- Shenyang Power got the lion’s share of the jobs, but it also invested the lion’s share of the money for the project. (Yes, there is an application for stimulus money made by the American side, but it’s only for a pretty small minority shareholding).
- The turbines which will be made by Shenyang will all use a key component made by GE. I’m guessing it will use other imported (maybe from the US?) components as well, but I don’t know.
So the Chinese government invested and encouraged the turbine industry, and invested in a project in the States that uses turbines. They are putting up the money and taking risk, and stand to make money and get jobs out of it. Also,hundreds of thousands of US homes will get cleaner electric power. GE will get orders for their components. See how everything’s connected?
Yes, the Chinese government have focused on being competitive in key industries. That’s called leadership and that’s what they should be doing. It’s what the US should have been doing as well.
Stop complaining and start competing!