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Wednesday, September 09, 2009

RAND: Chinese Region Slated to be Emerging Technology Powerhouse

Originally posted at the Breakthrough Institute

A recent RAND Review provides a slew of recommendations to help China expand the Tianjin Binhai New Area (TBNA) and turn it into a driver of economic progress. As a result of an enormous stimulus package (second only to that of the U.S.) with significant allocations for "indigenous innovation" in science and technology, China may already be well on its way to taking those suggestions to heart, particularly in the clean energy sector.

Tianjin Binhai New Area (TBNA), located in China's Bohai Rim region, has been a strong center for modern industry and manufacturing. But in 2006, the Chinese government mandated that TBNA become the next "regional engine for economic growth." To that end, the area has been the beneficiary of significant government support aimed at making the area the country's next "economic powerhouse" and orienting it towards leadership in providing solutions to national problems: among them, rising energy demand.

According to RAND:

"The goal of TBNA is to present an alternative to the traditional industrial economy, offering China a model of sustainable development and eco-friendly industry. Innovation in science and technology lies at the core of this vision of economic and environmental development."

In the report, RAND offers TBNA guidance in its endeavor to meet China's growing technology needs, both domestically and internationally, by recommending that it pursue seven emerging technologies including cheap solar energy and electric-hybrid vehicles.

In terms of solar energy, in particular, China may already be well ahead of the learning curve. RAND believes TBNA should become the research, development, and manufacturing center of second and third generation solar technology with a short-term focus on the global export market and a long-term eye for its domestic market. China, however, is already the world's leading solar power manufacturer and its leading photovoltaic (PV) provider, Suntech, is on track to be the second largest provider in the world after America's First Solar. Furthermore, China has the largest solar manufacturing capacity in the world, responsible for about a third of global capacity. It is expected to lead the world in cell capacity in the coming years.

Just this week, the Chinese government inked a deal with First Solar to install a 2GW PV power plant, the world's largest, in the Mongolian Desert.

RAND also recommends that TBNA work to make these solar energy systems cheap and accessible to developing and undeveloped countries. Given the progress China has already made in the solar sector and the government support that TBNA is receiving, it is well-positioned to follow through on this crucially important suggestion.

Government support for TBNA is not occurring in isolation. Instead, it is just a part of a large-scale effort, backed by money from China's $586 billion (RMB4 trillion) stimulus plan, to strengthen its national science and technology programs by emphasizing "indigenous innovation."

As part of China's 15-year Medium- and Long-Term National Plan for Science and Technology Development (2006-2020), technological innovation is receiving $23 billion as a result of the stimulus package and clean energy innovation is a program priority. According to a Chinese Academy of Science report on the future of innovation in China:

"[A] new technological and industrial revolution centered on green energy, artificial intelligence, and sustainable development is most likely to take place in the next 10 to 20 years. China must prepare itself for the new revolution in order to build a well-off society and realise China's modernisation."

In the wake of an international economic crisis that has left developed nations like the U.S. struggling, China is thriving. And government support of innovation, as in the case of TBNA, is fueling China's success. As Denis Simon, a Pennsylvania State University professor and China expert notes:

"The Chinese are hoping to catch that [technological innovation] wave. That's part of their stimulus package thinking, that as the world comes out of this downturn, with it will come a whole wave of new innovations probably built around new energy, new materials. The Chinese want to make sure that they're at the forefront of this and aren't laggards."

On the clean energy front, China's clean energy investment plans, as well as its recent solar partnership with U.S. makes it out to be anything but a "laggard." Instead, China's ability to rebound from economic crisis by turning its stimulus funding into an innovation opportunity will not only position it to lead the clean energy race, but also prepare the way for China to become the world's next leader in scientific and technological innovation.

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