SECRETARIAL CHINA CLEAN ENERGY BUSINESS DEVELOPMENT MISSION

MAY 16-21, 2010

MISSION DESCRIPTION:

U.S. Secretary of Commerce Gary Locke will lead a senior-level U.S. business development mission to China May 15-21, 2010 to promote U.S. exports in a broad range of leading U.S. technologies related to the following sectors: clean energy, energy efficiency, and electric energy storage and transmission and distribution. The mission will make stops in Beijing, Hong Kong and Shanghai.

The mission will focus on helping U.S. companies already doing business in China to increase their current level of exports and business interests, as well as, U.S. companies that are experienced exporters enter China for the first time in support of creating green jobs in the United States. Participating firms will gain market information, make business and government contacts, solidify business strategies, and/or advance specific projects. In each of these targeted sectors, participating U.S. companies will meet with prescreened local partners, agents, distributors, representatives, and licensees. The agenda will also include meetings with high-level national and local government officials, networking opportunities, country briefings, and seminars.

The delegation will be comprised of approximately 20-25 U.S. firms representing a cross-section of U.S. industries that have developed products, services or technologies to reduce greenhouse gas emissions. The mission will also be open to representatives of U.S. trade associations in the targeted industries with commercial interest in China.

Representatives of the U.S. Trade and Development Agency (USTDA) and the Export-Import Bank of the United States (Ex-Im) will be invited to participate to provide information and counseling on their programs, as they relate to the China market.

COMMERCIAL SETTING:

China’s rapid economic growth has been accompanied by a large increase in demand for energy and a dramatic jump in greenhouse gas emissions. Other pressing issues include China’s limited energy resources and need to increase industrial energy efficiency. In response to these challenges, China’s central government has made clean energy and energy efficiency strategic priorities. In the 11th Five-Year Plan, the government has set targets to reduce energy intensity per unit of GDP by 20% as well as reduce emissions for major pollutants, such as sulfur dioxides, nitrogen oxide, and carbon dioxide, by 10%.

The Chinese Government’s passage of the new Renewable Energy Law has codified many of these mandates, including a renewable energy portfolio of at least 15 percent by 2020. This law is partly responsible for the increase in new renewable energy projects and offers U.S. producers an important opportunity to provide solar photovoltaics, waste-to-energy, biomass, geothermal,

biofuels, and resource mapping technologies. China's solar power production in 2008 reached 1.5 million kilowatts; for solar power production, China currently ranks number one in the world. In 2009, solar energy investment in China reached $1.9 billion.

In addition to renewable energy, China is committed to significantly increasing its nuclear power generating capacity as a means to reduce its reliance on coal-fired power plants for electricity production. Mainland China has 11 nuclear power reactors in commercial operation, 20 are currently under construction, and construction is slated to begin on many more. According to the “China Greentech Report,” China’s ambitious nuclear program aims to increase its nuclear capacity significantly. The government has revised its previous target for 2020 from 40GW to 75GW, representing a compound annual growth rate of 18%.

As approximately 65 percent of China’s total energy consumption and 80 percent of all electricity generation is sourced from China’s vast coal reserves, a number of coal-related stimulus measures have been put forward by China’s National Development and Reform Commission (NDRC). The first tranche of $34.3 billion of central government stimulus funding was allocated in April 2009, including provisions for increasing coal-fired power production efficiency, advancing emissions reduction strategies, and upgrading the electric grid network. With 80 new coal-fired power plants scheduled for construction, the outlook for U.S. clean coal technology companies and power plant construction and service providers remains very strong.

The Chinese recognize that the industrial energy efficiency sector offers the least costly way to reduce greenhouse gas emissions and will help China achieve its ambitious energy efficiency goals. China’s government mandates to reduce pollution provide U.S. firms with the opportunity to supply clean tech solutions.

Driven by increased industrialization and rural electrification, China is also building a new electricity infrastructure driven by increased industrialization and rural electrification China’s electricity consumption is forecast to grow at an average of 7 percent per year through 2020. The current grid infrastructure system is unable to support greater electricity movement from western power generation resource bases to eastern electricity consumers. Thus, the electricity network sector, including traditional transmission/distribution systems and smart grid technologies, offers huge market opportunities for U.S. companies engaged in information and communication technology, power production, and renewable energy.

Beijing:

With a population of more than 16 million, China’s capital offers unparalleled access to policy-makers and key government agencies, including the National Development and Reform Commission, the Ministry of Environmental Protection, and the Ministry of Industry and Information Technology. Since China’s energy and environmental sectors are regulated by the central government, interaction with officials from these bureaus is often critical to a company’s success.

There is also a strong local market for clean energy technologies in Beijing due to its size, its political and economic importance. Thanks to Beijing’s status as an autonomous municipality, its municipal government can approve foreign investment projects independently from the central government up to a value of $100 million.

Although Olympics-related investment has contributed to improvements in the city’s overall environment, energy consumption and air pollution remain serious problems in Beijing. U.S. companies have considerable opportunities to provide the know-how and technology for Beijing to continue on its path to developing a clean energy market.

Hong Kong:

While Hong Kong, a Special Administrative Region of the P.R.C., is an integral part of China, it operates as a distinct economic zone, rendering the island city, an especially effective entry point for SMEs seeking to establish a presence in or expand their reach into mainland China and the Asia Pacific region. Distinguished also by a per capita GDP above $30,000, the island enjoys preferential trade and investment channels into and out of China, hosting many of Asia’s top trade shows. In addition, Hong Kong has an efficient, transparent legal system based on common law principles that offer rigorous intellectual property rights protection and an open government procurement process. These attributes provide U.S. companies, in particular SMEs, relatively easy access to mainland China through Hong Kong, often more rapidly and with fewer cultural barriers than by heading directly to the mainland.

For the Secretarial Mission, Hong Kong offers the delegation access to reputable business partners engaged in the “Cleaner Production Partnership Program.” Under this program, the governments of Hong Kong and neighboring Guangdong Province are jointly subsidizing energy and environmental upgrades to hundreds of industrial plants in the Pearl River Delta region of the mainland, most of which are operated from or owned by persons from Hong Kong. In the field of green building, Hong Kong has introduced mandatory standards and approved over 200 building energy audits, which are expected to drive major sales opportunities. Hong Kong is also home to major property developers and real estate management firms with projects in the mainland. In Hong Kong there are as many LEED accredited professionals and a larger concentration of U.S. architectural firms than in all of mainland China. In power generation, Hong Kong is aggressively pursuing fuel switching and other clean energy solutions, as well as renewable technologies. Given its strong R&D capabilities and talent, Hong Kong provides opportunities for U.S. firms in photovoltaics, lighting, and related fields. The Hong Kong government is promoting electric batteries, vehicles and associated infrastructure.

Shanghai:

Shanghai is known as the commercial and financial capital of China. With an estimated population of 21 million people, Shanghai is the second largest municipality (after Chongqing) as well as the largest city in China. After 16 years of double digit growth, Shanghai's economy started to slow substantially in 2008 and early 2009 with the onset of the global economic crisis. However, by the third quarter of 2009, Shanghai's gross domestic product (GDP) growth had recovered somewhat to 7.1%. Shanghai’s per capita GDP in 2008 was $10,529, three times the national average. Through November of 2009, total trade for Shanghai reached $247 billion compared to $321 billion for the full year of 2008. With its strategic location at the mouth of the Yangtze River, Shanghai also serves as the country’s central transportation hub, offering a developed air, rail, sea, and road transportation infrastructure. Shanghai is China's largest port and is now the world's busiest port in tonnage.

Shanghai faces the same severe energy challenges as many other cities. The city recently launched the multi-billion dollar Shanghai Urban Environment Plan, seeking to address urban planning and environmental needs for the city. The Shanghai Municipal Government’s energy strategy has focused on the diversification of energy supplies, increasing energy efficiency, and introducing clean energy technologies into the energy mix. Shanghai’s energy demand has grown approximately 6-8% annually; as a result, Shanghai’s building codes have been changed to encourage energy efficient technologies and design. More than 80 buildings are certified or applying for LEED certification and Shanghai spends 3% of its GDP on environmental protection.

By 2010, total renewable energy capacity is likely to increase drastically with wind power generation reaching 250-300 MW, solar photo thermal equivalent area at 2.5 million square meters, and photovoltaic power generation at 10 MW. As the host of the Shanghai 2010 World Expo, Shanghai’s government has launched a large number of urban infrastructure and city beautification projects in line with the Expo theme “Better City, Better Life”, promoting the theme of urban environmental sustainability. Shanghai is also considering a “100,000 Solar Roofs Initiative” to add solar panels to homes and businesses.

MISSION GOALS:

This trade mission will demonstrate the United States’ commitment to assisting U.S. clean energy companies sell new energy efficient technologies in China, and will help China achieve its goals to reduce overall greenhouse gas emissions. The mission will help U.S. businesses initiate or expand their exports to China by making business-to-business introductions, providing first-hand market access information, and providing access to government decision makers. The mission specifically aims to:

  • Assist U.S. companies already doing business in China to increase their business there;
  • Facilitate the entrance of U.S. companies that are experienced exporters to the China market for the first time;
  • Provide advocacy for U.S. companies interested in participating in major projects;
  • Supply information on U.S. Government trade financing and technical assistance programs, through the participation of representatives from USTDA and Ex-Im Bank.

MISSION SCENARIO:

The Clean Energy Business Development Mission to China will include three stops: Beijing, Hong Kong and Shanghai. In each city, participants will:

  • Meet with high-level government officials
  • Meet with prescreened partners, agents, distributors, representatives and licensees
  • Meet with representatives of the Chambers of Commerce, industry and trade associations
  • Attend briefings conducted by Embassy officials on the economic and commercial climates

Receptions and other business events will be organized to provide mission participants with further opportunities to speak with local business and government representatives, as well as U.S. business executives living and working in the region.

Proposed Mission Timetable:

Hong Kong

Sunday - May 16

  • Arrive in Hong Kong
  • Economic/Market Briefing by U.S. Government Officials
  • Welcome Dinner

Monday - May 17

  • Meetings with Local Government Officials
  • Business Event/Briefing with Local Industry Representatives
  • Individual Company Appointments
  • Reception Hosted by the U.S. Consul General

Tuesday - May 18

  • Depart for Shanghai

Shanghai

Tuesday - May 18

  • Arrive in Shanghai
  • Economic/Market Briefing by U.S. Government Officials
  • Reception Hosted by the U.S. Consul General

Wed. - May 19

  • Meetings with Local Government Officials
  • Business Event/Briefing with Local Industry Representatives
  • Individual Company Appointments
  • Depart for Beijing

Beijing

Wed. – May 19

  • Arrive in Beijing

Thursday - May 20

  • Economic/Market Briefing by U.S. Government Officials
  • Meetings with Government Officials at selected Ministries
  • Business Event/Briefing with Local Industry Representatives
  • Reception Hosted by TBD

Friday - May 21

  • Individual Company Appointments
  • Meetings with Senior Chinese Government Officials
  • Mission Ends/ Depart TBD

PARTICIPATION REQUIREMENTS:

All parties interested in participating in the Clean Energy Business Development Mission must complete and submit an application package for consideration by the Department of Commerce. All applicants will be evaluated on their ability to meet certain conditions and best satisfy the selection criteria as outlined below. Approximately 20-25 companies will be selected from the applicant pool to participate in the mission.

Fees and Expenses:

After a company has been selected to participate in the mission, a payment to the Department of Commerce in the form of a participation fee is required. The participation fee will be $10,000 for large firms and $8,500 for a small or medium-sized enterprise (SME), which includes one principal representative.* The fee for each additional firm representative (large firm or SME) is $3,300.

Expenses for travel, lodging, some meals, and incidentals will be the responsibility of each mission participant.

Conditions for Participation:

An applicant must submit a completed and signed mission application and supplemental application materials, including adequate information on the company’s products and/or services, primary market objectives, and goals for participation. If the Office of Business Liaison receives an incomplete application, the Department of Commerce may either: reject the application, request additional information/clarification, or take the lack of information into account when evaluating the applications.

Each applicant must also:

  • Certify that the products and services it seeks to export through the mission are either produced in the United States, or, if not, marketed under the name of a U.S. firm and have at least fifty-one percent U.S. content. In cases where the U.S. content does not exceed fifty percent, especially where the applicant intends to pursue investment and major project opportunities, the following factors, often associated with U.S. ownership, may be considered in determining whether the applicant’s participation in the trade mission is in the U.S. national interest:
 

o U.S. materials and equipment content;

o U.S. labor content;

o Repatriation of profits to the U.S. economy; and/or

o Potential for follow-on business that would benefit the U.S. economy;

  • Certify that the export of the products and services that it wishes to export through the mission would be in compliance with U.S. export controls and regulations;
  • Certify that it has identified to the Department of Commerce for its evaluation any business pending before the Department of Commerce that may present the appearance of a conflict of interest;
  • Certify that it has identified any pending litigation (including any administrative proceedings) to which it is a party that involves the Department of Commerce; and
  • Sign and submit an agreement that it and its affiliates (1) have not and will not engage in the bribery of foreign officials in connection with company’s/participant’s involvement in this mission, and (2) maintain and enforce a policy that prohibits the bribery of foreign officials.

Selection Criteria for Participation:

Selection will be based on the following criteria in decreasing order of importance:

  • Demonstrated export experience in China and/or other foreign markets;
  • Suitability of a company’s products or services to the China market and likelihood of a participating company’s increased exports to or business interests in China as a result of this mission;
  • Current or pending major project participation; and
  • Rank/seniority of the designated company representative.

Additional factors, such as diversity of company size, type, location, demographics, and traditional under-representation in business, may also be considered during the review process.

Referrals from political organizations and any documents, including the application, containing references to partisan political activities (including political contributions) will be removed from an applicant’s submission and not considered during the selection process.

TIMEFRAME FOR RECRUITMENT AND APPLICATIONS:

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Commerce Department trade mission calendar (http://www.ita.doc.gov/doctm/tmcal.html) and other Internet web sites, press releases to general and trade media, direct mail, broadcast fax, notices by industry trade associations and other multiplier groups, and publicity at industry meetings, symposia, conferences, and trade shows. The Commerce Department’s Office of Business Liaison and the International Trade Administration will explore and welcome outreach assistance from other interested organizations, including other U.S. Government agencies.

Recruitment for this mission will begin immediately upon approval. Applications can be completed on-line at the China Clean Energy Business Development Mission website at http://www.trade.gov/CleanEnergyMission or can be obtained by contacting the U.S. Department of Commerce Office of Business Liaison (202-482-1360 or CleanEnergyMission@doc.gov).

The application deadline is Friday, March 12, 2010. Completed applications should be submitted to the Office of Business Liaison. Applications received after Friday, March 12, 2010 will be considered only if space and scheduling constraints permit.

General Information and Applications:

The Office of Business Liaison
1401 Constitution Avenue NW, Room 5062
Washington, DC 20230
Tel: 202-482-1360
Fax: 202-482-4054
E-mail: CleanEnergyMission@doc.gov

*An SME is defined as a firm with 500 or fewer employees or that otherwise qualifies as a small business under SBA regulations (see http://www.sba.gov/services/contracting opportunities/sizestandardstopics/index.html). Parent companies, affiliates, and subsidiaries will be considered when determining business size. The dual pricing schedule reflects the Commercial Service’s user fee schedule that became effective May 1, 2008 (see http://www.export.gov/newsletter/march2008/initiatives.html for additional information).



Last Updated: 2/23/10 12:20 PM