Posts Tagged ‘Stimulus’

Changing the China Clean-Tech Tone to Cooperative Instead of Combative

October 26, 2010 Leave a comment

This post was originally published in March – but it’s relevant to today – and a theme that I’ll continue to address. So it’s worth a read.

Maybe I’ve been naively won over by the spirit of the Olympics, but the overall U.S. approach to China and anything clean tech or job related needs to change from combative to cooperative. Politicians and pundits alike are seething over a series of perceived U.S. government missteps with respect to foreign companies receiving stimulus funds. But this is only the latest in a misguided American drumbeat toward clean-tech protectionism on one end, and cold-war era zero-sum thinking on the other.

Laying the groundwork for this is Tom Friedman’s relentless pushing of the Sputnik analogy that has set in motion a chorus of China clean-tech fear-mongering. The analogy has clear parallels but furthers a tone of fear and animosity that is unproductive. And when it comes to international relations the tone is almost as important as the subject. On one hand this is potentially a good strategy for energizing Cold Warriors in Congress and American workers in the Rust Belt, but I think we would do better to come up with something new.

Fortunately, over the past few weeks, several thoughtful editorials have contributed a more middle-road approach to U.S.-China clean-tech relations that I would recommend reading before making China (or any other country!) your clean-tech job punching bag.

Yale Environment 360 columnist, Christina Larson, makes the best case yet for dispelling a combative approach and perfectly sums up the main sticking points in her excellent piece “America’s Unfounded Fears of A Green-Tech Race with China.”

“Just what are Americans afraid of?” asks Larson. “To distill the cloud of anxiety, there seem to be three chief fears. The first is very tangible — jobs. The second is about America’s place in the world — will the U.S. remain a global leader in innovation? And the third is about leverage — will the U.S. control its future, or be beholden to a foreign energy gatekeeper, one that exerts undue pull on its economic or foreign policy?” In her article, however, she explains that clean-energy development for China and the U.S. could be a win-win situation.

Matthew McDermott at Treehugger draws from Larson’s piece in his article, “Let’s Deconstruct the Phantom China v U.S. Cleantech War” to point out that China’s gain in jobs doesn’t automatically come at U.S. job expense. “Most of the green manufacturing jobs that supposedly are going to be lost in the U.S. as wind and solar power manufacturing takes off in China haven’t actually even been created yet,” writes McDermott. During the Bush Administration, American clean-energy companies were hamstrung by the on-again-off-again production and investment tax credits while other countries sent clear market signals via predictable clean-energy policies. That’s chiefly why 79 percent of more than $2 billion in clean-tech grants for U.S. projects were doled out to companies based overseas that are now gobbling up U.S. market share. But even in this example, there is a China bias. Despite Iberdrola Renewables, the American subsidiary of Spanish utility Iberdrola S.A., collecting $577 million (more than any other company), politicians and pundit outrage has largely focused on the American-Chinese joint venture for a wind farm in Texas seeking $450 million of stimulus funds. That project would create 300 U.S. installation jobs but 2,000 manufacturing jobs in China, because it would use Chinese turbines.

A Reuters survey of American venture capitalists shows investors are unfazed by China. Many point to the U.S. as having the best ‘innovation platform‘ in the world that, when combined with its strong support of intellectual property protection, will continue to attract companies to the U.S.

In his article, “Is There Anything Left for America to Manufacture,” author and policy advisor Terry Tamminen draws historical parallels to Japanese products in the 1950s. The answer he provides to his own headline is “yes” and highlights clean-tech companies that are creating manufacturing jobs in strategic sectors in America today – as we have done in the past with defense, IT, and aerospace.

But manufacturing will always be a point of contention with China, regardless of the sector. And the sooner we come to terms with this, the better. It’s hard to compete with cheap labor. The reality is that even if U.S. companies end up manufacturing in-country, it will inevitably be on a track to automation, just like the semiconductor industry.

And while there is definitely room for improvement for both China and the U.S. in terms of trade and monetary policies (and other issues like domestic-content requirements) – both countries (and the world) have much more to gain from a cooperative rather than combative approach.

The reality is in some cases, like some Olympic events, China will be better. But a true athlete has great respect for a fellow Olympian operating at the top of their game. It encourages them to go back and train harder. America should look deeper at what it is we do best and leverage the unique benefits China brings. Politicians and pundits need to realize that the one thing other than the Olympics that has the power to transcend 20th century economic, environment and social conflicts is clean tech.

This post originally appeared on Clean Edge Jobs