The Vine

China Journal: Where The Green Jobs Are

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Xi'an, ChinaIn the United States, climate-policy advocates often hold up China as a boogeyman of sorts. Last fall, Jeffrey Immelt and John Doerr penned a Washington Post op-ed lamenting the fact that the United States is "clearly not in the lead today" on clean energy. "That position is held by China." Tom Friedman has gone even further, making analogies to America's space race with the USSR. Unless we put a price on carbon and start boosting alternative energy, the thinking goes, China's going to stake out a commanding lead in this exciting new industryand we'll be left with nothing.

I was re-reading some of these pieces today before going to visit a research lab in Xi'an run by Applied Materials, a Silicon Valley-based company that designs the equipment used to make solar cells. One response to the Friedmans and Immelts of the world is to say that China's rise doesn't have to be bad for the West. For one, everyone will benefit from clean-tech innovation, no matter who's doing it. But second, it's also possible to imagine a division of labor for clean energythe United States does much of the advanced research and innovation while China handles the low-cost manufacturing. Yet here was a U.S. company opening a high-tech lab in China. What gives?

Naturally, it's complicated. The U.S. wing of Applied Materials still does a lot of the cutting-edge research into ways to drive down the cost of making solar cells (the company has plenty of experience in designing processes to create semiconductors and LCDswhich resemble silicon photovoltaic and thin-film solar cells, and which have both tumbled dramatically in price over the years). But, because so many big solar manufacturers are located in Chinafour of the world's ten largest, in factthe company needs a research lab here, so that it can stay in close contact with panel-makers and constantly figure out ways to tweak the production process. (And, when we talk about innovation, this sort of incessant tweaking is often more crucial than big Nobel-worthy scientific breakthroughs.)

I asked Gang Zou, the general manager of the Xi'an site who had previously worked in Silicon Valley, whether more R&D labs like this one might pop up in the United States if the latter had more solar customers. Almost certainly, he replied. But, since U.S. policies to promote renewables are so haphazard, the market was too tough to predict. "Right now, our main customer base is in Asia," he said. "China's more predictable. The government declares new renewable energy goals and we know it'll happen." And, as more and more manufacturers set up in Asia, Zou predicts that more and more cutting-edge R&D will followespecially as China churns out more skilled workers. (Xi'an already produces a whopping 200,000 graduates per year, though, Zou notes, there are still too many 25-year-old PhDs and too few experienced engineers.) It's a good reminder that in the clean-energy field, China's not just cornering the cheap-widget-making market.

Meanwhile the budding solar craze in China is really quite impressive. Zou argues that, the way the market's expanding, solar cells will be competitive with fossil fuels by 2014 or 2015since, as a rule, costs tend to drop 20 percent every time production doubles. That seems wildly optimistic to me, but it's undeniable that the country's making a huge push that goes well beyond a few tax credits for rooftop panels. Beijing has designated the northwest regions as ripe for huge utility-scale solar farmsZou anticipates that a one gigawatt solar plant (i.e., a massive one the size of a couple small nuclear reactors) will be built in China in the next few years. Elsewhere, several cities have pilot projects to slap thin-film cells on the walls of buildings, to soak up sun during the day. Granted, solar's still a tiny part of the global energy market, and it's still quite pricey, but if the industry's going to take off anywhere, China's not a bad bet.

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