China's Green Investments and Growing Economic Preeminence

Companies operating in China are seeing a wealth of opportunities in the green sector as are investors. However, Chinese government investments are driving even greater opportunities on the horizon.

In 2010, China surpassed Japan as the world’s second-largest economy. In three-decades China has emerged from Communist isolation to global superpower. China is also leading the world in its support for a green economy.

Domestically China has lifted 300 million citizens out of poverty. Globally China has helped lift the world out of recession. According to the Organization for Economic Cooperation and Development, China's “double-digit” expansion was responsible for a third of global growth in 2010. The International Monetary Fund (IMF) said in a report on Oct 6, 2010 that China's growth was projected to be 10.5 percent in 2010 and in 2011 growth is projected to be 9.6 percent.

China has even overtaken the US as the world's biggest automobile market. It is also increasingly leading the world in technological innovation and new patents. China is already the world leader in wind and solar energy manufacturing, firmly establishing its global dominance in cleantech.

China’s clean-energy success is due to the same factors that made it a manufacturing leader, low labor and construction costs, expanding universities that produce large numbers of engineers and technicians, improving telecommunication and transport systems.

The green market is destined to be the single biggest economic trend of the twenty-first century and China's leadership is cementing the nation's role as the world's green leader. China's green market investments will soon propel that nation ahead of the US as the world's pre-eminent economic power.

PricewaterhouseCoopers said in a January 2011 report that China is on course to overtake the US as the world’s largest economy around 2020. Ten years from now a waning superpower may look back and realize that Chinese government investments provided the edge that enabled China to out-compete America.

© 2011, Richard Matthews. All rights reserved.

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The Chinese Government is Investing in Clean Energy while the US Congress Dithers

In January, Chinese President Hu Jintao came to Washington on an official state visit. In a joint statement President Obama and President Hu said that they "view climate change and energy security as two of the greatest challenges of our time."

During a press conference, President Obama said, “I believe that as the two largest energy consumers and emitters of greenhouses gases, the United States and China have a responsibility to combat climate change by building on the progress at Copenhagen and Cancun, and showing the way to a clean energy future. And President Hu indicated that he agrees with me on this issue.”

With a 2009 investment of $34.6 billion (US), a 2010 study by Pew Charitable Trust considers China to be the world's leading country in clean energy financing. Due to China's domestic policies that promote the use of renewable energy, China's investment and financing for clean energy is almost double America's $18.6 billion (US). The Pew study said countries like China, Brazil, the UK, Germany and Spain that have "strong, national policies aimed at reducing global warming pollution and incentivizing the use of renewable energy are establishing stronger competitive positions in the clean energy economy."

According to a 2010 International Energy Agency report, Chinese energy consumption has doubled over the past decade, and will soar 75 percent by 2035, accounting for more than a third of total global consumption growth. To help meet this demand, China is aggressively investing in renewable sources of energy.

China's need for energy will transform the global clean energy landscape, dramatically expanding markets for clean technologies and prompting major state investments in low-carbon energy alternatives. China has become the world's most vibrant market for a range of green economy technology including renewable energy, high-speed rail, smart grid technologies, and even a growing domestic market for electric and plug-in hybrid vehicles.

China has also set ambitious targets of 100 gigawatts of wind power and 20 gigawatts of solar by 2020. Each target is supported by feed-in tariffs and other financial incentives for renewable energy projects, and in 2009, China surpassed the United States as the world's largest market for wind power.

China is also the world's largest solar cell manufacturer with an annual output of 4,382 MW and the number is still increasing. The current yearly output of solar cells in Jiangsu Province alone accounts for 25% of global output.

China's planned investment in the clean tech market amounts to $740 billion or 5 trillion yuan while the American Recovery and Reinvestment Act has allotted less than 5 percent of that amount to clean tech.

Despite a wealth of bilateral engagements and coordination between the two leaders, America is not competing on the same footing in clean tech. The current American energy policy can only be defined as stupid. While the Chinese government is making massive investments, a climate denying Congress ensures that the US will continue to fall behind in the clean technology race.


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Democrats' Chances in the 2010 Midterms

As voting day approaches for this year's midterm elections, Democrats are trending in the right direction. However, the momentum leading up to the midterms favors the Republicans who are fueled by rabid hatred of Democratic policies if not Obama himself.

The conventional wisdom suggests that the Republicans will fare well because they have an energized base of support. However, according to new surveys, the black vote may break with tradition and turnout in greater numbers for midterm elections. Surveys found that 80 percent of black Democrats are as interested, or more interested, in the midterm elections as they were in the 2008 presidential election.

Also, 62 percent of all black Democrats polled said they are likely to encourage others to support certain candidates, compared with 47 percent of white Democrats and 57 percent of all Republicans.

A month ago, a Washington Post/ABC News poll indicated that Republicans had an enormous 53% to 40% lead among likely voters. A month later, polls showed the Republican advantage slipping, and the Washington Post/ABC News poll in early October offers similar evidence. On the generic ballot, a month ago, the GOP lead was 13 points, (53 percent to 40 percent). More recent polls indicate that the Republican advantage has shrunk to six points, (49 percent to 43 percent).

An October 17th NPR article reports that polls are showing the GOP's advantage in many key Congressional races is indeed narrowing. President Obama’s approval rating has also improved to 50 percent, and support for the president’s handling of the economy is up four points to 45 percent.

Republicans may have peaked in late August and early September and the Democrat's fortunes are improving as we enter the final stretch.

Midterm elections are rarely harbingers of presidential elections. Remember the success that Republican's had in the midterms in 1994 and subsequent Clinton victory in 1996. However, the six point spread may yet prove devastating to Democrats particularly when you consider that at this point in 1994, the GOP had a two point lead and they went on to make significant gains.

Perhaps Americans will wake up to the fact that this midterm election is not about checks and balances, or even venting frustrations, it is about a choice between progress and two long years of legislative stagnation.

People are voting Democrat so that the US can be competive with the rest of the world, others are voting Democrat to protect the planet for future generations, still others are voting Democrat to keep the wolves out of Washington.

Next: Election 2010 Midterm Predictions


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