Wind Direction Unchanged by US Trade Victory Over China

Last week, Beijing acquiesced to US demands and ended subsidies to wind turbine manufacturers using Chinese-made parts rather than imports. The Guardian’s Jonathan Watts, however, argues that Chinese wind firms will retain the competitive advantages conferred by heavier political backing.

Subsidies undoubtedly contributed to the speed at which Chinese firms like Sinovel, Goldwind and Longyuan rushed into the ranks of the world’s biggest wind manufacturers.

But more importantly, they also helped the embryonic wind industry to challenge the dominance of coal because domestic manufacturers were able to secure buyers for their more cheaply produced turbines. Along with feed-in tariffs and other forms of policy support, this helps to explain why the wind sector is now growing faster than the coal sector – exactly what the world needs to reduce carbon emissions.

Chinese officials have yet to comment on the ending of those subsidies, but they may feel they are no longer needed because the incubating job is done ….

(This is the view taken by Shi Pengfei, vice-president of the China Wind Energy Association: “It is understandable that the Chinese government is ending subsidies to an industry that is strong enough to compete with international players.”)

… If needed, Mandarins will undoubtedly find other ways to support an industry that the government has identified as vital to the nation’s core interests.

In short, renewables, nuclear and hydropower simply have more political backing in China. In the United States, by contrast, the fossil fuel lobby is so dominant that President Barack Obama is still struggling to end state subsidies for oil and coal.

China Guodian, Asia’s largest wind power operator, appears undaunted, announcing plans to build a new wind farm and manufacturing plant in South Africa:

“We can see there are numerous new opportunities for development of co-operation partnerships between us. In our international strategic plan we have attached great importance to SA,” said Li Ren, Vice-Manager of the International Co-operation Department for China Guodian. As to timelines, he said the development was expected to happen ‘soon’.