I ran across a really interesting article while I was reading Insight Magazine: The Journal of the American Chamber of Commerce in Shanghai. The article, entitled “China Takes the Lead in the Global Greentech Race,” immediately caught my attention because I minored in environmental studies at Georgetown and am also interested in emerging technologies associated with the green movement. The feature piece is written by Al Beebe,  the managing director of the China Greentech Initiative.  I attached the article below for anyone else interested in an update on the green movement here as well as opportunities for entrepreneurial ventures in the field. Additionally I met a Georgetown alum at a meet and greet recently who works in the Department of Commerce in Shanghai, so hopefully I will be able to set up a meeting with someone she works with to get more first hand knowledge on the subject.

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China Takes the Lead in

the Global Greentech Race

BY AL BEEBE

EDITED BY ESTHER YOUNG

According to China Greentech Initiative’s latest report, China’s rapid economic growth, development needs and urbanization have framed greentech market opportunities.

Within a few years, China has emerged as a global greentech leader. As predicted in the China Greentech Report 2009, China is now the leader in a number of greentech indicators, but more importantly, China stands at the center of almost every greentech market. No greentech investor or company can ignore China. The 2011 Report– a companion document to the 2009 edition– is the culmination of an open source, commercial collaboration of over 100 of the world’s leading technology companies, entrepreneurs, investors, NGOs and policy advisors who participated in the China Greentech Initiative’s 2010 Partner Program. This latest edition provides a view on the world’s fastest growing sector in the world’s fastest growing market, with a focus on why China is emerging as a global greentech leader, how each of the six sectors in which the China Greentech Initiative focused in 2010 are evolving and what prioritized greentech opportunities exist within each of these sectors.

“In terms of size, opportunity, need and government support, China’s greentech market is racing ahead of other nations,” says Randall S. Hancock, China Greentech Initiative co-founder. “China’s overall market leadership may not be a surprise to some, but we believe that people will be surprised to learn that many of the biggest greentech opportunities in China exist in not-so- obvious areas.”

China’s rapid greentech growth

The China Greentech Report 2011 identified five themes that will play a role in the development of China’s greentech market in the coming year:

1.  The growth in China’s greentech markets has been dramatic: The stunning growth in China’s greentech markets has continued, outpacing even the on-going rapid 8–10 percent growth in China’s economy over the past few years. Government policy has spurred the market in every greentech area, and with the recently adopted 12th Five-Year Plan, China’s government has taken its already-ambitious targets and raised them yet again.

2.  Urgent water, energy security and pollution problems compel further action: China has adopted major policies to promote greentech as a pragmatic reaction to pressing needs. In energy security, the country now imports over half its oil, and is now the world’s second largest oil-importing nation. Regarding water, droughts, climate change and human-induced shortages threaten China’s gains in food security, and China’s government has stated that three quarters of the nation’s lakes are polluted. Various Chinese and international organizations estimate environmental problems reduce GDP 3–4 percent annually. Most urgently, pollution kills 750,000 Chinese people per year, according to World Health Organization estimates. These urgent needs mean the government will continue to pursue major policies to promote greentech.

3.  Urbanization continues, offering an opportunity for more sustainable growth: China’s dramatic urbanization presents unprecedented challenges, while also offering chances to address problems through policies on eco-cities and efficiency. Over 400 million Chinese people have already migrated to cities, and hundreds of millions more will. How can China’s cities accommodate these new residents while addressing goals for sustainability and energy efficiency? China has already announced 18 eco-cities, low-carbon zones and related projects.  Some projects, such as the Liangjiang New Area in Chongqing, stand above the rest in terms of scale. It is an open question whether these eco-cities will live up to their name, but the size of the urbanization trend means the government will have to act to ensure they do.

4.  China is an international energy player: China is becoming a major player on the world stage, and energy is a big part of this trend. In carbon and environmental policies, the world has started to recognize that China is capable of leading through action at home, at least in certain areas such as renewable energy. China’s resource scarcity problems are now the world’s problems. As China’s annual oil consumption approaches half that of the U.S., China must look to imports to meet growing demand.

5.  China is poised to capture markets abroad:China has used an aggressive industrial policy to ensure it captures commercial benefits from the worldwide race for energy. Nowhere is this more apparent than in wind power, where China now leads the world in both demand and supply. Thanks to policy support at home, China’s oil, solar, high-speed rail and electric vehicle industries are all poised to expand abroad. These trends translate to opportunity, but not always directly. As China’s greentech market has grown it has become more complex. The five major themes we have noted above, along with our insights for each sector, underline one observation: growth does not always translate directly to opportunity for the private sector or foreign participants. Some of the greatest opportunities are often some of the more surprising ones, representing market niches ignored by most observers.

“China has adopted major policies to promote greentech as a pragmatic reaction to pressing needs.”

 Opportunities ahead

The China Greentech Report 2011 also synthesizes assessments of six greentech sectors: Cleaner Conventional Energy, Electric Power Infrastructure, Green Building, Cleaner Transportation, Renewable Energy and Clean Water. In total, the 2011 Report assesses 19 opportunities, including:

•  China’s Emerging Electric Vehicle (EV) Ecosystem – The targets for China’s EV market are high and the incentives are strong, but the opportunities may not be as easy to access as some predictions state. The China Greentech Report 2011 explains the challenges facing China’s EV market and why low-speed EVs may be a bridge that will allow China to gradually adopt high-speed EVs on a large scale.

•  China’s Rural Electrification Potential – Renewable energy has been a focus of China policy for years now, but most of the focus has been on how renewable energy (wind, solar and hydro, among others) will power big cities via the State Grid electricity distribution system. Rural communities may offer a potentially huge opportunity for renewable energy providers, in that they are often willing and able to be self- sufficient in their energy needs.

•  Accelerating Green Building Materials Adoption through Supply Chain Practices – CGTI predicts that one of the biggest growth opportunities in China’s greentech markets will be green building. However, the most urgent opportunities lie not necessarily in green building development, but in advanced materials, green building supplies and supply chain management.

•  Wastewater Treatment Plants Hidden Opportunities – As part of a commitment to confront its water crisis, China built wastewater plants that increased the treatment ratio from 34 percent in 2000 to 70 percent in 2010. While there are good opportunities in the operation and maintenance (O&M) markets as well as the build-operate-transfer (BOT) markets, a less obvious but significant opportunity lies in converting the wastewater sludge into energy and new revenue opportunities. Companies may be able to partner with public and private entities to tap this relatively underserviced market.     

“CGTI predicts that one of the biggest growth opportunities in China’s greentech markets will be green building.”

The China Greentech Initiative is an example of the collaboration that is needed among diverse stakeholders, both government and commercial, to accelerate our common goal of an environmentally sustainable future for China and the world. During the course of the year, AmCham Shanghai looks forward to working with CGTI and other important stakeholders in the pursuit of that common goal.