To Conquer Wind Power, China Writes the Rules

For China, it's not enough that foreign firms set up factories, introducing Chinese workers to new industries. China imposes strict local-content requirements, directing firms to local suppliers. Those Chinese suppliers, aided by free land and low-cost loans, eventually transform into fierce competitors, explains Keith Bradshser, reporting for the New York Times about manufacture of wind turbines. One consequence: Spain's Gamesa went from controlling 33 percent of the wind turbine market in 2005 to 3 percent today. Though excessive local-content requirements violate World Trade Organization rules, the companies typically do not complain. Their market share may decline, but even a sliver of China's market represents immense growth for the foreign firms. Turbines follow patterns in the computer and solar-panel industries as China strives to dominate manufacturing by acquiring technology from foreign investors. China looks to set up wind farms in the US and elsewhere. But countries like the US, with high unemployment rates, expect wavering support for alternative energy if investments boost jobs in China. – YaleGlobal