China’s President Xi Jinping’s Travels Highlight Numerous Cleantech Ventures, Opportunities

September and October were busy months for China’s President Xi Jinping. In addition to racking up travel miles for state visits to both the United States and the United Kingdom, Xi signed off on major international joint statements and investment deals during his time abroad.

Many of these announcements connect China’s two primary goals: achieving a greener China and having a major international financial presence, with China both investing abroad and welcoming foreign investment.

All in all, China represents a number of potential business opportunities for clean tech companies, both foreign and domestic. Its moves also could set the tone for other countries to take similar steps toward reducing greenhouse gas emissions and increasing the use of sustainable and clean technologies overall.

In this special China focus, we look at three of the major clean technology sectors that were a focus of Xi’s travels: green transportation, renewable energy, and green building construction. And we profile a Beijing-based air quality company that’s expanding its product line and its geographic reach.

Green Transportation

Buses & Trains in China

Just prior to Xi’s arrival to the USA, Los Angeles hosted the Low Carbon/Smart Cities conference, during which tradesmen met with government officials and NGOs from China and the US to share green development plans and announce low carbon international partnerships (read more on C40).  Low- and no-emission vehicles were of great interest. One project in particular was Guangzhou, the Chinese city that, through a pilot project, is leading the charge for green transportation through car regulations and through new public buses that the city unveiled on Oct. 15 (read more on the Nanfang).

Other so-called Tier 1 cities across China are planning their own green tranportation programs. For example, CleanTechIQ reported on China’s goal to have 200,000 “new energy” public buses, and 100,000 “new energy” taxis, across China by 2020  (read more on CleanTechIQ).

While those projects largely concern public sector transport, they also support the joint statement about truck fuel efficiency that Xi and President Obama made at the White House in September. This is an important concern as Beijing’s pollution can be greatly affected by emissions of heavy trucks, and the accuracy of emission testers is largely untrusted (read more on Global Environmental Institute).

Additionally, rail travel in China will go even greener through a new US technology partner. In August, San Diego-based ultracapacitor manufacturer Maxwell Technologies signed a 3-5 year partnership with CRRC’s Qingdao Sifang Rolling Stock Research Institute for the joint development of energy storage technology (read more on Railway Gazette). Another firm to watch is Ioxus, the ultracapacitor manufacturer which opened a Shanghai office a year ago and in April 2014 raised $21 million in venture capital funding (read more on CleanTechIQ).

Taxis and Cars in the UK

Green transportation also was a focus of Xi’s UK visit. On Oct. 21, Chinese automaker Geely, which owns taxi manufacturer London Taxi Company (LTC), announced plans for a TX5 electric hybrid model of London’s iconic black cab, through a GBP 50 million investment. As an electric hybrid, the TX5 will run for about 30 miles entirely on battery power. The cabs are expected to be available before 2018, the year by which London Mayor Boris Johnson said all new London cabs would be Zero-Emissions Capable (ZEC). While Geely owns LTC, Nissan, Mercedes, Frazer-Nash and Karsan have also said they are developing ZEC black cabs (read more on CNBC) (read more on BBC).

As well, the British luxury brand Aston-Martin announced plans with China Equity to develop a low emissions vehicle. Aston Martin is signing a deal with the Chinese private equity investment firm totaling about GBP 50 million, according to Reuters (read more on Reuters).

What it means

Developments like these indicate that three key sectors of the vehicle market — public transportation, construction and luxury — are actively involved in low emission vehicle R&D. Yet the common consumer remains a market with untapped potential, and one with perhaps more potential in China than abroad. In the UK, consumers bought nearly 12,000 electric hybrid vehicles in the first five months of 2015, four times the number sold a year earlier (read more on This is Money). In China, electric cars are still largely off the consumer market, despite government continuing to show support for electric hybrid models: in early 2015, an electric-car charging route from Beijing to Shanghai was debuted (read more on FT).

And Tesla Motor’s recent numbers indicate the slight but growing popularity of electric vehicles among Chinese consumers, as the electric car maker posted its best quarter yet in China for the third quarter. The numbers remain tiny — Tesla sold 797 cars in the first quarter, 883 in the second and 1345 in the third — but indicate a lot of potential in a market as big as China’s (read more on Bloomberg).

Given the emphasis on transportation, opportunities for investment with this sector could include R&D on electric charging infrastructure and energy storage technology. Also, given the ongoing Volkswagen emissions scandal and a lack of Chinese standards, efficiency-testing equipment is also very much needed (read more on Bloomberg).

Solar & Nuclear

Apple announced in mid-October that its investment in solar energy for its Chinese manufacturing partners would continue to spread throughout China (read more on TechCrunch) (read more on Fortune). This project is said to be unique in its expanse and its relatively unprecedented attention to supply chain management. While solar isn’t a perfect solution quite yet (read more on National Geographic), the announcement demonstrates a new focus on sustainability among foreign companies in China. Some experts think that corporate social responsibility activities have a ways to go before they extend to domestic companies, but are hopeful that foreign firms might lead the way.

What it means

We’re likely to see continued R&D and increased distribution of solar across the world, particularly throughout China. Two of the top clean solar energy manufacturers ranked by SolarScorecard were Chinese: Trina was ranked first and Yingli was ranked third. On the other hand, given Chinese firm’s reluctance to join CSR efforts, it might be worth while to monitor China-conscious foreign brands. Apple, for instance invested with the US-based SunPower for their solar project (read more on CleanTechIQ).

Also Nuclear…

In addition to improving and increasing the use of solar energy, China’s focus on utilizing other alternative energy has increased. In fact, also during Xi’s UK visit, China made waves by announcing investments into several British nuclear plants (read more on FT). The specific announcement was that Chinese state-owned enterprise CGN is taking a 33.5% stake in the UK’s plan to develop 3 nuclear stations with French EDF, which has a 50% stake. Other investors will be allowed in at a later time. The deal is somewhat controversial but there seems to be a large potential for investment. In fact, at least four other potential future plants were mentioned in the news release and analysts cite the huge employment boost from the new plants.

And a quick note about natural gas

While China’s concerns of natural gas are rough waters, pun intended considering China’s recent gas discovery in the South China Sea by the China National Offshore Oil Corp, it will be important to keep an eye on this trend; especially considering the drafting of the 13th 5th year plan. In fact, in the 12th 5-Year Plan, China set a target to double natural gas as a primary energy source to 8.3% by 2015.

Green Buildings

In addition to China’s overall peak carbon goal, Xi announced that by 2020, 50% of all new construction would be “green.” For developers, this means great opportunities for new technology, talent and business opportunities. For auditors, this also generates increased need for monitoring equipment and talent (read more on Sustainable Cities Collective). Meanwhile, the questions about the “green” qualification and how this might apply to existing construction, if at all, remain largely unanswered.

What it means

For China, green construction is not just a way to improve on the specific sector but also a way to counteract the nation’s pollution problem. China’s indoor heating has traditionally relied mainly on coal, causing a huge spike in pollution during the winter months (read more on Paulson Institute). Alternative methods of indoor heating or any enduring solutions (such as power grids, floor heating, solar, and energy efficient construction) are still in the testing stages. However, the looming Jing-Jin-Ji project, which involves building a megacity out of the existing metropolises of Beijing, Tianjin and Hebei, presents ample opportunity for new construction projects.

CleanTechIQ covered the opportunity for green building in our analysis of the huge increase in space available for green construction projects. In fact, there is more than 154 times the amount of such space in China now than in 2008, when the country’s first green initiative began (read more on CleanTechIQ). And the next few years are likely to experience even a larger increase as more real estate is used. Stefan Heck, a professor at Stanford University and a former McKinsey & Co. partner, says China plans to build the equivalent of 100 cities the size of New York City over the next 10 years (read more on CleanTechIQ).

Among other air-related environmental efforts, China is setting up what is likely to be the world’s largest carbon trading market when it launches in 2017, and has also launched what it calls a “War on Pollution.” Weapons the country is using in this war include larger fines against polluters and prohibiting new coal power plants in certain areas.

And China is also sharpening its focus on “low carbon” sectors; in addition to green buildings, areas of interest include energy efficiency, water, waste and transportation. The country detailed its plans in a report, “Enhanced Actions on Climate Change,” that it submitted to the UN on June 30.

Highlight China Start-up: Origins China

Originally a pet project of a young husband concerned about the health of his asthmatic wife on their move to China, Origins continues to grow and expand its product base. The company began with a home air-filter, developed and marketed as one that works just as well as expensive models but for a faction of the price. The company has recently picked up the pace and broken out of the ‘budget air filter’ sector with a sophisticated, unique but still conservatively priced product called the Laser Egg. The Laser Egg is an indoor air-quality monitoring device that links to smart devices through its own app. Besides monitoring, the app also can conduct data and time analysis of air quality trends in your home or office. Ideally, the Egg equips individuals with knowledge about their home or work environments.

Origins is also making partnerships with local Beijing businesses, like restaurants and bars, which will use Origins products and then tout the clean quality of their environment.  The company is also launching its own spaces in Beijing. Its “Breathing Space,” for example, hosts free community events focused on cultivating a healthy lifestyle within air purified through Origins technology. Recent events have include yoga classes, healthy food dinners and lectures

Originally offered solely in Beijing, the Laser Egg is expanding to Shanghai; Origins also has an outdoor air quality monitor in development.

Tags: Policy

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