China has taken the lead in the race to develop and commercialize a range of low carbon technologies, according to a report released by an international NGO in Beijing on August 19, 2009.

British-based environmental NGO The Climate Group released a report entitled China’s Clean Revolution II: China’s opportunity for a low carbon future in Beijing on Wednesday. It believes that in a remarkably short space of time China has taken the lead in the race to develop and commercialize a range of low carbon technologies. Aided by ambitious government policies and a new breed of entrepreneurs, Chinese businesses are now among the top producers of electric vehicles, wind turbines, solar panels and energy-efficient appliances.

At present, China manufactures 40 percent of photovoltaic products and over 50 percent of solar power heaters worldwide; what’s more, China produces and assembles over 70 percent of equipment installed in wind power stations worldwide. And the future growth opportunities for Chinese and foreign companies are huge.

The report describes the recent development of the low carbon economy in China in four fields: new energy vehicles, industrial energy saving, low carbon building, and renewable energy. It also gives its estimates on the outlook of these industries and the influence of policies implemented by the Chinese government.

Per capita car ownership is only one third of the world average, but annual petrol consumption accounts for 60 percent of the total volume of China’s oil production. The report estimates that, on present trends, by 2020, China will have more than 150 million automobiles and will consume over 250 million tons of oil.

The report points out that developing new energy vehicles, especially electric cars, is the only solution to the conflicts between huge market demand for automobiles and energy supplies.

Industrial energy saving is key to China’s sustainable economic development. At the beginning of 2009, China issued revitalization plans for 10 major industries (including textiles, steel, automobiles, shipbuilding, equipment manufacturing, electronic information, lighting, petrochemicals, logistics and nonferrous metals). Regulations on industrial restructuring, energy saving and environmental protection were given great prominence in these plans.

In terms of low carbon building, China lags far behind the global trend. In his speech, Zhang Yue, chairman of Broad Air Conditioning, said that energy consumption of buildings in Beijing is four to seven times higher than in Germany.

By 2010, the market for low carbon buildings in China will surpass tens of trillion yuan, according to a medium and long term plan for energy saving issued by National Development and Reform Commission (NDRC) in 2004.

In the renewable energy field, China is now gradually transiting its role from manufacturing giant to consumer. The Chinese government has launched policies aimed at nurturing sustainable economic growth point and building balanced industrial structure.

However, emerging low carbon businesses face problems. The report says there are two bottlenecks that China must break through – R&D and promotion of new technology, and broadening access to capital-raising channels.

Although the government is doing its best to promote new energy vehicles and many Chinese automakers are putting new models into the market, the funds invested in new energy vehicle R&D are much less than in international counterparts. Moreover, core production technologies of key parts in vehicles are still monopolized by foreign firms. Chinese parts makers are lagging behind.

Additionally, more efforts needs to be put into the implementation and supervision of environmental protection policies, the report warns.

Zhang Yue expressed his worries in an interview with the Caijing Magazine, saying: “some people will use these preferential policies to make money. It may result in the expansion of some high energy consumption industries.”

Former British Prime Minister Tony Blair, one of the founders of the Climate Group, gave his views on the report.

"China has demonstrated that it has the capacity and determination needed to achieve a rapid, large-scale transformation to low carbon ways of building, producing and consuming," he said, "Achieving such a transformation would take continued leadership from China's government and the support of a global deal on climate change," he said. "The benefits, in terms of avoiding climate change as well as economic development and energy security, will be tremendous."

(China Development Gateway by Jiao Meng August 22, 2009)