The West Could Learn Valuable Lessons from China’s Green Energy Rise

China has turned its massive manufacturing might toward clean energy over the past decade, and the results have been impressive. The east Asian nation produces nearly all the photovoltaic solar panels on the globe, produces the cheapest battery electric cars, and has installed more green-energy infrastructure than any other nation on the globe.

Despite the historic tension between the West and China, Western nations could learn a lot from China’s rise in the renewable-energy space. While China has spent at least a decade and invested considerable funds toward developing its green industries, the West is largely playing catch up and is almost fully reliant on Chinese companies in the renewables supply chain.

One of the key takeaways from China’s meteoric rise in the green-energy field is the importance of favorable industrial policy. Beijing used policies to create a long-term road map that allowed the country to master the complexities of clean technology and localize its production within China. Strict state planning and strategizing helped to implement this plan at both local and national levels, allowing China to ultimately dominate the world’s burgeoning clean-energy industry.

Subsidies helped to incentivize investment in green infrastructure, such as wind and solar plants. Ironically, China adopted its renewable subsidy program from similar programs used in the West, such as the feed-in tariff for solar farms and wind plants. Wind infrastructure in the country was also subsidized by the United Nations Clean Development Mechanism (CDM) while both the wind and solar segments depended on CDM and feed-in subsidies to scale up.

Domestic content requirements ensured that local companies benefited the most from the CDM subsidies, while the feed-in subsidies were rarely issued to foreign equipment providers or project developers.

Disbursement of subsidies in the EV and EV battery space was even more intentional as it was tied to domestically manufactured batteries and required manufacturers to master control systems, motors and batteries, the key technologies involved in EV production. These subsidies were only ever issued to Chinese companies.

Beijing also leveraged industrial policy to boost innovation and entrepreneurship in the renewables segment and often partnered with local governments to develop strategic green-energy-related interests. This allowed China to create regional manufacturing hubs for EV batteries and solar panels and monopolize both items’ global supply chains.

Furthermore, EV pilot programs limited the adoption of copycat development procedures in different regions to eliminate duplication, safeguard the quality of products and minimize waste.

Rather than leave publicly traded entities such as FuelPositive Corp. (TSX.V: NHHH) (OTCQB: NHHHF) to play a leading role in growing the clean-energy space, governments need to take deliberate steps aimed at propelling the industry forward so that the private sector complements these efforts. China has done it; the West can do it too.

NOTE TO INVESTORS: The latest news and updates relating to FuelPositive Corp. (TSX.V: NHHH) (OTCQB: NHHHF) are available in the company’s newsroom at https://ibn.fm/NHHHF

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