Abstract
In light of a conspicuous strength in China’s solar and wind industry in recent years this paper analyses the catalytic role of the government in inducing the institutional source of its strength. Critical comparison of the two industries show China’s renewable energy policies for wind industry was more effective than the solar industry through adopting a self-propagating functionality development through fusing the external technology with domestic industries know-how to co-evolve both production and diffusion through effective assimilation. This suggests a new insight for growing economy to devise effective policy framework to develop a globally competitive industry.
Highlights
The policies of the Government of China (GOC) have been praised by the world community including the Europe and USA, mainly the implications of the twelfth five year plan for the global race towards low carbon technology competiveness. (Worldbank, 2013; IEA, 2013; REN21, 2010, Wharton, 2011)
After the renewable energy law was passed in 2005 (NREL, 2009), the uptake has been significant as shown in Figure 1 and the total adoption of wind energy has reached 66 GW by 2011
According to the economy’s basic policy, the resource-saving target was set so that during the period of the Eleventh Five-year Plan the unit energy consumption Gross Domestic Product (GDP) would be reduced by about 20%
Summary
The policies of the Government of China (GOC) have been praised by the world community including the Europe and USA, mainly the implications of the twelfth five year plan for the global race towards low carbon technology competiveness. (Worldbank, 2013; IEA, 2013; REN21, 2010, Wharton, 2011). The aim of this study is to show how policy tools promote the uptake of wind and solar renewables into the energy sources and in the creation of domestic firms and accelerates the uptake of the domestic components into the capital infrastructure of these energy sources This helps in understanding the importance of the pre-existing relevant knowhow and importance of policies to co-evolve the supply chain in order to grow a new industry in a given region. China was triggered by the government’s catalytic inducement initiated by its industrial cluster policy It stimulates to assimilate the spillover technology from related foreign invested firms into renewable industries to develop indigenous products such as wind and solar energy equipment production and installation. Information regarding patents, exports and overall country level data were referred from OECD and World Bank data
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