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Mar
Cleantech Trip to China: Day 3
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
The view from the CNECC conference room
It was, for the most part, a beautiful day in Beijing. The skies were far clearer than yesterday and was even pretty warm in the middle of the day. Our new friends at the American embassy told me about times when they couldn’t even see across the street and remarked on how nice it was now.
Our day began with two briefings. One was by the China New Energy Chamber of Commerce; the second was from Prudent Energy.
The New Energy Chamber had been established in 2006 following the establishment of the renewable energy law. Their purpose is to provide expert, media relations, policy recommendations, research, meetings, and information. It was noted during the session that when components, machinery, and equipment for solar PV is considered (in addition to PV modules), the trade gap in this field is in favor of the US.
Prudent Energy is an VRB energy storage company that was born out of technology acquired from Vancouver, BC in 2009. It has 200 employees, forty patents, has raised investment capital from US sources, and currently has fifty projects underway or complete.
Joe Borich and Hal Calbom dining at the Beijing Train Station KFC
After a fine Beijing train station KFC meal, the delegation embarked on a bullet train that reached the speed of 300 Kph. We were amazed not so much by the speed of the journey to Tianjin, but how smooth the ride was.
In Tianjin, we met with the president and founder of Tianjin Lishen Battery Joint-Stock Co. Ltd., Mr. Qin Xingcai and his team. Lishen is an impressive operation. They are working with Spokane company, Demand Energy, to create demand smoothing energy storage systems. In addition, they have a joint venture in the creation of the Coda electric car, which is just entering the US market.
In the Lishen meeting room
The founder and his team toured us around the facility and talked to us about their company and views of the market. They are big believers in electric vehicles and are working on both cars and buses. They are endeavoring to create recycling systems and to create much more battery efficiency in the same mass. Among the best bets for improved batteries are advances in materials, they said.
US Ambassador to China Gary Locke
Our day ended with a great reception featuring former Washington State Governor and current US Ambassador to China, Gary Locke. Ambassador Locke addressed the delegation warmly and emphasized the seriousness of cleantech issues in China. Efforts that the Ambassador and his team are making in Beijing and throughout China, he said, were aimed at creating more jobs and benefits for both Americans and Chinese.
Mar
Cleantech Trip to China: Day 2
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
Beijing just before 5 p.m.
It was apparent before 6 a.m. that there are environmental problems in China. I headed out for a short run, but before I could get around the block I could feel and smell the dirty air. I felt a little sick for an hour during the late morning. I think I will try the indoor gym tomorrow.
Elle Carberry, China Greentech Initiative
Today was a full day of meetings. We started out with a briefing by the China Greentech Initiative. Elle Carberry told us that China’s experience bringing people out of poverty has been remarkable, but that it has come at an environmental cost.
She and her team emphasized the importance of water in China: It may be the largest issue in China. They seen it as a bottleneck inhibited future economic growth. In fact, there is an effort to divert water resources in the south of China to Beijing–in an amount the size of Lake Erie. Further, there will be efforts to significantly increase the development of natural gas–which requires enormous amounts of water.
- Seattle Mayor Mike McGinn presents a thank you gift to Deputy Director General Shen Jiang of the State Grid Corporation of China
We moved on to a briefing at the State Grid Corporation of China. SGCC is a huge nearly nationwide utility. It has 1.56 million employees, covers 88 percent of China, and has over one billion customers. The work that they are doing to find innovations to deliver power more efficiently and cleaner was impressive. The knowledge gained through many of their pilot projects may glean insights that can lead to improvements the world over.
A female executive, Li Wei, Regional Manager, International Department, of the Guodian United Power Technology Company Ltd. led the next discussion. Ms. Li is responsible for sales throughout North America, Australia, and Africa for United Power. The company has installed 1,337 wind turbines in China and in Texas. The largest of these wind turbine generators is capable of producing 3 megawatts.
Our final meeting of the day was with Shelby Chen, Managing Partner of Tsing Capital, a cleantech venture fund located in Beijing. Tsing Capital is close to closing a $350 fund and is on of the oldest and most experienced VC firms in China. Mr. Chen noted that, per unit of GDP, China requires 5 times the energy that Japan requires and 3 times that of the US. He believes that there are great business opportunities in China, but the firm’s investment strategy isn’t based on the ‘killer app’ model. Rather Tsing Capital looks for commercial success potential first. His advice to American firms looking to get into the China market is to make yourself into a Chinese company (in China).
We closed the day navigating through enormous traffic jams.
Mar
Cleantech Trip to China: Red Capitalism
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
To Western eyes, the Chinese economic system is a mystery. Part communist, part state commanded, and part entrepreneurial. How have the Chinese been able to create something brand new that has been so successful–and can it last?
Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise by Carl E. Walter and Fraser J.T. Howie is an endeavor to investigate this issue.
The Communist Party “treats its banks as basic utilities that provide unlimited capital to the cherished state-owned enterprises.” Walter and Howie describe a financial system in which the motivation for business activity is not the same as the goals of Western counterparts, but rather is to act as an arm of the state. It is a system, they say, that is fully controlled by the central government and with few alternatives.
As a result, enormous numbers of non-performing loans exist. Walter and Howie estimate that total debt to GDP (including non-performing loans) may be as high as 76%. This is troubling. Could the stage be set for a crisis like the US housing market meltdown of the last several years.
Maybe. Ultimately, these Chinese institutions are creatures of the state. As long as the state backs them, they won’t crash. The worry might be better directed at the willingness of the state to back these institutions if political or economic circumstances turn.
Mar
Cleantech Trip to China: The First Day
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
- Beijing from the highway
Flying west for eleven hours was a lot less difficult than I had feared. We arrived in Beijing around 5 p.m. after a non-stop flight from Seattle. We had very little difficulty in getting through customs, into town, and into the hotel. A terrific Chinese dinner with ten colleagues had me ready for bed. I fell asleep easily after being up for over twenty-four hours.
- An example of the fields of identical buildings in Beijing
My first impression of Beijing was that it wasn’t as different as I thought that it might be. It certainly didn’t seem like the Third World. There weren’t hordes of bicycles or other reminders of days gone by.
The buildings seemed largely industrial–at least the ones that we passed that were probably urban multifamily housing. There were fields of identical large buildings. The downtown commercial buildings could be in any modern city in the world–lots of interesting designs and differences. I would guess this is because the residential buildings are mostly government built, but the commercial buildings are sponsored by individual companies.
In fact, much of what we saw looked like virtually any huge city in the world. There was surprisingly little traffic on the drive in on Saturday afternoon and as we left early Sunday morning. But by mid morning, the roads were becoming busy, then crowded.
Given that the first day was a Sunday, the group was scheduled to tour the Great Wall of China, Tianammen Square, and the Forbidden City. And, of course, they got us to go into three factory/tourist traps. We didn’t buy much.
- The Great Wall of China
Our first stop was the Great Wall. Dating from the early 1400s, the Great Wall of China stretches 4,000 miles. The pictures don’t really do is justice. It is magnificent–and a hard climb to get up.
An eleven-year-old girl befriended us in the parking lot. She came to the Great Wall on Saturdays to practice English with her friends. We became her new friends and she gave me a pin.
We had a good, if somewhat bland, Chinese lunch. We noticed that the foreigners were all together upstairs and the Chinese were all downstairs. I am guessing the food was a bit more interesting downstairs!
Some of us were a bit surprised at how similar Beijing is to America. We were expecting something vastly different. Chinese standards of living have clearly improved massively over the past three decades. The crowded streets, for example, were filled with car brands that were very recognizable: Volkswagen, Ford, Toyota, Audi. There were some similar brands on storefronts. There were lots of signs in English, although we were occasionally amused by grammatical errors (“Protect the cultaral artifacts)”. It is almost as if English is a second language in China….
Tiananmen Square and the Forbidden City were massive. We walked for the better part of two hours from Tiananmnen Square through the Forbidden City. We noted a number of uniformed guards in Tiananmen Square who looked like they were very serious about their jobs. For the remainder of the walk, however, there was little evidence of any kind of security forces of any kind–notwithstanding large crowds in a cultural treasure.
Tomorrow begins the work sessions.
- Tom Ranken with Chairman Mao in Tiananmen Square
- The Forbidden City
Mar
Cleantech Trip To China: Genghis Khan
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
Genghis Khan and the Making of the Modern World by Jack Weatherford is another curious suggestion for preparation for a trip to China. Wasn’t Genghis Khan from Mongolia?
Indeed he was. The character described in Weatherford’s book is substantially different than the one that we think we know. While the Mongolian’s could be brutal almost beyond comprehension, they were quick to assimilate as well as be assimilated. They seemed to be more interested in finding and using the best way of doing things than they were in imposing their way of life on others. In doing so, they were able to bring new, better ways of doing things across vast distances and open up the world in ways that have few rivals. The empire that they created was probably the world’s biggest, ever.
Why is this relevant? Genghis Khan did not conquer China. Most of his conquests were to the west, reaching as far a Europe. Kublia Khan, his grandson, did become the ruler of China and was founder of the Yuan dynasty. He was Khan from 1260 to 1294.
The influence of the Mongols in China is and was significant. A significant portion of the Chinese people have Mongol heritage.
Kublai Khan appears to have consolidated his rule over China not so much by imposing Mongol traditions and systems on the Chinese, but by adopting many aspects of Chinese culture within the ruling elite. In some ways, the Mongols endeavored to become Chinese-like to legitimize their authority. The Chinese have infinite patience and a belief in the ultimate superiority of their civilization. Ultimately, the best defense was to assimilate the new ruling dynasty.
Jack Weatherford wrote a great book. Years of research combined with extensive travel in the regions gives him an insight into the characters and times that makes for a great read. Given the length of time, the distances, and the circumstances, it is amazing that so much detail remains of the era.
Mar
Cleantech Trip to China: Preparing
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
I will be participating in a cleantech study mission to China in late March and early April 2012. There are over twenty participants from Washington state in the group.
Years ago, I made the mistake of participating in an international study mission and not doing any homework in advance. I am going to try to be at least somewhat less-than-ignorant.
Joe Borich is the head of the Washington State China Relations Council. Joe served every President from Nixon to Clinton in a China-related capacity including Consul General in Shanghai. Of course, I have been pestering him with questions and suggestions for reading.
So my book reading list for the trip is:
- 1421: The Year China Discovered America by Gavin Menzies
- Red Capitalism, Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise by Carl Walter and Fraser Howie
- Genghis Khan and the Making of the Modern World by Jack Weatherford
- On China by Henry Kissinger
Mar
Can the Northwest Build a New Economy Transportation Sector?
Posted by Tom Ranken | 3 Comments | Categories: Commentary, Complete Digest
That was the topic among regional transportation experts in a recent WCTA meeting facilitated by Byron McCann. We do have a surprising number of strengths–and weaknesses–in the area. Of course, there are a number of opportunities and threats, too. So, to make some sense of some of the discussion, I have endeavored to summarize many of the thoughts here into at classic SWOT analysis: What are the Pacific Northwest’s Strengths, Weaknesses, Opportunities, and Threats when it comes to the development of a new economy transportation sector?
Please comment!
Strengths:
- Digital expertise
- Consumer demand for greener transportation
- Development of charging station infrastructure
- Great research institutions
- Expertise in materials
- The cost of electricity is low
- Military presence as potential leaders and buyers
- Entrepreneurism
- Developing battery technology
- Specialty manufacturing
- Aerospace expertise
- Telematics firms
- A trade association (WCTA)
- Truck manufacturing
Weaknesses:
- Not enough wins…yet
- Little primary sector expertise—Seattle isn’t Detroit
- Capital—particularly big capital
Opportunities:
- Heavy truck manufacture
- Conversion technology and companies
- Developing regional EV entrepreneurs
- Solar powered cars??
- State participation: fleet purchases/involvement
Threats:
- Other regions buying out successful startups
Conclusion: There may well be portions of a new economy transportation sector that we can develop in the region that might become transportation sub-clusters. Digital applications in vehicles, expertise and validation in converting vehicles to new sources of fuel, and almost any aspect of heavy trucking are possibilities….
Mar
Bill Gates: It’s ‘Crazy’ How Little Is Invested in Clean-Tech
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
Source: Wall Street Journal, February 29, 2012.
Microsoft founder Bill Gates, who spoke at the ARPA-e conference today, decried the tremendous lack of funding in the cleantech space,especially governmental funding. “It’s crazy how little we are funding this energy stuff.” “If we are underestimating how hard it is, we wind up underfunding,” said Gates. 90% of novel energy projects will fail, said Gates. “We need a thousand companies.”
Read the entire article here.
Mar
Walter Frick: There is No Cleantech ‘Bust’
Posted by Tom Ranken | No Comments | Categories: Commentary, Complete Digest
Source: Walter Frick, Boston Inno, February 14th, 2012.
Walter Frick in a blog post makes the case that cleantech has hardly ‘busted.” Rather, he argues, that the investment curve has trended with overall venture investing–and the economy–and that it remains on track. He concludes that “this hardly amounts to a “bust.” These are the growing pains of a relatively new innovation sector. One that isn’t going away anytime soon.”Read the full story here.
Mar
Cleantech Trip to China: From Beijing to Shanghai
Posted by Tom Ranken | No Comments | Categories: Cleantech Trip to China, Commentary, Complete Digest
I have only been in Shanghai for a couple of hours–mostly in my hotel room. But it is HUGE. Our bus ride from the airport took about forty-five minutes and you could probably lose Seattle ten times–easily. High-rises stretch forever in every direction. If there is an end to them, I haven’t spotted it yet. And many are brightly lit.
We began the day with an invigorating briefing at the US Embassy in Beijing. Rosemary Gallant and several other embassy staff were great in putting what we were seeing in context. As it is 11 p.m. here and I have to be up 530 a.m., I will summarize some of what we discussed in bullet points. Some of this stuff is really thought provoking:
Following lunch, we began our journey to Shanghai–which took forever. There was a long wait and delay in the Beijing airport and we got in late. Now to bed….