In this new “iCET News Express” section, iCET starts to provide updates on the progress of some of our exciting programs. We hope you enjoy these updates in addition to the regular news briefing we offer, and look forward to your feedback!

iCET LED project process

May 5^th, iCET project director Dr Yufu Cheng was elected as the Founding Secretary General for the “China Green Lighting Industry Promotion Alliance”, the alliance is to support lifting Chinese LED products quality and environment benefits. More information please link to:

http://www.icet.org.cn/en/Programs/LED_en.html

iCET holds Jiangsu China & California USA clean-tech exchange workshop

On May 22nd, Innovation Center for Energy and Transportation (iCET) joined China Jiangsu Department of Foreign Trade and Economic Cooperation, and the US-China GREEN Business Exchange organized a Clean-tech Solutions and Investment workshop in Los Angeles, USA . The Jiangsu clean-tech delegation has a good communication with California officials and US clean-tech companies. More information on http://www.icet.org.cn/en/Programs/jiangsu_en.html .

^{General Energy
Issues}

China 's energy needs secure, expert assures

May 22 (China Daily) -- China will work toward ensuring energy security, at least, for the next 10 years despite mounting concerns to the contrary, a senior energy advisor to the government has asserted.

Han Wenke, member of the National Energy Advisory Committee said this yesterday during a panel discussion at a two-day seminar, 'Energy Security in Asia', held in Beijing . He was responding to queries regarding the factors affecting China 's energy supply.

"Factoring in all the concerns, we can conclude that China 's energy security can be ensured at least in the coming decade," said Han.

The relatively lower growth rate of energy consumption since 2005 has come as good news for the Chinese government even as the economy has been growing at a high pace, said Han.

Currently, the energy consumption growth was about 4 percent, dramatically dropping from 15 percent and 16 percent in 2003 and 2004 respectively.

Han said the strengthened measures to improve energy efficiency would keep energy demand growing at about 4 percent annually in future while the economy grows at around 8 percent.

"Stable and low demand growth is essential to energy security," said Han, also president of the Energy Research Institute of the National Development and Reform Commission.

He said other factors, such as the dramatic fluctuation in global oil prices, geopolitics, and domestic emergency response systems to energy supply suspension can also affect China 's energy security.

"But all the factors are changing and through our efforts the damages due to these factors can be minimized," said Han.

Ding Zhimin, deputy department director of policies and laws at the National Energy Administration, told China Daily that China would continually depend on domestic supply to solve its energy problem.

"This is a strategy that we will not change and that's the foundation of our energy security," said Ding.

She said China would make strides in constructing nuclear, solar and wind power stations while exploring conventional energy resources.

Han said China would not slacken in efforts at oil and natural gas exploration at home despite plunging global oil prices. He added that China would do more to tap oil and gas, especially in deepseas, to meet its growing energy demand.

"We are determined to explore more oil and natural gas resources to ensure our energy security even though oil prices are low now," Han said.

While strengthening domestic efforts, China will also continuously import more oil from overseas producers, said Han, forecasting that China 's oil imports will increase from last year's 190 million tons to nearly 360 millions in 2020.

Last year, China 's dependence on oil imports had already reached 50 percent. Oil prices have plunged from $ 147 a barrel last July to around $35 this March. It has since surged by 75 percent from the March low to around $ 60 a barrel.

"And, I think, by 2020 our dependence on oil imports will touch 60 percent," said Han.

(http://www.chinadaily.com.cn/bizchina/2009-05/22/content_7928825.htm )

China 's energy saving target must be ensured

May 19 (Xinhua) - China will make sure to meet its energy saving and emission cut target up to 2010, which is a "solemn promise" to the world, a senior official said Tuesday.

China is "hopeful" to cut energy consumption per unit of gross domestic product (GDP) by 20 percent, and cut emissions of major pollutants by 10 percent between 2006 and 2010, said Xie Zhenhua, deputy director of the National Development and Reform Commission (NDRC).

As one of the world's major CO2 emitter, China has been making consistent efforts to curb pollution and save energy through improving industrial structure.

In 2006, China 's energy consumption per unit of GDP fell 1.79 percent, the first drop since 2003. The figure fell 4.04 percent in 2007 and 4.59 percent last year.

From 2006 to 2008, China cut its energy consumption by 10.1 percent. That means saving 300 million tons of standard coal and cutting CO2 emissions by 750 million tons, Xie said.

Last year, emissions of sulfur dioxide fell 5.95 percent and that for Chemical Oxygen Demand (COD), a main index of water pollution, dropped 4.42 percent.

However, some experts worried that, affected by the global financial crisis, Chinese enterprises may have less impetus for spending on emission reduction in 2009, and thus the country is faced with greater pressure of emission reduction.

The goal has been met by half, and the task remains arduous, Xie said."It is a hard task which should be ensured."

China plans to eliminate 15 million kw of power-generating capacity in small coal-powered plants, as well as obsolete capacity of 10 million tons in the iron industry and 6 million tons in the steel industry this year.

(http://news.xinhuanet.com/english/2009-05/20/content_11403629.htm )

Clean energy industry a new growth engine

May 25 (China Daily) –A slower world economic growth rate, especially a serious economic recession in some of the world's major economies since the outbreak of the global financial crisis, has caused worldwide demand for energy consumption to drop drastically.

Against the backdrop of an unprecedented financial crisis in a century, all countries have made all-out efforts to find new areas for economic growth in an effort to pull out of the ongoing crisis and rejuvenate their economies. In this process, the new energy industry has been extensively considered as a new locomotive to drive a new round of economic growth.

Since the outbreak of the global financial tsunami, many countries in the world, developed ones in particular, have made great efforts to boost the development of their new energy sector, hoping that such a move would help them survive the prolonged economic winter. In doing so, they aspire to take a strategic initiative in future global economic development, and on such global issues as energy and climate change. The ongoing financial crisis has not stopped the accelerated development of the world's new energy industry. On the contrary, the crisis has expedited its burgeoning development and given rise to an accompanying market competition.

That the development of the new energy industry has been taken as an important way to grapple with the financial crisis and as an effective tool to help take an initiative in the increasing economic competition ahead marks a particularly prominent change in the world's energy industry since the outbreak of the crisis.

China has not lagged behind in this new economic trend. At this year's session of the National Committee of the Chinese People's Political Consultative Conference held in March, Zhang Guobao, chief of the National Energy Administration, said the country will attach great importance to the development of the new energy industry and will closely track the new global trends in this field. He vowed " China will increase investment in the new energy industry, strengthen scientific research in this field and raise its development to a strategic position". The head of the newly established agency, affiliated to the National Development and Reform Commission, the country's macroeconomic decision-making body, also cautioned that China would lag behind other nations in this emerging economic field if it does not see this issue in a strategic perspective.

To sharpen its edge in increasing international competition, China has regarded the development of new energy as an effective way to boost slackened domestic demand. Some positive changes have emerged in China 's new energy policy, pushing the country's hydropower, wind power and nuclear power to a new development stage.

The country's enormous hydropower potential is yet to be fully tapped. China now boasts a water resource with a theoretical capacity to generate 6.08 trillion kwh of power per year and an average power of 690 million kw. The country's currently low installed hydropower capacity indicates that the huge potential is yet to be tapped. Currently, the largest factor in the way of the country's hydropower development has changed from the earlier economic and technological restrictions to the present-day ecological and environmental ones.

China 's wind energy is also in the blossoming stage. Compared with solar power, wind power generation is more practicable and more in keeping with the world's energy exploitation trend. According to the third wind power census by the China Meteorological Administration in 2006, the country's total land wind energy volume is about 4.2 billion kw, with an exploitable capacity of 300 million kw. In addition, the country's exploitable offshore wind energy is about 750 million kw.

The global financial crisis is not expected to have a severe impact on China 's booming wind power industry. Instead, the crisis has offered rare chances for the country to further boost its wind power sector. To effectively deal with the ongoing crisis, China has taken wind power development as a key part of its newly mapped new energy strategy. According to the country's power development program, a host of mega wind power bases with a generation capacity of tens of thousands of kw are planned to be built across Gansu , Hebei , and Jiangsu provinces and the Inner Mongolia autonomous region within 10 years. That will contribute a lot to the development of the wind power industry.

Also, nuclear power has entered a booming development stage in China . Since the 1970s when the State Council made a decision to develop nuclear power, the country's nuclear power industry has made remarkable progresses. China is now well positioned to step up its nuclear power development in terms of expertise, technological levels and equipment capability. The country's nuclear power takes about 2 percent of its total power volumes.

China had adopted a positive approach toward the development of nuclear power. The National Energy Administration is actively pursuing a special program for nuclear power development. With the substantive support of the country's preferential policies, along with its possession of well-developed technologies, the country's large-scale development of nuclear power will become a reality. Nuclear power is expected to play a more important role in the country's clean energy campaign.

The author Hu Shaowei is a senior economist with the State Information Center .

(http://www.chinadaily.com.cn/bizchina/2009-05/25/content_7940179.htm )

Cleaning up on green energy investment

May 12 (www.ccchina.gov.cn) -- Stock markets go into freefall, banks totter on the verge of insolvency, governments open their vaults in a bid to bail out the world's financial system.

Hardly the optimum time to venture into a new category of high-risk emerging industries, one might think. Or is it?

Wind power, solar energy, and nuclear power, now the environmentally-friendly investments battlefields in China , have taken a battering that even outstrips that meted out to the conventional energy industries.

SDIC Electric Power Co, a fully owned subsidiary of SDIC and one of the nation's major power investors, sees clean energy providers as the next target sector for its continued expansion, even if something of a contentious one.

Over the last two years, the company has striven to develop low carbon-emission energy investments, particularly in the wind power, solar energy, and nuclear power sector, as key emerging industries in China .

Wang Huisheng, president of the State Development and Investment Corp (SDIC), the parent company of SDIC Electric Power Co, remains a keen advocate: "As China 's economy grows, it will need all the energy it can secure, including wind, solar, and nuclear. This clean technology is at the top of our priorities as our next substantial investment initiative."

As Wang maintains, although the price of conventional fuels fell earlier this year, in the anticipation of the economic slump, the issues of global warming and China's dependence on oil and coal have not gone away.

He says: " China needs to shift toward a low-carbon economy development model. Companies that can find innovative ways to manage and conserve carbon will thrive."

Solar energy

In the dark days of the global economic recession, SDIC is striving to bring a little into China through riding on the coattails of the emerging solar photovoltaic (PV) industry.

On May 5 the SDIC Electric Power Co signed a deal with Northwest China's Qinghai province to develop a solar PV energy project with a 200 Megawatt (MW) capacity and, subsequently, feed the generated solar power into China 's national grid.

The solar PV project will be built on the city of Golmud in Qinghai , a plateaued area that boasts the nation's richest sunshine resources. The first phase of its construction aims to generate some 100MW.

In late March of this year, the SDIC's first nuclear power project came online. The company secured a 10 per cent stake in the Xudabao Nuclear Power station. The facility, set in Huludao, a small coastal city in the northeastern Liaoning province, involves total investment capital of more than 90 billion yuan. It will begin construction later this year and is scheduled to commence operations by 2014.

Wind power

With wind power now widely tipped to deliver a major blow to the conventional energy industries, SDIC is committed to capitalizing on its potential within China .

In January SDIC's investment in its latest wind turbine project received the nod from the National Development and Reform Commission. This has seen it emerge as a key backer of the Kangbao Wind Power Farm's second phase of construction. Set in the city of Zhangjiakou , in Hebei province, the company sees the development as a key move in its bid to emerge as a major force within the wind power industry.

This approval was secured following the success of SDIC's first wind turbine farm, the Jiancaitang Wind Power Farm. Operated by the SDIC Baiyin Wind Power Company, it went into operation last December, having secured a total investment estimated at around 436 million yuan.

When fully operational, it will boast a total capacity of 45MW, with 99.32 million kilowatt hours (kwh) of annual output. Occupying 16.3 sq km and with an installation of 30 1.5MW generation units and a 110KV booster substation, the facility is the first wind power project in northwest China 's Gansu province.

SDIC's third wind power investment, the Dongfeng Wind Power farm, located in Jiuquan , Gansu province, attracted a total investment of 499 million yuan. It completed site construction last November and is expected to go into operation this year. Its total installed capacity will be maintained at 49.5 MW. It features 33 1.5 MW generation units and an 110KV booster substation.

The SDIC Huajing Power Holdings Co Ltd, the listing unit of the SDIC Electric Power Co which floated on the Shanghai Stock Exchange, suffered a 77.53 percent year-on-year plunge in its net profit to 124 million yuan in 2008. The operating income from its core business totaled 6.55 billion, showing a slight decline of 1.07 percent year-on-year.

The company sees last year's slight profit decline as a direct consequence of the surge in coal prices, leading to higher operating costs for its thermal power division.

As of the end of 2008, SDIC Huajing Power had a total installed capacity of 6.792 million kw.

(http://www.ccchina.gov.cn/en/NewsInfo.asp?NewsId=17335 )

MOF unveils subsidies for solar sector

May 22 (China Daily) - The Ministry of Finance (MOF) has pledged full support to develop the country's fledging new energy and energy conservation sectors as the future economic growth engines.

The ministry will allocate sizable subsidies to scale up China 's wind power industry, build solar power stations and encourage people to buy new fuel vehicles and other energy-efficient home appliances, as well as improve environment, Zhang Shaochun, vice-minister of finance, said yesterday at a meeting with provincial officials.

In addition, the MOF incentives will be used to phase out resources-consuming facilities, build more wastewater treatment facilities and promote clean production measures.

"We cannot afford to waste time in developing China 's new energy industry, otherwise we will lag behind other countries," he said.

"Although we are facing extreme tight fiscal conditions this year, the MOF will allocate 30 billion yuan ($4.40 billion) for energy conservation projects and another 8 billion yuan for the renewable energy sector," Zhang said, adding policy incentives, especially those for public financing, are essential to incubate an emerging industry.

The ministry will also reward local wind turbine manufacturers who come up with innovations in the multi-MW wind turbine technology and will give support for companies to provide grid connections for the wind farms located in remote areas. The MOF will also join hands with the Ministry of Science and Technology and the National Energy Administration to launch a "Golden Sun Project", Zhang said without elaborating, but he promised that solar power stations will be given subsidies and allowed to pass on the additional cost to generate power from clean solar energy to end users.

The MOF and the Ministry of Science and Technology launched a trial program early this year to give public transportation companies and government agencies cash incentives for alternative-energy buses if they save at least 10 percent fuel. The fund covers 13 cities, including Beijing , Shanghai , Chongqing and Shenzhen.

In addition, it also cooperated with the country's top economic planner, the National Development and Reform Commission, to offer cash incentives for home appliances producers so that they could make the prices of the energy-efficient air conditioners, refrigerators, plasma TV sets more affordable to consumers.

According to Zhang , China will provide subsidy for 5,000 alternative-fuel public transportation vehicles and 3 million air conditioners within the year.

Vice-Premier Li Keqiang reiterated that China should take the initiative in scaling up its new energy and energy-saving sectors, as a way to improve core competence, increase demand and nurture new growth sectors.

(http://www.chinadaily.com.cn/bizchina/2009-05/22/content_7928801.htm )

Getting wind of the future's energy needs

May 4 (China Daily) -- China has set a target for renewable energy consumption of 40 percent of the market by the year 2050.

The news comes as it emerges that China will have 100 GW of wind power capacity by 2020, more than three times the 30 GW the government set as a target 18 months ago.

It's also been revealed that China will become the biggest growth market for wind power generating capacity this year, ahead of the United States, which has been worse-hit by the economic downturn, according to the Global Wind Energy Council (GWEC).

China is the fourth largest producer of wind power after the United States , Germany and Spain .

The annual growth rate in wind power in China will be about 20 percent, Fang Junshi, head of the coal department of the National Energy Administration, told a Coaltrans conference in Beijing .

China , the world's second largest energy user, has around 12 GW of wind power capacity and has said it wants to raise that to around 20 GW by next year. That means wind is set to be a bigger source of power than nuclear, despite a construction boom in nuclear power plants, and far bigger than solar, which is expected to hit 1.8 GW by 2020, according to a 2007 plan.

More than 27 GW of wind power generating plants worth about $53 billion were built around the world last year. Demand for power in China has been spurred by economic stimulus measures.

" China is powering ahead with no visible signs of slowing down," said Steve Sawyer of the Brussels-based GWEC. "If anything it is accelerating. They intend to become the largest market in the world, very clearly, and they probably will unless things take off in the US again in the relatively near term."

China 's local wind turbine manufacturing industry has "grown dramatically" as power production has expanded, Sawyer said. Local manufacturers, dominated by Sinovel Wind Co, Xinjiang Goldwind Science & Technology Co and Dongfang Electric Corp, captured more than half the domestic market for the first time in 2007, rising to between 75 percent and 80 percent last year.

"Although all the big international brands are there and their markets are growing in absolute terms, their market share is diminishing pretty rapidly," Sawyer said.

The growth in Chinese wind turbine manufacturing means Chinese-made equipment is poised to emerge in the international wind market "in earnest", Sawyer said.

Until now, Chinese suppliers have only won smaller contracts in the US , Cuba , Peru , Africa and the Middle East , he said.

Danish company Vestas, the world's largest wind turbine maker, plans to invest $9 million in its factory in Inner Mongolia to produce about 800 sets of V60-turbines every year. These turbines are specially tailored for Inner Mongolia 's low to medium strength winds, being shorter with bigger blades than standard turbines. The factory will employ an additional 1,000 Chinese people, about half of its current local employees.

The company, which entered the Chinese market in 1986, has a market share of about 12 percent. This pales in comparison with local competitors such as Sinovel, Goldwind and DEC, which took about 65 percent of market share in 2008, according to Shi Pengfei, vice-president of the China Wind Energy Association.

The World Wind Energy Report 2008 predicts that Asia, under China 's lead, will "become the worldwide locomotive for the wind industry" and "Chinese wind turbine manufacturers will be among the top international suppliers".

Wang Jun, director of the National Energy Administration's renewable energy department, said: "Renewable energy will become the mainstream power supply in 2050 from a supplementary role in 2010." He envisaged a future with heating dependent on solar and geothermal power, cars driven using biofuels and families owning their own photovoltaic power stations, turning the country from the world's biggest emitter of greenhouse gases to one of its smallest.

However, some are worried that too much attention and aid is being paid to the renewable energy industry. They argue China should focus on clean coal technology.

"Renewable energy is our destiny, but it is not the solution to China 's urgent problem of large-scale coal burning," said Feng Xiaoting, director of Jiangsu Coal Chemical Engineering Institute.

He said he believes that in the next 30 to 40 years, traditional energy, especially coal, will still be the powerhouse for China 's growth. He said clean coal technology research and development should be prioritized.

(http://www.chinadaily.com.cn/bizchina/2009-05/04/content_7740745.htm )

Changing shopping habits drive sales of energy-efficient bulbs

May 18 (China Daily) -- When Chen Yaoqing and her husband go shopping for light bulbs, they get the most energy-efficient ones they can find.

"The considerable amount of energy you can save just by changing the bulbs in your home tends to be neglected, largely because people don't think it's a big deal, or they are not willing to pay a little bit more for what is already a cheap product," said Chen, a telecommunications worker in Shanghai.

But Chen says she is making a difference to both the family's energy bill and the city's air quality by looking for out for more than just the cheapest price.

"The energy consumption of energy-efficient bulbs is much less than traditional incandescent lamps. I'll certainly gain ground on my energy bill in the long run," she said.

Chen is among a rising number of Chinese whose energy awareness and changing tastes are having a significant impact. A growing emphasis on functionality rather than cost and appearance is changing the fortune of low-energy bulbs in the world's most populous nation.

According to Liu Shengping, vice president of China Association of Lighting Industry (CALI), the number of incandescent lamps in use in China was 4.3 billion at the end of last year, but is noticeably on the decrease. Energy-efficient bulbs, on the other hand, are rapidly closing in, with more than three billion in use over the same period.

Liu attributed the progress to growing environmental awareness in China , as well as the government's latest efforts to promote more efficient lamps by offering subsidies of up to 50 percent on retail sales.

The massive subsidy program, which came into effect last April, aims to usher in 150 million energy-saving bulbs by the end of this year.

About 62 million had already been sold by January this year, saving 3.2 billion kWh of electricity and cutting carbon dioxide emissions by 3.2 million tons and sulfur dioxide emissions by 32,000 tons, according to official figures.

China 's current bid to stimulate domestic consumption to cushion the negative impact of the ongoing global economic slowdown could also create more opportunities for the sector to grow, as energy efficiency is high on the government's agenda, Liu said.

China 's rapid urbanization also helps its potential for energy-efficient lighting, said Lin Liangqi, Greater China CEO of Philips Lighting. "One of the important advantages of China is we have a lot of new buildings which could switch directly to more efficient forms of lighting, as opposed to Europe and North America, where the focus is very much on accelerating renovation and replacement," he said.

"The opportunities for efficient lighting are huge," he said.

China 's cities add 15 million new urban citizens a year, and half of the world's construction will take place in China by 2015, according to econet-china, an open network of German companies coordinated by the German Industry and Commerce to promote Sino-German cooperation for sustainability.

Energy consumption, in turn, is expected to rise significantly. A McKinsey Global Institute study reports that by 2025, urban China will account for 20 percent of global energy consumption.

Lighting is responsible for up to 35 percent of the energy bill of a typical building in China , according to the national statistics bureau.

China 's lighting industry has already changed, said Lin.

Philips' sales revenue from energy efficient lighting in China was 1.4 billion yuan last year, which is more than half of total product sales, he said.

Lin said the trend will continue and Phillips is now becoming more aggressive in the consumer luminaries market, where a growing number of middle class Chinese are pushing demand for value-added efficient lighting products.

He said the company has opened five consumer luminaries brand stores in Shanghai , in which 90 percent of products on the shelves are energy-saving devices.

It is also working actively on expanding its presence in second and third tier cites, with the goal of doubling its sales of consumer luminaries each year and opening more than 1,000 brand stores over the next five years.

Lighting will undergo an "absolute revolution," over the next 10 years, just like the ones seen in the consumer electronics or information technology industries, according to Rudy Provoost, Executive Vice-President and CEO of Philips Lighting.

"I can see in lighting, over the next 5 to 10 years, there will be some dramatic shifts, where complete categories could shift from incandescent lamps to energy-efficient lighting sources and from traditional technologies to solid state, or LED (light-emitting diode) lighting," said Provoost.

LEDs have lower energy consumption, a longer lifetime, are more robust, are smaller and are easier to switch than traditional size, although they cost ten times more.

Positioning LED as the next stage of the company's lighting business, Provoost said he expects there will be more examples of "a mix of technology" in which LED is used.

He also underscored the importance of government support in the bid to reduce energy consumption in general by raising green standards.

"It means not only setting aggressive standards that all the market players must live up to, but also that the authorities reward or penalize companies who do not live up to these standards," he said.

"It really needs concerted efforts, and the government has an important role to play," he added.

(http://www.chinadaily.com.cn/bw/2009-05/18/content_7785334.htm )

^{Automobile and
Transportation}

Obama vehicle deal 'positive' for nation

May 21 (China Daily) -- US President Barack Obama's tough new standards for automobile emissions will raise the barrier for Chinese vehicles entering the US market, but it could benefit China 's automobile manufacturing industry in the long run, analysts said.

"Obama's automobile emission deal enhances the difficulty for Chinese auto manufacturers to export their vehicles to the US market, a highly-matured market Chinese players are dreaming of, as it's even harder for Chinese vehicles to meet the new and stricter emission requirements," said Zhong Shi, an independent auto analyst.

However, the barrier will boost Chinese manufacturers' push to develop greener cars, which is expected to eventually benefit the domestic industry.

The White House on Tuesday released a national auto emission requirement for cars and trucks to lower their average energy consumption to 15 km per liter with a 30 percent emission reduction target by 2016.

The standard will make US drivers pay an extra $1,300 per vehicle.

Currently, the US market is still not an auto export destination for China .

Chinese automaker BYD Co, which launched the world's first commercial dual-mode electric car last December, has said it plans to start selling cars in the United States in 2001.

The Shenzhen-based company could be the Chinese firm that benefits the most from Obama's emission limits.

Its aggressiveness in developing green cars has won support from Warren Buffett. MidAmerican Energy Holdings Co, a unit of Buffett's Berkshire Hathaway Inc, bought a 9.9 percent stake in BYD for HK$1.8 billion last September amid the financial crisis in the United States .

Industry observers have called upon the Chinese government to increase support to green car development.

" China should learn from the US experience that we should pay more attention to energy efficiency when developing our own automobile industry," said Hui Yumei, an analyst with automobile market research company Sinotrust.

Hui said that China should start the extensive manufacture of energy-efficient vehicles with low-emission as early as possible. "We are lucky that the Chinese government has realized the importance of the issue and has begun to take active action."

Minister of Science and Technology Wan Gang said earlier this month that China plans to have 60,000 energy-efficient or new energy vehicles across the nation in 2012, with hybrid-powered automobiles accounting for more than 95 percent of the total.

The government has approved the manufacture of ten types of new energy vehicles.

Moreover, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and Information Technology have together with the Ministry of Finance started the test of new energy vehicles for public transportation in 13 Chinese cities, in a bid to improve the use of new energy vehicles.

(http://www.chinadaily.com.cn/bizchina/2009-05/21/content_7913357.htm )

China auto sales hit new high in April

May 8 (Xinhua) -- Sales of China's domestically made vehicle set a record high of 1.153 million units in April, up 25 percent from a year earlier, the China Association of Automobile Manufacturers (CAAM) said Friday.

This represents an increase of 3.91 percent from March. In March, sales rose 5 percent year-on-year to 1.11 million units.

Automakers produced 1.157 million motor vehicles last month, up17.9 percent year-on-year, according to CAAM. It was 5.61 percent higher than March.

CAAM said the April figure showed the country's auto industry had seen signs of recovery as the government's stimulus policies began to have an effect.

The association said the continuous pick-up in passenger car sales was bolstered by government stimulus policies. China unveiled a support package for the auto industry early this year, cutting purchase taxes for cars with small engine capacities and providing subsidies to rural purchasers.

In the first four months, motor vehicle sales hit 3.832 million units, up 9.4 percent year on year, while a total of 3.725 million units were produced, up 6.4 percent, according to CAAM.

Passenger car (sedans, SUVs and MPVs) sales in April rose 37.37percent from a year earlier to 831,000 units. The March figure stood at 772,000 units. While commercial vehicles (busses, trucks and pick-ups) fell 4.53 percent from March to 322,100 units in April, but rose 1.38 percent from a year earlier.

Passenger car sales in the first four months climbed 15.09 percent from a year ago to about 2.83 million units. Production totaled more than 2.69 million units, up 9.75 percent year on year.

(http://news.xinhuanet.com/english/2009-05/08/content_11338765.htm )

Chinese cars at the European market gates

May 6 (China Daily) -- Chinese carmakers are gearing up to enter the European market after testing the US waters some time back.

Though Chinese carmakers have not made much headway in the US due to the strict emission and safety norms, many have managed to make their presence felt in the marketplace and are currently reworking their overseas strategies. The decision to test the European waters is also part of the strategy by Chinese automobile manufacturers to explore new markets.

The European sojourn now looks more promising as the demand economics are changing globally to fuel-efficient and small cars. In the first quarter of 2009 about 3.4 million new cars were sold in Western Europe , 17 percent less than within the same period last year - and the bigger the cars, the bigger the sales drop.

Leading German automobile expert, Ferdinand Dudenhoffer from the University of Duisburg-Essen, said Chinese cars would soon have an important role to play in the European marketplace. "In five years, the Chinese carmakers can become what the Koreans are today," he told China Daily.

"In sunrise industries such as electric and hybrid cars the Chinese automakers will be quicker than their German competitors would imagine," Dudenhoffer said. He said that China would be "the center of the automobile industry" by 2020. "Nothing can stop this country."

Dieter Zetsche, CEO of Mercedes Benz, acknowledges that " China , unlike other economies in the world, is still in the growth mode".

"Cars from China could soon become serious market players in Switzerland ," the Swiss automobile club TCS said recently after a crash test for Brilliance BS 4 cars.

Brilliance Jinbei has been one of the first movers in the tough European market. In Germany , Brilliance is the only Chinese brand that has acquired a local distribution certification and started selling its cars.

Last year Brilliance Jinbei exported 10,115 vehicles, of which less than 10 percent was to Europe . The major export markets have been Southeast Asia, Africa and Latin America . For 2009, the company is targeting a sales number of 26,000 cars outside China .

Hans-Ulrich Sachs, managing director of HSO Motors Europe, the European general sales agent for Brilliance, expects car sales to touch 3,000 this year, with bulk of the sales in Germany . Sachs is confident that Brilliance will perform well due to its competitive prices and car design. "We are also confident as we score well on safety parameters," he said.

There has, however, been much controversy about the correct evaluation of Brilliance's BS 4 crash test conducted by several European automobile clubs. While the automobile clubs from the Netherlands , Austria and Switzerland credited three out of five stars to BS 4's crash performance, their German counterpart ADAC assigned a crushing zero star.

"Although the BS 4 is considerably safer than the BS 6 two years ago, the European crash norms have been tightened," an ADAC spokesman told China Daily. Car expert Dudenhoffer, said that this evaluation would make it hard for Brilliance to establish its brand in Germany , where car safety is a major selling point.

"It was an unfair crash test for Brilliance. We feel regrets over the ADAC result," said Hao Yongxin, director of overseas sales and marketing with Shenyang Brilliance Jinbei Automobile Co Ltd.

Brilliance importer HSO also expressed its concern on the differing test interpretations. "It is hard to shake off the impression that a card with political dimensions is being played here," HSO said in an official statement in reply to ADAC's zero star press release.

Sachs believes that some European automakers have developed "strong concerns" about Brilliance entering their home market. Ironically for Sachs the present situation is similar to the one he faced 17 years back when introducing Hyundai cars from Korea in Europe . "Like Hyundai back then, now Brilliance is being taken seriously," he said.

While Brilliance is trying its luck in Europe with upper and middle class cars, Dudenhoffer reckons that other Chinese carmakers are more likely to pose a threat to the likes of Volkswagen or Mercedes. He is convinced that the Chinese road to success will be built upon "small, budget-priced cars with reasonable security and quality standards". Dudenhoffer regards Geely or FAW as the more serious contenders in the European market. "Their prospects in the small car segment are quite bright."

Michael Bnning, sales and marketing director of BLG Automobile Logistics, HSO's Brilliance business transportation partner, is convinced that there will also be a niche in the upper class market for Chinese automakers: "We believe in Brilliance and in their future plans of selling cars in Europe ." He added that his company and HSO are willing to further collaborate with Chinese automakers to improve the performance in future European crash tests.

The European car market is dominated by Volkswagen (Volkswagen, Audi), with a 2008 market share of 18.8 percent and sales of around 3 million units. PSA (Citroen, Peugeot) from France and US automaker Ford (Ford, Volvo) achieved market shares of 13.5 percent and 10 percent respectively.

(http://www.chinadaily.com.cn/world/2009-05/06/content_7750499_2.htm )

Car designer sees China 's wheels electric-powered

May 12 (China Daily) –The UK's top car designer, Peter Stevens, sees China 's future on the wheels powered by electricity.

Stevens became one of the world's best-known figures in the industry receiving numerous honors for creating race cars for companies such as Lamborgini and Lotus.

The luxury car designer came to Beijing as part of the British Embassy's campaign to introduce UK talents to China .

Upon his arrival, Stevens was stunned by the number of electric bicycles on the streets.

"In London you don't see one [electric bike]; in Paris you don't see one [neither]," he said.

Stevens said Chinese manufacturers have mastered bike design and mass-production of electric cars could be the next step.

At the latest Detroit car show the Chinese automobile manufacturer BYD Auto displayed its first plug-in electric car hybrid F3DM.

By the end of this year, BYD, which produces 65% of the world's nickel-cadmium batteries, is planning to develop an environmentally-sound pure electric car.

The National Development and Reform Commission outlined China 's ambitious plan to become the world's largest producer of electric cars by 2011, manufacturing up to 500,000 units annually.

To boost the production of battery-powered vehicles the Chinese government will contribute up to 80 percent towards the cost, making a Chery electric car, which normally costs around 70,000 yuan, available for buyers at just 10,000 yuan.

With this new government scheme the China Association of Automobile Manufacturers expects car sales in the country to reach up to 10 million this year and overtake the United States .

BYD Auto already attracted world's most successful investors, including Warrant Buffet, who according to the Caijing magazine, recently bought 9.89 percent share of BYD for HK$1.8 billion.

With such recent developments Stevens believes China has the potential to become the world's largest producer of electric cars in the near future.

But he said to repair the Chinese car manufacturers' damaged reputation for alleged copycat deeds, the unique style must be found using the country's cultural elements in design.

(http://www.chinadaily.com.cn/china/2009-05/12/content_7769667.htm )

Gas-free cars future priority

April 20 (China Daily) -- China's campaign to bring cleaner, low-emission vehicles to its roads may take a back seat as the government first tries to stimulate growth and counter dwindling sales in the world's largest car market.

Battery and car maker BYD Ltd and other Chinese auto manufacturers with ambitions to be among the first to globally market all-electric vehicles are pinning their hopes on regulatory support to spur demand.

But creating an emission-free vehicle market is unlikely to be a priority for China . While China has made much progress in setting standards regulating vehicle emissions, it has not gone as far as providing incentives for individual buyers of the expensive but low-polluting cars.

"I hope government subsidies can help boost demand, because this is good technology, though expensive compared to conventional cars," Henry Li, general manager for BYD's auto unit, said in an interview at the firm's Shenzhen headquarters.

China , the fastest growing major market for vehicles, is also the world's largest emitter of greenhouse gases.

Car sales growth in China , which overtook the United States in January to become the world's largest auto market, slowed to a single-digit rate in 2008 for the first time in at least 10 years as consumer confidence waned in a slowing economy, spurring government steps to bolster demand.

Beijing unveiled a raft of policies in January to lure buyers back into showrooms, including halving the auto purchase tax for cars with engine sizes below 1.6 liters. The government also scrapped some road fees and offered subsidies for farmers to boost demand for fuel-efficient vehicles in rural areas.

But given the high cost of developing hybrid and all-electric cars, automakers require more than the lifting of road fees and tax breaks to stimulate demand, experts said.

"There should be some incentives in place to convince consumers to switch to electric cars," said Sinling Chung, chief executive officer of Hong Kong-based EuAuto Technology Ltd, which recently began marketing a China-made microcar in Europe .

"There is also the issue of infrastructure. At some point car owners will need juice points where they can park and plug in the cars," said Chung in an interview at EuAuto's Shenzhen plant.

EuAuto plans to sell its two-door micro cars in China within three years, but has turned first to Europe , where subsidies for consumers help drive demand for electric cars.

Hybrid cars

BYD started selling a plug-in electric hybrid car in December, called the F3 dual-mode or F3DM, which charges through a conventional home outlet and is supported by a small petrol engine. BYD, known for its cell phone batteries and its investor, Warren Buffett, plans to roll out its all-electric car, the e6, later this year. That could make it the world's first commercially-distributed electric car.

More established Chinese carmakers have also been developing hybrid and all-electric cars.

Wuhu-based Chery Automobile built a hybrid model, the A5, and unveiled a prototype of its pure electric car, the S 18 in February, while Shanghai General Motors Ltd, the 50-50 joint venture between General Motors Corp and SAIC Motor Corp, introduced the Buick LaCrosse Eco-hybrid in China last July.

The expensive cars, however, have not been flying out of showrooms.

BYD's F3DM sells for about 150,000 yuan, which is 30-40 percent cheaper than Toyota 's Prius in China but still double the cost of a comparable gasoline-powered car.

Toyota's Prius, with batteries that store energy from the engine to help power the car, sold 3,465 units from 2006 to 2008 in China - fewer than expected, according to Daiwai analyst Ricon Xia.

Green car program

China stepped up its support of green vehicles in January, offering up to 500,000 yuan in subsidies for companies and agencies purchasing electric vehicles for fleet use.

While the move was seen as positive for makers of green cars, experts say it will do very little to create demand unless subsidies are extended to individual car buyers.

"Extending a subsidy to a mass market will be a powerful incentive, but requires a lot of money," said JP Morgan analyst Charles Guo.

"There may be some debate whether this is necessary, so it's unlikely for the program to be expanded near term," he said.

For now, Beijing is more focused on driving consolidation in its fragmented and overcrowded car industry.

Beijing is widely expected to soon issue a detailed plan allowing big state-run companies to take over smaller rivals.

(http://www.chinadaily.com.cn/china/2009-04/20/content_7695337.htm )

Volkswagen Eyes China Venture

May 27 (Wall Street Journal) -- AG said it is exploring options for teaming up with China 's BYD Co. on hybrid and electric vehicles powered by lithium batteries -- highlighting auto makers' efforts to secure battery supplies for alternative-energy vehicles.

The companies are exploring the possibility that Shenzhen-based BYD would supply a lithium-ion battery technology it developed for plug-in hybrid and all-electric battery-powered cars, people familiar with the negotiations said.

Volkswagen, based in Wolfsburg , Germany , would be the first major automotive partner for BYD, which moved into the spotlight last year when a company controlled by investor Warren Buffett invested $230 million in the Chinese car maker, mainly because of BYD's cost-effective technology.

BYD -- one of the world's biggest producers of cellphone batteries and a fledgling, fast-rising auto maker in China -- caused a stir in December by launching a plug-in car ahead of more-established foreign rivals.

"Hybrids and electric vehicles will play an increasingly important role," Ulrich Hackenberg, VW's executive board member for technical development, said in a prepared statement. "Particularly for the Chinese market, potential partners such as BYD could support us in quickly expanding our activities."

BYD makes plug-in hybrid and electric-battery-powered cars. Above, the contacts used to recharge a BYD auto.

BYD also is talking to Ford Motor Co. and another European auto maker about similar arrangements, the people said. The status of those negotiations wasn't clear.

"We are always in discussions with many suppliers as a standard course of our business, but we have nothing to share at this time," said Whitney Small, a Ford spokeswoman in Bangkok .

Concerns over gasoline shortages and climate change have prompted a global race to commercialize affordable electric-battery cars and plug-in hybrids that get most of their power from batteries.

A big obstacle is insufficient industry capacity to produce lithium-ion batteries, which is pushing auto makers like VW to team up with multiple lithium-ion battery suppliers. Aside from BYD, Volkswagen has signed letters of intent with Sanyo Electric Co. and Toshiba Corp., both of Japan . Volkswagen's premium Audi AG brand last year agreed to cooperate with Sanyo on developing lithium-ion batteries, saying the new technology should be ready for large-scale production in 2012.

Getty Images

Concerns over gasoline shortages and climate change have prompted a global race to commercialize affordable electric-battery cars and plug-in hybrids that get most of their power from batteries.

While lithium-ion batteries are widely seen as the technology that will ultimately power most plug-in cars, the batteries' use has been hindered by a relatively high price, limited durability and safety concerns. BYD says it has largely resolved those issues by turning to a safer, more cost-effective technology: iron-phosphate-based lithium-ion technology.

Lithium-ion batteries produced in China are generally about half the cost of such batteries made in Japan and the