On March 15, Suntech Power Holdings Co., one of China’s largest solar photovoltaic (PV) manufacturers, failed to pay its US$541 million convertible debt, causing its stock price to bottom out. (See Figure 1.) Three days later, eight Chinese banks filed a petition asking for the company’s main operating subsidiary, Wuxi Suntech, to be declared insolvent and proceed to restructuring. With Wuxi Suntech owing the banks 7.1 billion RMB (US$1.14 billion), the company was forced to declare bankruptcy on March 20.

Figure 1: Stock price of Suntech Power Holdings Co. (Unit: USD) (Source: Google Finance)

There was discussion about whether the Chinese central government would rescue the former star of China’s solar sector, but the National Development and Reform Commission (NDRC), abiding with its new policies for renewable energy, said the government “wouldn’t and shouldn’t intervene.”

This put the municipal government of Wuxi, in China’s Jiangsu Province, in a dilemma. On the one hand, Suntech had become a model enterprise showcasing Wuxi’s sustainable development success; it would be extremely difficult for the local government to let it go. In 2012, a proposal from Suntech Power to shut down Wuxi Suntech had distressed the local government so much that the municipality made an effort to save the company, securing an additional 200 million RMB ($32.2 million) loan from the Bank of China.

But this time around, having lost the creditworthiness to receive strong support from state banks, government bailout options were limited. Wuxi Guolian Development Group, a financial company controlled by the municipal government, was expected to take over Wuxi Suntech. On March 20, a former senior executive of Guolian was assigned to be the new president of Suntech Power. This marked the official entry of local government into the restructuring process for the suffering Chinese solar company.

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China, finance, green economy, manufacturing, photovoltaics, renewable energy, solar industry, solar power, Suntech

Apple is accused of environmental damages in China

By Qiong Xie

Haibing Ma, China Program manager at the Worldwatch Institute, was interviewed by Voice of America on August 31st to discuss whether Apple, one of the most successful American IT companies, should be responsible for environmental pollution from its Chinese supply chain. Mr. Ma commented that even though Apple has completely outsourced its production to many factories in developing countries such as China, it still bears the responsibility to carefully choose its first and second tier suppliers to make sure all Apple components are manufactured in an environmentally friendly way.

Apple’s supply chain problem is only the latest example of an emerging environmental issue: the sustainability of globalized supply chains. The concept of sustainability has emerged as a popular word in the political, environmental and business fields, partially due to the report Our Common Future, which was presented during the World Commission on Environment and Development (WCED) in 1987. According to this report, sustainability is defined as “using resources to meet the need of the present without compromising the ability of the future generations to meet their own needs.” For the manufacturing sector, sustainability is more about using operational management, such as product design, process technology, and an environmental management system, to reduce negative environmental impacts to the greatest extent possible. In the era of globalization, supply chain management has become an indispensable part of operational management for companies with globalized business operations like Apple.

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apple, China, energy efficiency, GHG reduction, low-carbon, manufacturing, operational management, pollution, social responsibility, sustainable supply chain, Voice of America

By Haibing Ma and Jiajing Bi

China is the World's No.1 wind power

As China accelerates its shift to a green economy, it is becoming a frontrunner in the clean energy field. In 2009, the country overtook the United States to become the global leader in clean energy investment, and in 2010 this Chinese investment reached US$54.4 billion, dwarfing the $34 billion from the U.S. With such impressive finance and investment, it’s no wonder that China’s clean energy sector has been growing so rapidly. By the end of 2010, China had installed a total of 44.7 gigawatts (GW) of wind capacity, surpassing the United States to become the world’s biggest wind power market. And China has been the world’s largest solar photovoltaic (PV) producer since 2008, with an annual production capacity of 20 GW at the end of 2010.

Chinese manufacturers of clean energy equipment account for more than half of the global supply. Even more impressive is the pace of growth in renewable energy: as recently as 2005, only about 1 GW of wind power capacity was installed across China, and solar cell production was less than 500 megawatts (MW).

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China, clean energy, Climate Change, emission reduction, green economy, green jobs, manufacturing, renewables, solar, solar PV, sustainable development, wind, wind turbine

High-tech equipment, precision instruments, and miles of electrical wiring at the Siemens production facility in Krefeld, Germany, might fool you into thinking that what’s being manufactured here is an airplane, or perhaps even a space shuttle. But the roughly 2,000 employees are producing a high-speed train, the so-called Velaro D, which is to go into service in Germany at the end of 2011.

Siemens Pressebild, www.siemens.com/press/de/pressebilder/?press=/de/pressebilder/bilder-photonews/2010/pn201006/pn201006-06.htm.

At a length of 200 meters, an eight-wagon Velaro trainset seats about 450 people—comparable to some variants of the Boeing 747. The Velaro’s top speed of 400 kilometers per hour doesn’t match that of a long-range plane. But for distances of up to 650 kilometers, and perhaps even as far as 900 kilometers, high-speed trains can be a faster option than air travel, given that the latter involves trips to often remotely located airports, checking and retrieving luggage, cumbersome security measures, etc. Of course, ticket costs and other factors matter as well, but fast trains have drawn passengers away from air travel in a growing number of places, on routes including Tokyo-Osaka in Japan, or Madrid-Barcelona in Spain.

Another advantage of trains is their lower environmental impact. Siemens claims that the Velaro uses as little as 0.33 liters of gasoline-equivalent per seat per 100 kilometers. (That translates into a stunning 713 miles per gallon per seat.) The Velaro’s greenhouse gas emissions per passenger-kilometer would thus be 90 percent lower than those associated with typical air travel.

In growing numbers of countries, there is palpable excitement about high-speed trains, in line with an overall growth in rail investments. According to German consulting firm SCI Verkehr, worldwide operations and capital budgets for all types of rail (passenger and freight) amounted to a combined $590 billion in 2008. The annual market for rail-related goods and services worldwide runs to about $170 billion, up a fifth from 2006.  It is expected to reach $214 billion by 2016.

In 2009, high-speed rail lines totaling 10,700 kilometers were operational worldwide, including more than 2,000 kilometers in Japan—the pioneer in this field—and about 5,800 kilometers in the European Union. (In the EU, high-speed rail travel accounted for a quarter of all train travel, and rose to almost 100 billion passenger-kilometers in 2008; see Figure.) China is on track to build the longest network by far, planned to reach 25,000 kilometers. Relative to territory, Spain’s goal of 10,000 kilometers by 2020 is even more impressive. If China were to match Spain’s effort relative to land size, it would have to build 190,000 kilometers of lines; in proportion to population, it would have to be 290,000 kilometers.

More and more countries are jumping into the fray. Listed in order of their track-building ambitions between now and 2025, in addition to China and Spain they include France, Turkey, Japan, Germany, Poland, Portugal, Sweden, Italy, Morocco, Russia, Saudi Arabia, Brazil, India, Iran, and some others. The United States, too, is eager to join the high-speed league.

Variants of the Velaro are being sold to Spain, Russia, and China. But Siemens is facing intense competition from other manufacturers. Among them is Bombardier, a Canadian company with extensive European manufacturing activities. It has been involved in producing some of the most famous high-speed trains in the world, including the TGV in France, AVE in Spain, ICE in Germany, ETR in Italy, and CRH 1 in China. And along with France’s Alstom, it built Amtrak’s Acela Express—the closest that the United States has to date come to fast intercity rail travel. Spain’s Talgo and CAF are becoming growing competitors. Meanwhile, Kawasaki and other Japanese companies had long focused on their domestic market but are now increasingly pursuing export markets—already successfully in Taiwan, China, India, and the United Kingdom, and competing for contracts in Brazil, Vietnam, and the United States.

And now, Chinese companies—China Northern Locomotive and Rolling Stock (CNR) and China Southern Locomotive and Rolling Stock (CSR)—are increasingly challenging the established producers. The leading foreign manufacturers were lured by the potentially vast market in China. But they could set up shop in China only under stiff local-content requirements and technology transfer agreements.

Without question, the high-speed rail race is heating up—both in terms of building new lines and deciding who manufactures the trains. It’s a critical part of greening the economy.

Alstom, Bombardier, China, climate, European Union, fuel efficiency, Germany, high-speed, japan, manufacturing, rail, Siemens, Spain, transportation