“Let them die” – clean tech oversupply hampers innovation, according to US Senate testimony

China's cleantech leads the world

China’s cleantech leads the world

China has become the world leader in cleantech sales, overtaking the US and the EU as the number one clean tech manufacturing region in terms of absolute sales, according to a report commissioned by WWF.

Clean tech sales in China grew to EUR57 billion (US$69 billion) in 2010-2011, amounting almost 30% of global sales of EUR198 billion.

The closest competitor is the EU with sales of EUR 47 billion, while the US remains far behind both regions with just EUR37 billion in sales.

According to the report, China is successful not only because of its lower labor and capital costs, but also because of its stable government policies, strong applied R&D and well-developed supply chain.

However, China’s booming sales volume is viewed with suspicion by US trade protectionists. Derek Scissors, who testified before a US Senate committee hearing on Chinese trade issues, said: “What it means for the moment is China has turned to dumping at home, rather than overseas. They have too much capacity and their European buyers are drying up. As a result, some major firms are selling below cost to domestic buyers and running up debt. It’s hard to see this as maturation.”

According to Scissors, over supply could be a truly positive development if less efficient producers are allowed to fail. “But that would require Beijing to let them die, to seek innovation and efficiency first in clean energy rather than jobs first. That isn’t happening right now, nor is it imminent,” he said.

Reporting: Cadence Poon

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