Margaret Pearson, University of Maryland, Department of Government and Politics

Auto World [Qìchē dà shìjiè] January 4, 2010 http://news.mycar168.com/2010/01/151898.html

34^ The June 2009 plan for the industry was to have 500,000 electric vehicles deployed by 2015, and 5 million by 2020. (The number of cities was subsequently expanded from 10 in 2009 to 25 in 2011.) A recent report notes that “by the end of 2012, only about 17,400 EVs were deployed nationwide. Official figures put the number of Energy Saving and New Energy Vehicles (which include but are not limited to EVs) combined at 27,400; only 16% were sold to private buyers, underscoring public sector dominance in this developing market. (China Greentech Report 2013) See also Gallagher (2014).

35^ Guangzhou municipality has advocated the adoption of electric vehicles for taxis, providing charging locations for taxicabs.

36^ Jinhua, Zhejiang, the home city of Kandi, was named a provincial pilot city for new energy by the Zhejiang government.

37^ Rentals are not yet profitable; as of late 2014 the company is only renting half of the 6 hours per day needed to break even. Huátài zhèngquàn yán jiù bàogào [Huatai Securities research report], “Xīn néngyuán qìchē chǎnyè liàn diàoyán zhī kāng dí chē yè: Wēi gōngjiāo móshì diǎnrán shìchǎng” [“New energy automotive industry survey of Condi Auto: Micro-bus mode ignites the market." http://finance.qq.com/a/20140827/054110.htm.

38^ Kandi’s success at topping sales is reported in http://cleantechnica.com/2014/10/27/china-electric-car-sales-reach-record-high-charts/.

39^ When Beijing approves of the outcomes of local discretion the practice is seen as positive experimentation. When the outcomes are negative, Beijing often deems the behavior “defiance.” How to encourage positive discretion and avoid the negative is a major issue for China’s central government. See Mei and Pearson (2014).

40^ Shandong Provincial government development officials viewed low-speed vehicles as part of development of a new industry in electric vehicles, hoping that by 2014 the province’s EV industry sales would reach 100 billion yuan, with 300,000 vehicles. NetEase Auto网易汽车, http://auto.163.com/13/1024/16/9BVE5VFD00084TV1.html (Oct. 24, 2013).

41^ As Brandt and Thun (2010) argue, domestic firms that cannot compete with large SOEs or foreign firms often innovate by targeting low quality, low price-points segments. Thus, these EV firms’ success may be due more to market position and strategy than their special treatment by the provincial government.

42^ NDRC Department of Industry Director Li Gang’s declaration that EVs are “junk technology” is at: 耿慧丽: “低速电动车争议再起 发改委官员公开否定, 2011年07月29日，经济观察网。[Geng Huili: "Controversy Over Low-Speed Electric Vehicles has Arisen Again, as NDRC Officials Publicly Reject,” July 29, 2011, Economic Observer Online.] http://auto.qq.com/a/20110729/000199.htm. Protectionism for major incumbent auto-makers was also likely involved in the efforts of both NDRC (responsible for setting SETI policy) and MIIT (responsible for setting standards in the EV sector) to squelch low-speed EV manufacturing.

43^ “Rural Chinese Flock to Tiny Electric Cars,” New York Times, April 19, 2012. In 2013, only 17,000 hybrid and EVs (cars and buses) were sold across the country.

44^ In 2014 Guangdong and Hebei provinces followed suit, with provincial pilot programs to support low-speed lead acid battery vehicles.

45^ On the relationship between cadres’ performance and the criteria for career advancement, see Mei (2009), Landry (2008) and Li and Zhou (2005).

46^ The implication is that local officials can feel more emboldened in carrying out localized interests as long as they can plausibly be argued to be aligned with central interests. Not all local officials are subject to promotion, and some remain in the same locale for long periods. In this situation, two other, complementary, views of how local officials work to align interests with the center are useful: Kostka and Hobbs (2012) on “interest bundling”; and Ahlers and Schubert (2009) on “strategic groups.” Similarly, Chen Jinjin (2011, 5082) argues that “some local governments believe that only through deviations from the central directives can economic growth be achieved. . .”

47^ Chinese local officials are not the only local officials with short time horizons. Two year election cycles for the US Congress shorten representatives’ time horizons as well. However, Chinese style industrial policy, a mainstay of the PRC’s policy instruments for investment in key policies, is intended to work over a much longer time horizon than is practical for most local officials.

48^ According to Landry (2008), while the formal term of mayors is five years, the average duration of Chinese mayors’ terms in 2000 was 2.2 years, even though the formal term is 5 years. It is also the case that heads of SOEs, themselves subject to the nomenklatura system, also have a short time horizon that may be contrary to investment in innovation activities.

49^ In the US, the Obama administration has often pointed to the desirability of developing green technology as a jobs stimulus. However, green technology has created relatively few jobs. Indeed, although statistical categories are rather fuzzy, it would appear that the post-2008 emphasis on green technology, while producing payoffs in energy conversion, have created virtually no new jobs. (Johnson 2013)

50^ As recently as May, 2014, Linfen government in Shanxi agreed with Mei Year Group to invest 14.8 billion yuan (US$2.3 billion) to build a new energy automotive industrial park. (Linfen has the informal designation of China’s most polluted city.) Similar investments in such parks also were planned in Inner Mongolia, Luoyang, Ningbo, Changde, and Guizhou. “Dīsù diàndòng chē jù zī háodǔ xīn néngyuán qìchē chǎnyè yuán” [“Low-speed electric vehicles heavily gamble new energy automotive industry park."] 21 Shìjì jīngjì bàodào [21^st Century Business Herald] October 15, 2014.,http://auto.cnr.cn/qczcjj/201410/t20141015_516598395.shtml.

51^ Similarly, Baoding government responded quickly to the central government’s signals to promote rapid expansion of wind power firms.

52^ “PV Impulse.” Jiangxi’s interest in LDK was in part because it is an SEI, but not so much due to its innovation potential.

53^ The son of a high ranking official who runs an RFID consortium was likely instrumental in bringing these funds to Wuxi.

54^ Compounding the likelihood that the establishment of charging stations would be a “political task” was the fact that there was no clear business model for them, such that the business sector was unlikely to take on the problem. (“BYD Leverages” 2010)

55^ Consumers are reluctant to buy EV sedans if they do not have convenient mechanisms for charging them. Provision of charging stations has been taken on as a public good in other economies, including in the US, as market actors have been unsure of the economics of this service beyond at-home plug in connection. Without out-of-home stations, consumers are often reluctant to invest in pure EVs, especially given the price premium, and government efforts to prop up demand have not worked well as of yet. This dynamic is one reason e-taxis have been an obvious industry for local governments to support (despite its own problems surrounding the need for daytime charging).

56^ This does not mean Yingli has not shown innovative capacity; rather, the point is that the key labs designation may not be very relevant, hence “wasteful.”

57^ These factors are not unique to China. But I argue they are more severe, and are overcome with greater difficulty, in the Chinese context.

58^ Many scholars attribute this competition, and efforts to gain local notoriety through protectionism, as a function (at least in part) of the aforementioned cadre promotion system. On inter-jurisdictional competition, see Lü and Landry (2014).

59^ The cities with existing strong auto firms – such Shenzhen and Shanghai – often were chosen by MOST as pilot cities. This choice has the obvious advantage of placing resources where infrastructure already exists (a hallmark of China’s experimentation policy). But local firms, especially when owned by the local government, also may be better equipped to benefit from local protectionism.

60^ There have been multiple campaigns to avoid wasteful investment by local governments and firms, such as in iron and steel, and real estate development. Yet these campaigns often are in a “macro-retrenchment” environment, whereas it seems projects tied to the “innovation” silo may be protected from such campaigns.

61^ Hangzhou’s battery switching model is more transferable.

62^ On tax supports in wind, see Lewis (2013, 56-7) and Gallagher (2014, ch. 4). Many central subsidies to consumers for the purchase of electric vehicles were eliminated in 2011.

63^ The three main aspects of the provision of electric power – generation, dispatch, and grid interconnection – are all controlled in significant ways at the local level in China. For example, there are myriad local independent power producers (IPPs) that generate electricity, and dispatch is heavily localized. The 2002 breakup of State Power Corporation’s monopoly led to the regionalization of the grid. These features of the industry create an extra local dynamic to national efforts to develop clean electric power sources, as local business actors have an incentive to do what is in their interest with regard to the industry. Local governments must compete with these local business actors. See Huang and Taplin (2012).

64^ Beijing has largely ended subsidies for solar installation, in part in response to such waste. (Interview 6-12-2014, Beijing.)

65^ See also http://money.163.com/12/0723/15/874080K500254O2B.html.

66^ Ibid.

67^ As is well-known, other problems have beset the Chinese PV industry, including the global financial crisis and declines in PV prices, collapse of key international markets (notably Spain), and the international trade dispute surrounding allegations of “dumping” of Chinese solar cells in Western markets.

68^ This has not been a problem in the solar panel sector, where technology is relatively standardized.

69^ “China Offers Billions to Subsidize Electric Cars on Gas,” Bloomberg News, December 10, 2014. On China facing the same barriers as those encountered worldwide, such as high battery costs and generally high costs relative to combustion engines, see Bernstein 2013.

70^ A comparison of problems in China’s EV market with more successful cases of Japan, and Korea is Tillemann (2015).

Directory: files
files -> Answer True False 2 points Question 2
files -> Integer programming and game theory
files -> 4 Integer Programming
files -> Bpa vehicle Window Repair Scenario #1 task: Procure vehicle window relacement. Objective
files -> Pop Warner History
files -> North Carolina Inclusion Initiative Mapping Where Children with ieps are Being Served Purpose
files -> Fall 2013 Spring 2014 Program Data: Standard 1 Exhibit 4d
files -> Hanban – asia society confucius classrooms network 2010 request for proposal
files -> Northern England’s set-jetting locations