From Hangzhou to Copenhagen - Two Critical Months for Sino-US Relations
Source:Chief Editor, CCEN   Date:2009-11-04   Author:Tom Pellman

As Chinese and American officials convened in Hangzhou for their annual Joint Commission on Commerce and Trade (JCCT) meeting on October 22, clean energy and the environment took center stage. With the UN Climate Change Conference in Copenhagen looming large (one month away and counting), US President Barack Obama scheduled to visit Beijing on November 15, and US trade disputes against China swirling, there was much to talk about.

 

Chinese Vice Premier Li Keqiang called for the two countries to boost research and technology exchanges across a range of clean energy industries. Cooperation, mutual benefit and an end to trade protectionism - the usual chestnuts - were highlighted. Despite developmental differences between the two countries, Li said, the countries' interests in a sustainable existence were the same.

 

For Washington, one of its main priorities was pressing for more market access for US clean energy companies in China. Western enterprises on the whole have oft complained of being cut out of China's largest and most lucrative domestic clean energy projects.

 

"These are the issues we've been raising in a number of discussions that are part of the JCCT. Our objective is to allow American companies to compete," US Commerce Secretary Gary Locke told reporters at the meeting. "We recognize that the Chinese companies also have much to offer the United States, and we seek a level playing field for both sides."

 

Locke described the Hangzhou meeting as "productive," and the days following the JCCT meeting certainly bore him out. Less than a week afterwards, Beijing announced its intention to drop its long-standing local manufacturing requirement on wind power projects, a policy that had mandated 70% of projects' components and technologies be sourced domestically. Despite years of lobbying from (more firmly established) European wind power companies, it was American interests that seemed to have made the difference.

 

"The US had hoped that there would be no local content requirement in the wind power market and we agreed with that," said National Energy Administration director Zhang Guobao. "So US wind power technology will enter the Chinese market equally and freely." Well, that was easy! No word yet on a timeframe for when the policy will be dropped.

 

This announcement coincided (was related to?) a major breakthrough in Chinese clean energy firms' quest for a place in the US market. State-funded Shenyang Power Group and US wind farm developer Cielo Wind Power announced on October 29, plans for a US$1.5 billion, 600 MW wind farm in Texas, the first time a Chinese manufacturer will export wind turbines to American soil. The deal has raised some protectionist hackles in the US on account of it (a US-China deal) receiving US federal stimulus money, but it looks likely to go ahead nonetheless.

 

It's heartening to see the world's two biggest CO2 emitters engaging each other on renewable energy and, more importantly, demonstrably getting deals done. But, even this bit of clean quid pro quo does not brighten the skies for Copenhagen, where the world is hoping for a unified and binding accord to stem climate change. Senior US climate change negotiator, Todd Stern, has already come out and said China and US would not reach a "broad agreement per se" on specific emissions reduction targets during President Obama's visit to China in November, all but ensuring the countries will fail to do the same in Denmark.

 

Then again, protecting the environment by way of billion-dollar investments, new jobs and happy investors is easy. It's curbing, conserving and cutting-back that's the hard, yet inescapable, part.

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