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How to Get Rich Investing in Stocks by Riding the Electron Wave

Will China Save CleanTech

Commodities / Renewable Energy Nov 02, 2011 - 07:22 PM GMT

By: Andrew_McKillop


Best Financial Markets Analysis ArticleOne of the most derisory add-on components to the supposed miracle accord cobbled together under France's Sarkozy and Germany's Merkel last week, to save Europe through a Bad Debt Fund (called the Financial Stability Fund) was the claimed sincere interest of China to partly finance this fund by recycling some of its huge stash of euros and dollars - while they still have any value. French state TV channels went as far as telling their supposedly gullible or plain stupid viewers that the Chinese interest almost verged on humanitarian concern !

With no surprise at all, the leftover players in the mauled and sinking Cleantech sector now pin their hopes on magic bailouts - from China. The usual way this scrabble for new funds is described, after the CO2 talk, is that Cleantech boomers, or rather doomers "want to understand the future of clean tech". Not surprisingly the famous one-liner of their arch-hero neoliberal ikon of the 1980's, Mrs Thatcher does not figure in their blather: No Future.

The trick mantra of today is mouthing the magic words “China” and “Cleantech” in one and the same breath. For China of course, this sector of mostly high-priced gadgets and gimmicks was just one more industry to destroy in competitor countries, recycle the cash from blindly consuming buyers of the latest and mostly worthless gadgets, and play Cheshire Cat on top of its ever bigger cash hoard.


Today's Cleantech boomers in the western "postindustrial" countries consuming every imaginable type of industrial goods - and now Cleantech industrial goods - are of course almost prostrate with respect and admiration of the Chinese juggernaut. The Chinese didn’t just talk about it - they did it ! In a similar way to their corporate lookalikes prostrate with admiration of Saudi petrodollars and never at a loss for a new gimmick idea to dangle in front of increasingly pompous Petromonarchs, the Cleantech boomers are using their last energy to dredge and recycle Chinese trade dollars and euros.

Today, most businesspersons, investors, politicians, entrepreneurs, analysts and students understand that the Chinese Cleantech juggernaut can't be beaten by the fragile, grab the profit and run start ups and fly by night hedge funds, called Cleantech-Low Carbon-Climate Correct, that proliferated through

about 2006-2010. Having failed, they now grovel. So why does China really scare these fragile but rigorously greedy heroes of a receding past, like Sir Richard Branson and a swath of big name Silicon valley geeks? Their problem is they have to imagine, and say that Europe and America can compete with China in Cleantech. At the same time, because they are already beaten they have to attack China’s aggressive push, and the supposed ambivalence of support and aid they get - meaning not enough free cash handouts from governments and a decline of idiot investors - to help them waste money, as long as it belongs to somebody else, and they are subject to no control whatsoever: "the Free Market will decide".

They point to the China Development Bank (CDB) and its relentless funding of Cleantech: nothing like this entity exists in the late stage neoliberal No Alternative western consumer countries. It would be treated as a North Korean notion if anybody dared propose it. European and American politicians battle it out with a string of Victorian capitalist style cases of corporate theft, fraud and insider dealing in the Cleantech sector - such as Obama's Solyndra LLC scandal and the $535 million of government backed funding that disappeared - but the Chinese use rigorous state control and pump billions into projects which work in the Cleantech sector. That is the difference.

Some may fail, but corporate graft in Low Carbon is under control - in China - for the moment. The result is simple: Western players fold one after the other, junk their employees in the gutter and file for Chapter 11 bankruptcy protection, the state and legal process suddenly being great when the fraudsters need protection from their victims.


Under the Chinese model the CDB put more than $30 billion in credit into a very selective group of companies - not a vast range of undercapitalized hopefuls using the same tech and stealing the same patents, reinventing the wheel time after time, and expecting public acclaim - and sales. In the solar energy domain the CDB targeted the companies Suntech Power, Trina, and Yingli. Acting the same way with strategic state-controlled financing in windpower, where bit-part players do not play, Chinese government investment sources allocated about $15 - 20 billion in state-backed credit to its biggest windmill makers Sinovel Wind Group and Xinjiang Goldwind Science & Technology, rapidly raising them to the same status as GE, Vestas, Suzlon, Gamesa and Siemens. All of these now distanced actors on the wind energy scene are presently scraping for Chinese funding, market share and sales.

Unlike the acres of blogs and talkshow content on Smart and Super Grids that Western hopefuls fill out daily, China is attacking this major technical and infrastructure problem - which will snowball if windpower and solar power plant generating capacity rises above about 25% of total capacity - through setting aside around $45 billion for smart-grid companies and technologies, for the period 2011-2016.

Advantaging the higher goal of super grids able to transport large amount of power round the clock, over smart grids which only serve to limit local demand through tariff price changes and supply cutoffs round the clock, China will likely leapfrog the coming power blackouts in countries that played Victorian roulette wheel capitalism but do not like the results. The blackouts are programmed and certain because of refusal to act against corporate graft - of this we can be sure.

China's Cleantech investments haven’t gone unnoticed in the US and Europe. The usual backstop from beaten players is heard every day: typical claims are that China’s solar industry and windpower industry have an unfair trade advantage. The answer is simple: produce it yourself instead of whining.

One other thing that makes China and its western neoliberal rivals so different is that Chinese regional leaderships are fully aligned and coordinated behind Cleantech whenever it can deliver real action and real jobs - not paper profits and frothy talk. They fight among amongst themselves for leadership - not how much spin they can put on an IPO when floating fly by night small companies "reinventing" energy and rediscovering the Victorian capitalist virtues of fraud, theft and graft.

The liberal free market capitalist model, which favours fraud, theft and graft and is unable to produce industrial leadership or create sustainable jobs has now reached extreme of waste, in the West. To be sure, this has "gone political" as consumers and voters are hit with ever rising energy bills to finance the fraud, theft and graft.


Cleantech geeks in the West now ruefully admit they were beaten. China got ready to outsmart them and then it beat them in the space of less than a decade. How did it do it ?

Future energy is above all an industrial, technical and resource problem. Political leaders in China are mostly scientists and engineers, many from the electric power and oil industry. In the US and Europe these speakers at the microphone with nice speeches and rousing slogans, for idiots, are mostly lawyers, bankers and non-scientific and non-technical talkers. Totally unlike them, scientists and engineers can appreciate and understand facts and figures - not rhetoric and spin.

To be sure, China’s clean-tech push will be riddled with obstacles and challenges. The world faces a sea change in energy from fossil-dominant to less-dominant, and side issues like exploding faucets from shale gas leaks, exploding wind turbines, pollution concerns at solar PV manufacturing plants, rare earth minerals mining pollution, and a series of other environment and quality control issues will affect the road ahead. One thing is however sure and certain: almost nothing will unravel Chinese commitment to Cleantech. Instead, China will redouble its efforts because its national energy future depends on it - not flimsy grab it fast profits for fast talking green energy charlatans.

This is in fact known on the US and Europe but never hits the headlines. US politicians of the stature of Republican leader Cliff Stearns have gone on record saying: "The USA can't compete with China to make solar panels and wind turbines,” meaning the commitment wasn't there, and the Cleantech bone was thrown to the hedge fund dogs to devour. The results are on view every day.

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2011 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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