China Undercuts Obama Green Energy Iniatives

Posted on February 19, 2011

All that talk from President Obama about reviving our economy and creating  jobs to foster clean, green living in the US has been too little, too late.

Read this summary of the current situation:

Chinese solar panel manufacturers accounted for slightly over half the world’s production last year. Their share of the American market has grown nearly sixfold in the last two years, to 23 percent in 2010 and is still rising fast, according to GTM Research, a renewable energy market analysis firm in Cambridge, Mass.

In addition to solar energy, China just passed the United States as the world’s largest builder and installer of wind turbines. []

Remember the images of our President visiting a wind turbine plant?  It was a Siemens plant in the Midwest that made components for turbines.  Siemens is a large mult-national company – not the small business Obama had hoped would lead the way to job creation.  However, while Siemens is in fact adding jobs, the company is foreign-owned and much of its money leaves the country.

The saga of a small new company going into the clean energy business is an economic horror story:

Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.

But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China. [NY Times]

Now remember, this company borrowed money from the good people of Massachusetts as a start-up.  That was a mere 3 years ago.  The good citizens of the state have not got the expected return on their investment.  The worst part of it is that China is doing this as part of a joint venture.  Such ventures with GM have resulted in Chinese buyouts of the partnership.  And the nightmare of it is that the Chinese will gain a unique manufacturing technology developed by Evergreen and funded by Massachusetts.  Perhaps loan agreements with US government bodies need to specify terms to include remaining in the US a minimum number of years or a percentage of the technology developed with the monies loaned.

Obama’s counter moves to stem the flow of  companies have not shown results:

The Obama administration has been investigating whether China has violated the free trade rules of the World Trade Organization with its extensive subsidies to the manufacturers of solar panels and other clean energy products.

While a few types of government subsidies are permitted under international trade agreements, they are not supposed to give special advantages to exports — something that China’s critics accuse it of doing. The Chinese government has strongly denied that any of its clean energy policies have violated W.T.O. rules.

[NY Times]

Looking to another body to due the job of rule enforcement is Obama’s way of dancing around our largest. Creditor.  And the Chinese business advantage extends to another area – getting breaks for Chinese businesses operating in the US.

…[C]ables, obtained by WikiLeaks, show that escalating Chinese pressure prompted a procession of soothing visits from the U.S.Treasury Department. In one striking instance, a top Chinese money manager directly asked U.S. Treasury Secretary Timothy Geithner for a favor.

In June, 2009, the head of China’s powerful sovereign wealth fund met with Geithner and requested that he lean on regulators at the U.S. Federal Reserve to speed up the approval of its $1.2 billion investment in Morgan Stanley, according to the cables, which were provided to Reuters by a third party.

Although the cables do not mention if Geithner took any action, China’s deal to buy Morgan Stanley shares was announced the very next day.

Posted in: CHINA, WAR - TRADE