“We make ourselves Poorer, Technologically Backward, and Less Influential”
The goal for China was always to be a global leader. Nothing has changed. My trips to various Chinese facilities building automotive components for US automotive countries, I could see how their technology was evolving. The United States did help them real such heights by sourcing production to their overseas plants. China could copy the componentry, improve upon it at lower cost, and use it domestically (China).
They were easy to work with and learned English rapidly. The only issues being shipping which would be 5-6 weeks from their facility to ours. You own the inventory as soon as it ships.
Chinese Electrotech is the Big Winner in the Iran War
China is strong in many industries, it is utterly dominant in electrotech, the cluster of industries — solar panels, wind turbines, batteries and electric vehicles — at the heart of the renewables revolution. Or as the Wall Street Journal puts it, China’s “green industrial complex” rules. China accounts for more than 80 percent of global production in all these sectors with the exception of wind turbines. In the wind turbine sector, China’s share is “only” 60 percent because Europe retains a significant role.
Why does China dominate electrotech? Industrial policy — deliberate government promotion of these industries — is part of the answer. But a key driver of China’s success has been the speed with which the Chinese themselves have been adopting renewable energy, creating a huge domestic market that provides their electrotech industries with big advantages even in foreign markets.
There’s a widespread, completely erroneous belief among opponents of renewable energy that China produces electrotech equipment but doesn’t use the stuff itself. Speaking at the World Economic Forum three months ago, Trump declared that:
“China makes almost all of the windmills and yet I haven’t been able to find any wind farms in China. Did you ever think of that? That’s a good way of looking at it. They’re smart, China’s very smart. They make them, they sell them for a fortune. They sell them to the stupid people that buy them, but they don’t use them themselves. They put up a couple of big wind farms, but they don’t use them, they just put them up to show people what they could look like. They don’t spin; they don’t do anything. They use a thing called coal mostly.“
China does, in fact, still burn a lot of coal. But its use of wind and solar power is rising rapidly. The demand for solar panels, wind turbines and batteries depends on the increase in renewable generation rather than its level. And China’s growth in renewable energy, both wind and solar, has been larger than that of the rest of the world combined:
And electrotech is exactly the kind of industry in which a large domestic market translates into success at exporting into other markets. For all of the component industries of electrotech are marked by steep learning curves: the more a country produces, the better it gets at producing. By dominating electrotech now, China is gaining experience and know-how that no other country can match. It is also creating an industrial ecosystem of specialized suppliers that, again, no other nation will be able to rival. And the low costs generated by this industrial ecosystem gives China a huge advantage in global markets.
Under President Biden the United States took much needed steps toward developing its own electrotech sectors, notably batteries and electric vehicles. It also sought to accelerate the growth of renewable energy in general. But not only has the Trump administration canceled all of Biden’s renewable energy programs, it is also actively trying to block private commercial investments in renewable energy.
By the time America frees itself from Trump’s fossil fuel obsession, if it ever does, China’s lead in the manufacture of renewables will probably be insurmountable.
Now, a world that relies on China for solar panels and batteries isn’t necessarily a bad thing. It’s certainly less risky for most nations, politically and economically, than relying on LNG imports from Qatar — or, at this point, the United States.
Furthermore, although the Trump administration is full of climate denialists, climate change is continuing. March was a record warm month in the United States:
Given the rate at which the planet is warming, a shift away from fossil fuels can’t come fast enough. Where the equipment needed to make that shift happen was manufactured is a secondary issue.
Yet it’s sad to watch this country sabotage itself and cede the most important industry of the future to China. In doing so, we make ourselves poorer, technologically backward, and less influential in a world that is speeding towards the energy revolution. In the end, we aren’t just burning fossil fuels; we’re also burning our future.
Chinese Electrotech is the Big Winner in the Iran War, Paul Krugman