Tilting at windmills (and solar panel makers)
New York Times columnist Nicholas Kristof has written that the US tends to perceive China as “either the economic juggernaut overcoming poverty and investing brilliantly in alternative energy, or the Darth Vader that tortures dissidents.” It’s true that reading about China from the US is a bit like peeping through many pairs of other people’s glasses. To the credit of our fellow American observers, however, the country does tend to be a nation of extremes. The lovely, chaotic jumble that is China naturally lends itself to drama (though this continues to elude state media, who also struggle quite a bit with irony).
This week in China was proof that not even the smuggy-pants clean energy industry can escape from the Manichaean lens. Yes, tree-huggers everywhere fawn over Beijing’s dedication to clean energy, and with good reason: The country has gone from making almost no solar cells one decade ago to producing nearly half of global supply today, and its wind industry, which announced several big contracts this week, is almost as impressive. But yet China is also famous for crazy-bad pollution that wrecks havoc on the earth and its humans, causing untold defects and early deaths. Outrage over environmental abuses boiled over this weekend, as hundreds of people in eastern Zhejiang province protested and even overturned cars after pollution from a local solar panel factory leaked into river. The perpetrator was JinkoSolar, a company that CER interviewed in August (at the time their chairman reminded us more of the Lorax than the bad dude from Avatar). JinkoSolar later apologized for the spill – as well as smashing the cameras of some local reporters who were covering the protests – but acknowledged that the damage had already been done. Said company spokesman Jing Zhaohua: “We cannot shirk responsibility for the legal consequences which have come from management slips.”
Boeing comes a courtin’
If the reform and opening movement benefited any American company, it benefited Boeing most. The rollicking and chaotic growth of China’s commercial airline industries under Deng Xiaoping saw nearly every province – nay, every large city – launch its own airlines and start buying planes. Even better for Boeing, they bought foreign planes. Cognizant, perhaps, of the fact that it is nearly impossible to cover up an airplane crash, Chinese politicians resolutely ignored the rickety offerings of the Aviation Industry Corporation (aka AVIC, and its bureaucratic sequels AVIC I and AVIC II), in favor of foreign craft.
Boeing did best out of this, especially given its willingness to outsource the least technologically significant portions of its airplane production supply chain (doors, wing fairings, no-smoking signs) to China. But today Boeing’s domination of the market (50%+) is looking a bit wobbly. After a strong start selling some new 787 Dreamliner jumbo jets (60 of them!) to mainland airlines back in 2005, sales have stagnated – well, actually ground to a complete halt – since Boeing starting experiencing repetitive and extended production delays. As of today, some Dreamliner deliveries are three years overdue. Suddenly Boeing, key link in one of the few remaining US industries that runs massive trade surplus with China, is at risk of being overtaken by a bunch of continental-type plane stylists.
So, China, how ‘bout some more massive airplanes? Boeing officials are making some very optimistic noises in the press about how they are just on the cusp of signing a whole bunch of deals with Chinese airlines maybe probably, which Boeing projects will need to buy 5,000 planes worth US$600 billion over the next 20 years just to keep up with international route growth. Boeing would very much like most of those to be Dreamliners, and so it also took the trouble to extend a contract for horizontal stabilizers with COMAC, the semi-corporatized bastard child of AVIC I and AVIC II. Not that there’s quid-pro-quo or anything. The company also took the trouble to get some reach-for-the-barfbag headlines like “Boeing designs aircraft with China in mind” into the press. It remains to be seen whether such blatant pandering will pay off for Boeing – but then again, why wouldn’t it?