Reading: In the face of China's growing new energy industry, the United States and other Western developed countries, while experiencing competitive pressures, have also forgotten to pick up the bones in their eggs, and have made sufficient arguments for China's policy of independently developing new industries. The "New York Times" report is an example that deserves our attention.
1 Changes in Gemei Beauty
Like other foreign companies, Spain’s Gemein Company has learned through hardships that entering China’s lucrative market means imposing strict rules that China sets according to its own interests.
As a veteran machinery company in Europe, Gemma entered the turbine industry as early as 1994, and its production of wind turbines was installed throughout the world. In 2010, Gemeyi became the world’s third largest turbine manufacturer with sales of US$4.4 billion, second only to Vestas Denmark and GE.
Ten years ago, when China started to purchase a huge number of imported wind turbines to use clean energy, Gomez was the early lucky winner of this market because of the relatively low labor force in Spain. Gome was earlier and aggressively expanded its sales and set up an organization in China. By 2005, its market share had reached 35%. However, the Chinese government began to allocate funds for the purchase of equipment for state-owned wind farms. At the same time, the localization requirement for turbines is increasing. The sporadic demands instantly became overwhelming. In April 2005, the National Development and Reform Commission of China stipulated that at least 70% of the equipment purchased by wind power plants should be domestically produced. Its Document No. 1204 stipulates: "The localization rate of wind power equipment must reach 70% or more, and wind farms that do not meet the requirements for equipment localization rate are not allowed to build."
According to WTO regulations, any act of setting the proportion of local equipment is a violation of the WTO rules, not to mention such a high rate of equipment localization. However, the Chinese government seems to believe that multinational companies do not dare to risk losing the prosperity of China's wind power market.
Sure enough, Gamesa and other major multinational wind turbine manufacturers ultimately did not choose to fight. Instead, they chose to open factories in China and help train local workers to reach the 70% threshold. George Cafferty, chairman and chief executive of Gomez, said that with or without a localization rate policy, Gomez will set up a factory in China at some stage. George Cafferty said: "If we don't do this, it's natural that someone will do it. If you want to enter a country, you must take responsibility for this country."
But now, overnight local producers have seized 85% of the market for wind turbines, enjoying low-interest loans and cheap land from the government, and enjoying preferential contract conditions for state-owned power companies that want to purchase equipment. Songmei's market share is currently only 3%. With the government’s care, Chinese companies have flourished and currently control nearly half of the global $45 billion market. The largest of these are aiming at overseas markets, especially the United States, where long-term leaders such as General Electric have emerged.
2 Differentiation of Native Made
There is a difference between the establishment of an assembly line at a local company and the placement of important parts in the country. The former is exactly the practice of Gemming and other European wind turbine companies in the United States.
In the United States, there is no localization rate, and the proportion of U.S. parts used in the wind turbine industry averages 50%. In the United States business operations, Google's dependence on US suppliers is less, but it still imports some accessories, including key gearboxes, from Spain.
In the weeks following China’s release of Document No. 1204, Gemei Tang sent dozens of Spanish engineers to Tianjin. These engineers not only oversee the construction of the assembly plant, but also distribute it to local Chinese companies, teach them how to conduct batch forging of steel, and how to manufacture a series of complex electronic control institutions.
One of the Chinese suppliers is skilled in manufacturing a 10-ton steel frame for wind turbine gearboxes and generators. Its equipment can even be used under strong wind conditions, and the cost is low. Even Spanish companies cross it half way through China. The earth was shipped to Gemeike at an assembly plant in Fairless Hills, Pa., for the assembly of wind turbines. Mr. Carvert said that the manufacturing industry in the United States has been greatly weakened in recent decades, and some parts are hard to find in American machinery companies.
It was not until the summer of 2009 that the senior officials of the Obama administration began to examine the obstacles to the clean energy exports of the United States. The U.S. government only exerted pressure on China under Document No. 1204. The Chinese government cancelled the rule two months later. But at that time, Chinese companies did not need policy protection. The localization rate of accessories used by some of GEMEGA's fans has exceeded 95%.
Steve Sawyer, secretary-general of the Global Wind Energy Council, said that the goal of China's localization requirements has been reached, even beyond expectations.
3觊觎Overseas Market
When China joined the WTO in 2001, it agreed to abide by its trade rules. However, for its own wind power industry policy, it argues that its behavior is within the scope of fair competition. Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission, defended the localization rate policy. He said: “This is localization support. China is a developing country and developing countries need to do everything they can to promote industrialization.â€
The Obama administration has a different view. Its survey on whether China’s new energy policy violates WTO rules includes localization rates. The survey was promoted by the U.S. Steel Workers Federation. However, Zhang Guobao, former director of the National Energy Administration of China, retorted that the US quoted the localization rate rule in his investigation was wrong, because China has already abolished this rule.
In fact, since state-owned wind farms are major buyers of wind power equipment, China has many policies that can be used to protect their dominant position and limit the market opportunities for foreign companies that wish to develop wind farms. Among the many international turbine manufacturers, it is increasingly difficult to share a small piece of China's development cake.
The Chinese government is now slowing down the approval of domestic wind farms. It intends to allow the domestic power system to digest the thousands of new wind turbines. Although they have been built, they are not yet connected to the national grid. This policy also means that after being supported by a company such as Gemexuan, Chinese turbine manufacturers must look beyond the domestic market that is restricted by the government to gain more long-term development. The Chinese government is intending to use it. The wind energy industry has become a global industry leader, helping manufacturers coordinate export strategies and provide a variety of technical support.
China's largest wind turbine manufacturer Huarui Wind Power said that they hope to become the world's No. 1 in 2015. Han Junliang, chairman and president of the company, bluntly stated that his goal is to make half of the sales of turbines at home and abroad. Sinovel Wind Power is currently setting up sales offices throughout the United States and is preparing to increase its export offensive next year. This summer, they received huge financial support from China’s state-owned banks for more than US$13 billion in low-interest loans. Another tens of billions of billions are being raised in New York and Hong Kong by IPOs such as Morgan Stanley.
The alarm bell of multinational corporations has already sounded. Vestas, for example, is closing four factories in Denmark and one in Sweden. It dismissed 1/8 of its 24,000 workers this fall in an effort to bring its costs closer to Asian levels.
1 Changes in Gemei Beauty
Like other foreign companies, Spain’s Gemein Company has learned through hardships that entering China’s lucrative market means imposing strict rules that China sets according to its own interests.
As a veteran machinery company in Europe, Gemma entered the turbine industry as early as 1994, and its production of wind turbines was installed throughout the world. In 2010, Gemeyi became the world’s third largest turbine manufacturer with sales of US$4.4 billion, second only to Vestas Denmark and GE.
Ten years ago, when China started to purchase a huge number of imported wind turbines to use clean energy, Gomez was the early lucky winner of this market because of the relatively low labor force in Spain. Gome was earlier and aggressively expanded its sales and set up an organization in China. By 2005, its market share had reached 35%. However, the Chinese government began to allocate funds for the purchase of equipment for state-owned wind farms. At the same time, the localization requirement for turbines is increasing. The sporadic demands instantly became overwhelming. In April 2005, the National Development and Reform Commission of China stipulated that at least 70% of the equipment purchased by wind power plants should be domestically produced. Its Document No. 1204 stipulates: "The localization rate of wind power equipment must reach 70% or more, and wind farms that do not meet the requirements for equipment localization rate are not allowed to build."
According to WTO regulations, any act of setting the proportion of local equipment is a violation of the WTO rules, not to mention such a high rate of equipment localization. However, the Chinese government seems to believe that multinational companies do not dare to risk losing the prosperity of China's wind power market.
Sure enough, Gamesa and other major multinational wind turbine manufacturers ultimately did not choose to fight. Instead, they chose to open factories in China and help train local workers to reach the 70% threshold. George Cafferty, chairman and chief executive of Gomez, said that with or without a localization rate policy, Gomez will set up a factory in China at some stage. George Cafferty said: "If we don't do this, it's natural that someone will do it. If you want to enter a country, you must take responsibility for this country."
But now, overnight local producers have seized 85% of the market for wind turbines, enjoying low-interest loans and cheap land from the government, and enjoying preferential contract conditions for state-owned power companies that want to purchase equipment. Songmei's market share is currently only 3%. With the government’s care, Chinese companies have flourished and currently control nearly half of the global $45 billion market. The largest of these are aiming at overseas markets, especially the United States, where long-term leaders such as General Electric have emerged.
2 Differentiation of Native Made
There is a difference between the establishment of an assembly line at a local company and the placement of important parts in the country. The former is exactly the practice of Gemming and other European wind turbine companies in the United States.
In the United States, there is no localization rate, and the proportion of U.S. parts used in the wind turbine industry averages 50%. In the United States business operations, Google's dependence on US suppliers is less, but it still imports some accessories, including key gearboxes, from Spain.
In the weeks following China’s release of Document No. 1204, Gemei Tang sent dozens of Spanish engineers to Tianjin. These engineers not only oversee the construction of the assembly plant, but also distribute it to local Chinese companies, teach them how to conduct batch forging of steel, and how to manufacture a series of complex electronic control institutions.
One of the Chinese suppliers is skilled in manufacturing a 10-ton steel frame for wind turbine gearboxes and generators. Its equipment can even be used under strong wind conditions, and the cost is low. Even Spanish companies cross it half way through China. The earth was shipped to Gemeike at an assembly plant in Fairless Hills, Pa., for the assembly of wind turbines. Mr. Carvert said that the manufacturing industry in the United States has been greatly weakened in recent decades, and some parts are hard to find in American machinery companies.
It was not until the summer of 2009 that the senior officials of the Obama administration began to examine the obstacles to the clean energy exports of the United States. The U.S. government only exerted pressure on China under Document No. 1204. The Chinese government cancelled the rule two months later. But at that time, Chinese companies did not need policy protection. The localization rate of accessories used by some of GEMEGA's fans has exceeded 95%.
Steve Sawyer, secretary-general of the Global Wind Energy Council, said that the goal of China's localization requirements has been reached, even beyond expectations.
3觊觎Overseas Market
When China joined the WTO in 2001, it agreed to abide by its trade rules. However, for its own wind power industry policy, it argues that its behavior is within the scope of fair competition. Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission, defended the localization rate policy. He said: “This is localization support. China is a developing country and developing countries need to do everything they can to promote industrialization.â€
The Obama administration has a different view. Its survey on whether China’s new energy policy violates WTO rules includes localization rates. The survey was promoted by the U.S. Steel Workers Federation. However, Zhang Guobao, former director of the National Energy Administration of China, retorted that the US quoted the localization rate rule in his investigation was wrong, because China has already abolished this rule.
In fact, since state-owned wind farms are major buyers of wind power equipment, China has many policies that can be used to protect their dominant position and limit the market opportunities for foreign companies that wish to develop wind farms. Among the many international turbine manufacturers, it is increasingly difficult to share a small piece of China's development cake.
The Chinese government is now slowing down the approval of domestic wind farms. It intends to allow the domestic power system to digest the thousands of new wind turbines. Although they have been built, they are not yet connected to the national grid. This policy also means that after being supported by a company such as Gemexuan, Chinese turbine manufacturers must look beyond the domestic market that is restricted by the government to gain more long-term development. The Chinese government is intending to use it. The wind energy industry has become a global industry leader, helping manufacturers coordinate export strategies and provide a variety of technical support.
China's largest wind turbine manufacturer Huarui Wind Power said that they hope to become the world's No. 1 in 2015. Han Junliang, chairman and president of the company, bluntly stated that his goal is to make half of the sales of turbines at home and abroad. Sinovel Wind Power is currently setting up sales offices throughout the United States and is preparing to increase its export offensive next year. This summer, they received huge financial support from China’s state-owned banks for more than US$13 billion in low-interest loans. Another tens of billions of billions are being raised in New York and Hong Kong by IPOs such as Morgan Stanley.
The alarm bell of multinational corporations has already sounded. Vestas, for example, is closing four factories in Denmark and one in Sweden. It dismissed 1/8 of its 24,000 workers this fall in an effort to bring its costs closer to Asian levels.
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