By Chris Freimond, Managing Editor
Helping China address its pollution problems provides a significant opportunity for Canadian cleantech companies, says Denis L’Heureux, Export Development Canada’s (EDC) Shanghai-based chief representative in China.
“The opportunities are huge,” says Mr. L’Heureux. “As we know, China has very challenging pollution issues in the air, water and soil, and the government is really serious about trying to address the issue.”
A big challenge, he adds, is China’s energy mix. Much of the country’s energy is still produced by burning coal, which is abundant and cheap.
“One of the government’s objectives is to cap energy produced from coal at 65 per cent, but the massive demand for energy means that in reality, the situation is probably going to get worse before it gets better.”
For its part, the government is moving away from using what has been termed “dirty coal” and is improving processes of coal-fired plants to make them less polluting. It is investing heavily in natural gas and promoting alternative energy sources such as solar and wind power.
That’s all good news for Canad-ian cleantech companies, says Mr. L’Heureux, many of which are already in China exploring new business opportunities.
EDC helped facilitate the attendance of a delegation of 15 Canadian cleantech company representatives at last month’s Climate Business Forum hosted in Hong Kong by the International Finance Corporation, an arm of the World Bank. The group included CEOs of some of Canada’s leading cleantech firms.
“In China, a lot of business has to be initiated at the top, so the intention was to have Canadian CEOs meet with Chinese CEOs to explore opportunities,” says Mr. L’Heureux. “The challenge for the Canadian companies is their size; many of them have very impressive technologies, but they are small and the needs in China are very large in scale and require companies that have the capacity to address them.”
Nevertheless, he says, some Canadian companies have set up demonstration projects to prove their technology, which is an important step to winning over Chinese customers.
“We’re at a point right now where some of the Canadian companies are better positioned and are starting to have an impact,” he adds. “That leads to the next challenge, which is price. Chinese customers tend to be very price sensitive, but obviously some of these technologies are more advanced and the question is whether Chinese customers are prepared to pay the price for that.”
In a blog posting on the company’s website, Jim Mahoney, managing director of China at Kachan & Co., a San Francisco-based cleantech consulting company, says there’s no “cookie-cutter” approach for Canadian cleantech small and medium-size firms to get noticed, gain access to, and develop opportunities in China.
He points out that cleantech covers a broad umbrella of sectors, and China is made up of dozens of regional and localized markets each with their own priorities, administrative procedures, and institutions tasked with planning and implementing their cleanup.
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