Abstract
China is currently the world’s largest installer of wind power. However, with twice the installed wind capacity compared to the United States in 2015, the Chinese produce less power. The question is: Why is this the case? This article shows that Chinese grid connectivity is low, Chinese firms have few international patents, and that export is low even though production capacity far exceeds domestic production needs. Using the tools of Austrian economics, China’s wind power development from 1980 to 2016 is documented and analyzed from three angles: (a) planning and knowledge problems, (b) unproductive entrepreneurship, and (c) bureaucracy and government policy. From a theoretical standpoint, both a planning problem and an entrepreneurial problem are evident where governmental policies create misallocation of resources and a hampering of technological development.
Highlights
What Peter Wiles and numerous scholars at the time did not see were the cracks in the Soviet economic system (Boettke 2001, 2002a; Huerta de Soto [1992] 2010)
The Soviet Union is gone; the slightly younger, seventy-year-old People’s Republic of China is still a planned economy that by some accounts appears to be on the verge of outpacing the West
Cracks can be seen in the Chinese economy, as illustrated by its wind power industry, which is analyzed in this paper
Summary
The headline of a 1953 article by Peter Wiles in Foreign Affairs had stated that “The Soviet Economy Outpaces the West.” Based on the official Soviet statistics, the GDP growth numbers suggested. Wind power in China is obstructed by various barriers like quality deficiencies, low operational efficiency, and two-year permit delays from the central government for grid construction (Junfeng et al, 2002; Han et al 2009; Xingang et al 2012; Luo et al 2016; Zhao, Chang, and Chen 2016; Liao 2016; Sahu 2017) These issues have hampered China’s wind power energy output and exports (Zhang et al 2015; Sun et al 2015). The theoretical framework will be utilized to analyze problems in Chinese wind power development
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