China's green shift a boon to global economy

(Xinhua) Updated: 2012-10-31 11:04

Chirstensen said technology adoption and transfer would likely see Nordic firms work even more closely with Chinese partners to better understand and respond to the needs of China's green market.

"We definitely need China to succeed if the world is to succeed. Whatever China does will have global repercussions because a lot of the world's manufacturing is going on there," he said.

Challenges for green transition

It is always a challenge for a resource-dependent country like China to make a green transition because the process will require huge investments.

Christiansen, the Danfoss CEO, said China has very advanced infrastructure such as airports, trains and roads, but does not have high-quality and energy-efficient heating networks.

"Being able to finance, and put focus on heating infrastructure, to the same extent as other infrastructure, would be a very important step in making the transition work," he said.

Another thing is that too-low energy prices will make the transition slower because older technology would be used for a longer time.

"This challenge can be overcome, but it would mean that 'dirty' energy, or oil and gas based energy, are not subsidized, or even that there be taxes put on it, to push the transition," Christiansen said.

He also believed that China needs to change public behavior and make its population aware of the benefits of being more efficient with energy consumption.

At the same time, the Danish companies may face fierce competition from local players as well as the protection of intellectual property rights while marketing energy technologies in China.

Vestas, the world's biggest wind turbine manufacturer, shut down a factory in China's northern city of Hohhot in June to "phase out" the production of small kilowatt turbines because of projected low market demand.

The Danish wind giant also agreed to sell a tower factory in southern Denmark to Chinese tower maker Titan Wind Energy because the slumping global economy has led to cuts in wind farm investments.

However, Chiristina Boutrup, the author of "China Sweet and Sour", a book on Danish companies' experiences in China, said the firms still hold a competitive edge because they can meet China's increasingly tight environmental regulations.

At the same time, Christiansen said Danfoss has seen a few counterfeit products in China that misuse his company's name and brand.

An equipment company in Wenzhou in China's eastern Zhejiang province, last year was fined by a Chinese court 300,000 yuan ($47,000) for infringing on a Danfoss trademark.

"It is a problem for the green transition and for doing business in general," Christiansen said. "My feeling is that the situation is improving although it is still happening (in China)."

Despite the challenges and difficulties, the CEO believes that there is already a more stable market for green technologies in China as the country moves toward a green economy with environment-friendly macroeconomic policies.

"The (12th Five-Year) plan is very harmonious with our business. It will help further the implementation of some these green actions and enforce the goals," Christiansen said.