Tag Archives: Julian Wong

Cheap Capital Bankrolls China’s Green Revolution

Chinese employees work at the Yingli Group's photovoltaic manufacturing plant, in China's Hebei Province.

Earlier this month, Julian Wong, Chief Editor of the Green Leap Forward blog, testified before the U.S.-China Economic and Security Review Commission. His testimony provides a crystal clear overview of  the different factors that are supporting China’s push to lead the global green economy, (at the expense of the U.S.). Over the next couple of weeks we plan to republish different  portions of Wong’s comprehensive testimony. We start today with his assessment of  China’s capital markets and their role in executing  Beijing’s green policies. Unlike the U.S. and Europe, where banks have tightened lending, Chinese banks are well stocked and therefore able to lend to renewable energy and cleantech companies at very competitive prices.

A distinct advantage of the Chinese system is its ability to both mobilize large volumes of low-cost capital through various channels, including state-owned investment vehicles and financial institutions, and economic stimulus programs. Planners also use smart, targeted, and sometimes novel financial and tax policy instruments to stimulate investments in clean energy projects.

First and foremost are the “Big Four” state-owned commercial banks, which really seem to play the role of development banks and whose lending activities are often times driven by central government policy. As a “priority sector,” clean energy and its related infrastructure projects have received preferential access to bank loans, and at borrowing rates below what is available in other countries for similar projects. The role of credit has been particularly significant in the wake of China’s economic stimulus plans, which unleashed a floodgate of bank lending—an unprecedented $1.5 trillion in 2009, and $680 billion in the first half of 2010 despite efforts by China’s de facto central bank to tighten up bank lending due to concerns about inflation. Continue reading Cheap Capital Bankrolls China’s Green Revolution

Reblog: How Green Is Chinas Stimulus Package? [VIDEO]

There is obviously a lot of interest in China’s growing renewable energy industry. Over the past year, China’s $586 billion green stimulus has emerged as a serious contender to win the global clean energy race at the expense of the U.S.? In a recent post for the Green Leap Forward,? Chief Editor Julian Wong dissects the Chinese stimulus and asks how green it really is. Wong is also a senior policy analyst at the Center for American Progress.

– By Julian Wong

I had the opportunity to answer this question as a member of a panel discussion at the Center for Strategic & International Studies, a Washington DC foreign policy think tank, two weeks ago.?? The event was held on February 17 to mark the one year anniversary of the American Recovery and Reinvestment Act, and sought to explore the effectiveness economic stimulus packages in the US and globally in catalyzing green investments (Wong’s remarks start at about 24’21).

My simple answer?? There is no simple answer.? The lack of transparency of what exactly is being allocated, how those allocations are being spent, and how the uncertainty around the lesser known story of bank lending (or monetary policy), that is separate from the fiscal stimulus figures into clean energy investments makes it nearly impossible to know just how much money is hitting the clean energy road in China. Continue reading Reblog: How Green Is Chinas Stimulus Package? [VIDEO]