Insights — August 06, 2018
China, rise of a cleantech giant
When it comes to environmental protection, China triggers mixed reactions. As the world’s largest polluter, China emits more than a quarter of the world’s global carbon emissions, which is more than the US and Europe combined. This is essentially due to their considerable use of dirty fossil fuels, such as coal. However, the government is putting tremendous efforts into cleaning their economic growth. China’s shift to a cleaner economy is being mainly driven by drastic environmental policies and a rapidly surging cleantech scene.
The rising cleantech scene
An increasing number of startup hubs and incubators are sprouting up across Chinese cities. Our team was warmly welcomed by Impact Hub Shanghai and Feiy, two organisation fostering high impact and sustainable entrepreneurship. At an evening event hosted at the Impact Hub coworking space, Willem and Jonathan presented the Solar Impulse history and story, from the Solar airplane to the 1000 Solutions. The story seemed to inspire and capture the younger generation of Chinese who have witnessed environmental degradation first hand.
“I grew up next to a river in Lanzhou. When I was a kid, I use to swim there all the time. Nowadays, the water is so polluted, it has become dangerous to even touch it” according to Mr Huang Zhengjie who welcomed our team at Ktech, a Shanghai based business incubator. Water pollution is indeed a massive issue in China, reports show. According to a recent New York Times article, “More than 80 percent of the water from underground wells used by farms, factories and households across the heavily populated plains of China is unfit for drinking or bathing because of contamination from industry and farming”.
But water pollution is just one out of a plethora of environmental issues China is facing, including air pollution, deforestation, the endangerment of species, soil contamination.
Destruction of the natural environment have prompted the Chinese people and its government to take action. We found that in China, a lot of innovation is policy driven, as the government sets tough and immediate new regulations to drastically reduce local pollution. China’s focus on environmental protection in the most recent 5 year plan is a clear indication of that. This is very much inverse to the European model, where grassroot innovation leads the way and policy change is slow to follow. Yet, in a country known for its appetite for new technologies and innovation, we also witness a growing albeit fledgling bottom up cleantech scene. The increasing number of cleantech startup incubators, accelerators, and coworking spaces is a testimony to that. Shanghai’s Tongji University alone operates nine different platforms from startup nurseries to acceleration programmes. “But a lot of innovation still comes from abroad” says Xuan Ling, Secretary General at the Bluetech Clean Air Alliance, whose mission it is to make the skies of China blue again. “We operate an awards and implementation programme for solutions from many countries, including China, and have so far received applications from 16 countries”.
In order to embrace the transition towards a clean economy, the most promising innovations are being tested and piloted across the country. This is the case on the Chongming ecological island just north of Shanghai, where the Shanghai International Green Innovation Centre will test some of the 1000 Solar Impulse labeled solutions. As our team delivered a speech in Chinese at the opening ceremony of SNEC, the largest photovoltaic fair in the world, they signed a memorandum of understanding with the innovation centre sealing our collaboration.
Our team also had the opportunity to meet with Mao Daqing, the founder of UCommune, the largest chain of coworking spaces in China. Since its launch three years ago, the Beijing-based company has become the biggest flexible office provider in China. It has more than 140 locations and is valued at $1.7 billion and has over 7,000 members. While it doesn’t focus solely on cleantech, the leading coworking company in China has put a strong focus on hosting sustainable innovators, and has agreed to join our #1000solutions challenge by helping us identify cleantech solutions.
The rise of the cleantech ecosystem in China is driven in particular by strong investment flows into the sector. According to a whitepaper from Tsing Capital, a leading Chinese sustainability investment firm, “In 2015, total investment in clean energy reached $101.2 billion. China has strategically planned for the deployment of clean energy and electric vehicles. From 2015 to 2020, new investment in renewable energy will reach RMB 2.3 trillion. Furthermore, China will invest $368 billion in ultra-high voltage grids, smart grids and distribution grids in the next 5 years; this is necessary infrastructure for dealing with power generation from solar/wind energy. By 2020, China plans to increase electric vehicle sales to 5 million, a tenfold increase compared to 2015. The increased amounts of investments in sustainable technology areas have greatly increased China’s competitiveness in the low carbon market, and it could soon overtake the European Union.”
Investments and startup support infrastructures have been decisive in making the country a leader in clean technologies. In the latest Clean200 list, launched by As You Sow and Corporate Knights, Chinese firms top the list of 200 green energy and technology companies across a range of sectors, including biofuels and battery storage.
Now a question remains: how can all these Chinese cleantech companies enter western markets and reach mass adoption? The strong language barrier and huge internal demand make it more difficult for Chinese companies to expand in Western markets. And this is exactly where the Solar Impulse Foundation and its World Alliance for Efficient Solutions comes in. We aim at bringing business opportunities to startups which have great technologies but lack the visibility to fully unlock their potential. By opening up our network to the world, we want to simplify the implementation of clean technologies, including Chinese solutions.