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PANEL IV
NEW FRONTIERS:
OPPORTUNITIES & CHALLENGES FOR COOPERATION
Moderator:
Bill Bonvillian
Massachusetts Institute of Technology
This panel addressed opportunities and challenges for
cooperation between the United States and China in science and
technology, said Mr. Bonvillian, who as director of MIT’s Washington
office manages the university’s relationship with federal agencies and its
role in national science policy. “As we all know, there is a remarkable
amount of integration between our two countries on the commercial
side,” Mr. Bonvillian noted. “The two countries are major trading
partners. And there are global enterprises that are remarkably integrated,
though they still obviously have a distance to go.”
This panel asked “whether we can cooperate more deeply than we are
now on some very big societal challenges that we share,” Mr. Bonvillian
said. Issues discussed by the panel included health research, energy,
water, information technology. Speakers also addressed the structure of
the two nations’ innovation systems themselves and how they can
accommodate further collaboration.
Mr. Bonvillian said he hoped the discussion not only would explore
what kind of cooperation exists now, “but more importantly what there
could be.” In the pre-commercial stage in particular, he asked, “What are
the steps that might work? And could such cooperation be expanded and
occur?”
The first speaker, Yang Xianwu, has worked on high-tech
commercialization in the Chinese government since 1998, Mr. Bonvillian
noted. Mr. Yang is deputy director of high technology and
commercialization at the Ministry of Science and Technology. Over the
years, he has worked with high-tech industry zones, business incubators,
101
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102 BUILDING THE 21ST CENTURY: U.S.-CHINA COOPERATION
university science parks, and on boosting productivity. Mr. Yang has a
particularly strong background in commercialization of information and
space technology, he said.
Anna Barker has an extensive background in leading and managing
scientific research, Mr. Bonvillian explained. Dr. Barker is deputy
director of the National Cancer Institute at the National Institutes of
Health. She also is deputy director for strategic initiatives in science. Dr.
Barker “has done very interesting work on nanotechnology and its
application to cancer,” he said. She also has worked on the Cancer
Genome Atlas Project. Dr. Barker also has been a scientist herself. Prior
to joining the NIH, she led a large team performing cancer research at the
Battelle Memorial Institute. Dr. Barker also has been CEO of a biotech
drug-development company.
The third speaker, Robin Newmark, is director of the Strategic
Energy Analysis Center at the National Renewable Energy Laboratory.
“She has led very interesting work on the interrelationship between water
and energy, including the impact on climate change, the de-nitrification
of agriculture, and development of energy-efficient water-treatment
technologies,” Mr. Bonvillian said.
International Collaboration
and Indigenous Innovation
Yang Xianwu
Ministry of Science and Technology
China has achieved remarkable economic progress since reform
began and the nation opened up to the outside in 1978, Mr. Yang said.
The economic has grown rapidly, living standards have improved, and
China’s overall strength has been greatly enhanced.
But China still faces problems, Mr. Yang noted. The level of Chinese
industries remains relatively low on world standards. Most industries
focus on manufacturing. During the financial crisis, many such
enterprises closed. “The economic structure is unbalanced and
improper,” he said. “Also, our development is unsustainable.”
Manufacturing accounts for too high a proportion of the overall economy
and the service sector too low. Energy consumption is relatively high,
given the nation’s GDP. “To tackle these problems, we feel we have to
strengthen innovation, especially scientific and technological innovation,
to transform China’s economic development pattern and change the
industrial structure,” Mr. Yang said. “The ultimate goal is to make our
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PANEL IV-NEW FRONTIERS
nation an innovation country to match the level of countries such as the
United States.”
In 2003, China’s central government began drafting a medium- to
long-term science and technology plan from 2006 to 2020, Mr. Yang
explained.1 There are three major aspects to this plan. The leadership has
identified 16 major national science and technology projects. The plan
also identified priority areas for development, such as new energy
sources, new materials, information technology, advanced
manufacturing, biotech, and services enabled by information and
communication technology.
The government is implementing a number of policies to achieve
these goals, Mr. Yang said. It has been promoting science and
technology through financial support, taxation policies, and support for
research institutions, for example. Advancing China’s innovation agenda
isn’t only the job of the Ministry of Science and Technology, he noted.
The Finance Ministry also is active by funding basic research, such as
through the National Natural Science Fund, which supports research
based on scientists’ own interests. The 973 Program supports projects
with obvious application prospects, while the 863 Program backs frontier
high-tech projects. Another program offers technology outreach for
manufacturing and agriculture “to assume the good application of
technology in areas that are directly related to peoples’ lives,” Mr. Yang
said. Another program provides financial support to innovative small and
midsized enterprises.
Many of these programs existed before the current medium- and long-
term plan, Mr. Yang noted. “But since the plan, our financial investment
from central and local governments has greatly increased,” he said.
Investments from the governments of Guangdong Province, Jiangsu
Province, and Shanghai have grown several fold. Tax policies are
another important tool, Mr. Yang said. The government offers generous
breaks for high-tech enterprises and R&D investment.
While government investment in R&D has risen sharply, to 1.5
percent of GDP, Chinese companies have been slow to do so. Some 40
percent of R&D is funded by government, with the remaining 60 percent
1
China’s National Medium- and Long-Term Program for Science and
Technology was issued on February 9, 2006, by the State Council. It calls for
boosting research and development spending to 2.5 percent of gross domestic
product and for science and technology to contribute at least 60 percent of the
country’s development. It also calls for reducing China’s reliance on foreign
technology to no more than 30 percent by 2020.
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104 BUILDING THE 21ST CENTURY: U.S.-CHINA COOPERATION
coming from companies and institutions. “I think this is low,” Mr. Yang
said. “Business and society should increase their funding for R&D.”
Major weaknesses remain in China’s innovation system, Mr. Yang
said. The government is trying to stimulate more private research
investment. For example, it is identifying promising high-tech enterprises
and providing them with tax incentives. To qualify, these companies
must be in high-priority areas and must devote a certain share of
revenues to R&D, he said. Recipients also should have their own,
proprietary patents and have developed good applications for their
technology. For every yuan such companies invest, they will receive 1.5
yuan worth of tax incentives, he said.
In terms of policy, the government’s goal is to “strengthen
construction of basic conditions in priority areas,” Mr. Yang explained.
This includes establishment of national laboratories, high-tech research
centers at universities, and research institutes with modern laboratory
equipment. To accelerate the translation of research results into
commercial products, China has been establishing more small-business
incubators, university science parks, and high-tech industrial zones.
The government also is financing the establishment of laboratories,
engineering centers and large science facilities. It is aiding projects that
can serve as catalysts, Mr. Yang explained, such as university science
parks, high-tech industrial parks, and innovation centers. “We’re learning
from the experience of Finland and America’s Silicon Valley by
establishing a large number of incubation centers to help scientists
transform their research results and open their own small and medium-
sized enterprises,” he said.
The Ministry of Education has been promoting science parks since
1990. Most reputable research-oriented universities now have their own
science parks, Mr. Yang said. There are 50 high-tech industrial parks
throughout China, and more will be built. “They have become the most
energetic areas in local economic growth and industrial development,” he
said. “We continue to promote cooperation and alliances between
enterprises, research institutions, and universities so that they work
together on R&D and transformation of the tech sector.” Some
technologically innovative enterprises receive no government money.
“We just give them certain guidance and honor,” Mr. Yang said.
Despite the growing emphasis on indigenous innovation, however,
China still attaches great importance to international cooperation in
science and technology, Mr. Yang said. “We have gradually realized that
promoting international cooperation has played a very important role.”
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PANEL IV-NEW FRONTIERS
He noted that China has signed science and technology cooperation
relationships with 152 nations and regions. It has sent science diplomats
to 45 nations, and has signed inter-governmental agreements with 97
nations. China has joined 350 different international science and
academic organizations, in which 265 Chinese scientists hold posts.
China has participated in bilateral and multilateral programs, such as the
Human Genome Project, the International Thermonuclear Experimental
Reactor project,2 and European Galileo Program.3
Few relationships have been more important than the one with the
United States. “Cooperation with the U.S. has always been our priority,”
Mr. Yang said. The first Sino-U.S. Agreement on Science and
Technology was signed Jan. 31, 1979, by Deng Xiaoping and President
Jimmy Carter. This agreement has been extended every five years since,
most recently in April 2006 by Chinese President Hu Jintao and U.S.
President George W. Bush.
This partnership has achieved concrete results over the past decade.
Mr. Yang noted that the United States and China have signed some 50
cooperation agreements over the past 30 years. They have covered fields
such as agriculture, energy resources, the environment, and basic
science, involving nearly all Chinese government agencies. Since 2004,
the two nations have conducted scientific exchange programs each year.
The most recent agreement was the Protocol on Sino-U.S. Joint
Research Center for Clean Energy, signed in November 2009. Both
countries have promised they will provide the same amount of money,
$150 million over the next five years, he noted. The protocol calls for
collaboration on clean water, coal, automobiles, and energy. “This has
historic significance,” Mr. Wang said. “In the past, cooperation mainly
focused on exchanges of personnel. This is the first time both
governments donated directly to some joint development programs.”
In 2009, Mr. Yang explained, China and the United States celebrated
the 30th anniversary of scientific and technological cooperation.
President Barack Obama has spoken highly of bilateral collaboration, he
noted.
2
The International Thermonuclear Experimental Reactor (ITER) project is a
$12.8 billion multinational research and development program intended to
develop fusion as an energy source.
3
The European Galileo Program is building a global navigation satellite called
Galileo that is meant to be an alternative as well as complementary to U.S. and
Russian global positioning systems. The European Union and the European
Space Agency are leading the multibillion-dollar project.
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106 BUILDING THE 21ST CENTURY: U.S.-CHINA COOPERATION
Despite these successes, significant problems still hold back
collaboration in science and technology. “We have noticed some areas
for improvement,” Mr. Yang said. From the Chinese perspective, he
noted, “we feel that in enhancing Sino-U.S. cooperation, both
governments should deepen their commitment to investments.” He also
noted that the United States still places some restrictions on exports of
high-tech products to China. In addition, high-level personnel from
China continue to encounter unpleasant experiences in obtaining visas to
the United States.
Mr. Yang acknowledged China’s indigenous innovation “cannot be
separated from international cooperation. “The U.S. is the most
developed country in the world, while China is the most populated in the
world and one of the countries with the fastest growth,” he observed.
“During the past 30 years, we realized that bilateral cooperation benefits
us both. We’re both pursuing a win-win result. So we can foresee that
Sino-U.S. cooperation will develop further. For this, I am full of
confidence.”
Joint U.S.-China Medical Research Opportunities
Anna Barker
National Cancer Institute
Medical research is an area that is best positioned for collaboration
between the United States and China, said Dr. Barker, the National
Cancer Institute’s Deputy Director. The National Institutes of Health
already has a long history of working with Chinese researchers,
especially in cancer. In fact, she said, some of the seminal research in
cancer has been done as a result of the 30 years of collaboration between
the two countries.
Why is collaboration important? One reason, Dr. Barker noted, is that
the United States last year spent $2.5 trillion, equal to around 20 percent
of gross domestic product, on health care. The health care reform bill
passed in 20104 attempts to control future costs. “That is a big
challenge,” she said. Looking ahead, annual spending is expected to
reach $4.5 trillion by 2018.
4
The Patient Protection and Affordable Care Act (H.R. 3590) was signed into
law on March 23, 2010. Among other things, it expands Medicaid eligibility,
subsidizes insurance premiums, provides incentives for businesses to provide
health care benefits, and supports medical research.
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China is moving down a similar road as the United States, Dr. Barker
said. Infectious disease is declining in China, while chronic diseases are
rising significantly.
Another major trend in medical research is that there is an “important
convergence” of advanced technologies, molecular biology and
bioinformatics, which offers unprecedented opportunities for progress
against diseases such as cancer, she noted. “When you think about great
advances in science, it is in areas where the sciences come together,” Dr.
Barker said. “What we are seeing now in biomedical and medical
research is that areas like computation, engineering, and physics, which
we do not think enough about in biology, are converging in ways we
haven’t seen before. That represents significant opportunities for
innovation.”
Broadband offers another great opportunity to accelerate medical
research as the infrastructure develops, Dr. Barker observed. “If you
think about one of the areas where computation is really going to be
called on to make a major contribution, it is in medical research,” she
said. The United States has made the sharing of digital medical records a
major priority. “We’ll see. It’s very, very hard,” she said. “These
communities are very separated and, in many cases, siloed.”
Cancer exemplifies the rise of chronic disease as a killer. “Cancer is a
major U.S., and increasingly a global, health care crisis,” Dr. Barker said.
By 2020, cancer is projected to kill 10.3 million people globally. Such
forecasts recently have been raised and are projected to reach as high as
20 to 30 million new cases per year on a global basis. It is an emerging
crisis in China as well, “and will get much, much worse in the next 10 to
15 years, primarily due to the number of smokers,” she said. There were
2.2 million new cancer cases in China in 2009 and 1.6 million deaths.
Dr. Barker displayed a chart showing how cardiac disease and cancer
between 1973 and 2005 have emerged as the two top killers in China as
the population ages. In 2009, cancer overtook cardiovascular disease as
the biggest killer of people under the age of 85 in the United States. She
predicted the same will happen in China.
The United States reports 565,000 cancer deaths each year. Another
1.4 million new cases are expected to be diagnosed in 2010. The United
States spends $213 billion a year treating cancer. That will move much
higher in years to come—approaching $1 trillion a year. New cancer
cases are forecast to rise by 30 percent to 40 percent by 2020.
China is where the United States was around a decade ago. Cancer
already is the No. 1 killer in Chinese cities and No. 2 in the countryside,
Dr. Barker noted. It accounts for 25 percent of urban deaths and 21
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108 BUILDING THE 21ST CENTURY: U.S.-CHINA COOPERATION
percent of rural deaths. The aging population is a major reason these
statistics will continue to rise. By 2035, 23 percent of Chinese will be at
least 60 years old. As in the United States, obesity also is rising, with 23
percent of Chinese now considered overweight.5 “That was not a
problem in China until just very recently,” she said.
Environmental and occupational hazards are other major cancer
causes in China. There is a high incidence of liver cancer caused by
Hepatitis B, a disease that has been conquered in the United States, Dr.
Barker said. Lung cancer is perhaps the biggest danger in China. There
are 350 million smokers, and many of them will get cancer. The pattern
is similar to what the U.S. experienced, she observed. Lung cancer
accounts for 29 percent of cancer-related deaths in the United States and
has reached 22 percent in China.
While stomach cancer largely has been conquered in the United
States, it remains a serious problem in China. The National Cancer
Institute works actively with Chinese researchers on this problem. “We
have learned a lot about stomach cancer from the Chinese, and we will
learn a lot more,” Dr. Barker said. She predicted stomach cancer will
follow the pattern observed in the United States and be virtually
eliminated in China based on treating patients for the associated
infectious agent H. Pylori).
Serious bilateral research collaboration between the United States and
China began in the 1970s. It was noticed that certain areas of China, such
as near tin mines, had unusually high mortality rates. These areas
represented hot spots in terms of environmental exposure, Dr. Barker
explained. In 1979, the U.S. Department of Health and Human Services
signed a memorandum of understanding with China. November 2009
marked the 30th anniversary of that agreement, and a symposium was
conducted to discuss progress. A new memorandum of understanding is
planned, she added.
Some of the National Cancer Institute’s seminal epidemiology studies
were done in China, she noted. “We learned a lot in China about cancer
causation in some of these areas,” she said. “It has benefited the world
overall.” One such study led to regulation of benzene in the United
States, Dr. Barker noted. Important studies that advanced understanding
of liver cancer and the impact of the environment on different cancers
were done in China. The NCI’ s Division of Cancer Epidemiology and
Genetics teamed with China’s Centers for Disease Control and
Prevention, for example, to study the link between indoor cooking and
lung cancer. The University of Washington and the Shanghai Textile
5
Data from World Health Organization Health Information Profiles, (2008).
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Industry Bureau studied cancer among textile workers. “Most of these
studies have led to worldwide regulation of one form or another,” she
said.
China is currently making vital contributions in biomedical research,
Dr. Barker said. In the past decade, the number of papers published by
Chinese scientists in cancer research has more than quadrupled. China
ranked second to the United States in published scientific papers in 2007,
2008, and 2009. The highest portions of these papers were in material
science, chemistry, physics, and mathematics. The number of life
sciences publications has risen exponentially, and many have been
written with American colleagues, Dr. Barker noted.
The number of Sino-U.S. collaborations doubled between the periods
of 1998 through 2003 and 2004 through 2008.6 The National Cancer
Institute works with the Chinese Academy of Medical Sciences, the
Chinese Academy of Sciences, the China Center for Disease Control, and
many major universities.
Cancer genomics is among the most exciting areas for investment in
China. It now is possible to sequence cancer genomes, Dr. Barker
explained. In the United States, the National Cancer Institute has
launched a project called the Cancer Genome Atlas. The goal is to
sequence genomes of all cancers. Chinese colleagues are collaborating
on the project, she said.
Nanotechnology is another area were both the United States and
China are making enormous investments, Dr. Barker noted. “We believe
this is the area that is going to have one of the biggest impacts on the
ability to detect and treat disease and deliver drugs,” she said.
“Nanotechnology will actually touch everything we do in medicine in the
next 10 years.”
In terms of cancer treatment, Dr. Barker said, China is a vital partner
in clinical trials. “I should add that for cancer, nearly every major cancer
center and hospital in China is being led by a scientist who trained at the
National Cancer Institute and/or a U.S. medical school,” she said. “We
have a huge number of alumni in China. When we go to China, it is like
going home—we are going to see people we know.”
Cancer genomics will be important for developing new therapies and
diagnostic technologies, Dr. Barker predicted. China’s programs also are
an opportunity to study rare cancers not found in the United States. The
National Cancer Institute is working with China on brain, esophageal,
gastric, and liver cancers, for instance. “We are looking at population
6
Data from Global Research Report China (2009), Thomson Reuters.
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110 BUILDING THE 21ST CENTURY: U.S.-CHINA COOPERATION
differences as well as to build the whole area of genomics,” she said.
“China has led this area in the sequencing of the human genome, and I
think will lead it with us for the next several years.”
In addition to playing a big role in sequencing the human genome,
China sequenced the rice genome. Its researchers were among the first to
identify the SARS genome. In 2010, the Beijing Genomics Institute
became the world’s largest next-generation sequencing center, she noted.
The National Cancer institute and BGI are researching brain tumors.
Research collaboration in nano-technologies also will grow, Dr.
Barker said. China has 5,000 scientists at 50 universities in this field and
300 nano-technology enterprises.7 It is second only to the United States
in research publications. There are 20 Chinese Academy of Sciences
institutes and 300 Chinese companies in nanotechnology. The Chinese
government invested an estimated $240 million from 2004 through 2007,
and local governments another $360 million.8 “We are trying to build on
our respective strengths in nanotechnology,” she said. “This is a very
strong collaboration.” The third meeting between United States and
Chinese medical researchers on this topic will be conducted in fall 2010.
The National Cancer Institute also wants to build on the collaboration
with China in clinical trials and the study of environmental effects on
cancers. “There is an opportunity to do this right from the beginning,”
she said. “We are working with the Chinese to build new clinical-trial
systems with several hospitals in China.”
The institute’s goal is “to continue to expand our health care
partnerships, and do that with a number of alumni in China and many of
the post-docs that train with us here,” Dr. Barker said. The institute has
set up an office in Beijing, she noted, headed by Dr. Julie Schneider, who
leads many ongoing collaborations.
In the future, medical and health care research “is going to be a very
distributed enterprise,” Dr. Barker predicted. “But I think it will be
dominated by the U.S. and China because our countries are making the
investments.” Because of research in areas such as disease genomics, she
predicted there also will be “a shift toward understanding the mechanistic
causes of disease, which will lead us to a global understanding of how to
prevent diseases like cancer.”
Dr. Barker said she foresees such research leading to big changes in
the health care system. “I think the knowledge base with bio-informatics
and broadband will enable broad access where ever you are in the world
7
Data from Science 309: 65-66, 2005.
8
Ibid.
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to the best available treatments,” she predicted. Healthy populations will
“define stability” in the future and will be critical to knowledge-based
economies, she said. “China and the U.S. are in the best position to really
dominate in medical research,” she said, adding that she looks forward to
the next 30 years of collaboration.
National Laboratories and International Cooperation
Robin L. Newmark
National Renewable Energy Laboratory
The National Renewable Energy Laboratories (NREL) is engaged in a
wide array of clean-energy projects in China that reflect the laboratory’s
broad mission, Dr. Newmark explained. NREL, a U.S. Department of
Energy national laboratory, is the nation's primary laboratory for
renewable energy and energy efficiency research and development. In
addition to conducting research and development on renewable energy
and energy efficiency technologies, energy efficiency and technologies,
NREL, based in Golden, Colorado, and tied to the Department of
Energy, analyzes “the markets, financing, and policy mechanisms that
will enable the great energy transformation we are all undertaking right
now,” she said. “Part of that work is the study of innovation.”
Collaborations between government agencies of both nations range
from research into broad national needs to narrowly focused partnerships
with private companies to accelerate development of specific
technologies. Many such projects stem from an umbrella agreement on
clean energy negotiated through the U.S.-China Strategic Economic
Dialogue.9
High-level engagements in areas of national interest include an
Electricity Production and Transmission Action Plan, which explores
best planning and management practices. A Clean and Efficient
Transportation Action Plan exchanges best practices on new-vehicle
technologies and design and management of transportation infrastructure.
NREL also aids two “eco-partnerships,” which pair cities in the
United States with cities in China for cooperation on specific clean
energy and environmental objectives. Seven initial eco-partnerships were
established under the U.S.-China Framework for EcoPartnerships, signed
9
The China-U.S. Strategic Economic Dialogue is a framework agreement
initiated by President George W. Bush and President Hu Jintao in 2006. High-
level officials from both nations meet twice a year to discuss topics affecting
economic relations between the nations.
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in December 2008 under the S&ED Ten Year Framework for
Cooperation on Energy and Environment. Six new partnerships have
since been established. One is between Denver and Chongqing and
focuses on transportation. A partnership between Greensburg, Kansas,
and Mianzhu, the earth quake-stricken city in Sichuan Province, focuses
on disaster recovery. Greensburg was devastated by a tornado and has
since been rebuilt, Dr. Newmark explained.
The lab is part of several seven new Sino-U.S. clean-energy research
cooperation centers initiatives announced during President Obama’s
mission to Beijing in the November of 2009. These initiatives span both
conventional and non-conventional energy technologies. On behalf of the
Department of Energy, NREL currently leads the U.S.-China Renewable
Energy Partnership initiative for the United States, which interfaces with
the Energy Research Institute under the National Development and
Reform Commission in China. A wind-power project under the U.S.
China Renewable Energy Program Partnership (USCREP) begins with
national wind-energy deployment planning analysis and includes
technical issues such as analysis of wake effects caused by downstream
turbulence associated with turbine interference in large wind farms, and
analysis of new wind resource assessment techniques based on SODAR
technology. Another important component of the USCREP is
cooperation for wind and solar standards, testing, and certification.
Currently, U.S. and Chinese industry and leading experts are cooperating
for new standards development in international forums such as the IEC,
and are cooperating in comparing results between national testing centers
and in general raising the level of international test center capabilities,
and development of standards, Grid interconnection cooperation is also a
high priority. Dr. Newmark explained. “Interconnection is very
important for both countries as we continue to deploy renewable energy
technologies and as we begin to incorporate that energy into the
infrastructure of the grid,” she said.
In addition to technical details, the wind partnership studies the
economics of wide-scale deployment. As part of this project, NREL,
LBL, and the Energy Foundation in Beijing Center for Resource
Solutions of the United States is teaming with HydroChina, the State
Grid Energy Research Institute, and the Meteorological Society to chart a
cost supply curve for wind -power that depends on the potential installed
capacity in different parts of China. These local cost-supply curves are
used to map wind-power resources across the country that can be used to
support development of a national plan. “Being able to link the
geographic distribution of the resources with the investment potential for
wind power deployment is where those resources are and how much
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money it will cost to implement wind power is really critical moving into
the future,” Dr. Newmark said. The same kind of methodology, she
added, will be applied to solar power and its connections to China’s
existing transmission system. Other types of policy cooperation under the
USCREP include: two workshops in 2011 to exchange information and
experience on effective policy development to support renewable energy
deployment, a workshop PV project evaluation and business model
development to support market expansion, and training in several
advanced analytical models at use at NREL for use in strategy energy
analysis needed by the Chinese National Energy Administration.
A number of private-sector partnerships also are underway in clean
energy. Chinese companies increasingly are investing in the U. S., Dr.
Newmark noted. Duke Energy, for example, is discussing a U.S. wind-
power plant with China’s Huaneng Power International. Duke also is
developing solar projects in the United States and joint technology in
bio-fuels, clean coal, smart grid, and other areas with ENN Group. The
U.S. Renewable Energy Group has proposed a large $1.5 billion wind
project in Texas with two Chinese companies. And AMSC Windtec of
the United States is working with Dongfang Turbine Corp. on an
offshore wind project that would be designed by the American
Superconductor Corp. Dongfang would own the intellectual property, she
said.
Consistent with increasing interest in expanding U.S.-China
renewable energy trade, Chinese companies also are beginning to
building U.S. factories to make renewable-energy equipment and would
like to increase clean energy investment in the United States at the
manufacturing and project development levels. This interest includes
plants to make solar photovoltaic panels and wind turbines by such
companies as Suntech and Goldwind in China. “The bottom line is that
China is making investments in U.S. projects and manufacturing
capabilities,” she said.
There are public-private partnerships between the two countries as
well, Dr. Newmark explained. One example is the U.S.-China Bio-Fuels
Cooperation Program. The project program was begun by initiated by the
DoE, USDA and Chinese NDRC-China Memorandum of Understanding
on Cooperation in the Development of Biofuels. Partners include five
U.S. DoE national laboratories, agencies of the USDA, and federal labs
controlled by the U.S. Energy and Agriculture departments and several
research institutes and universities supported by the Chinese companies
SinoPec, PetroChina, CNOOC, COFCO and COFCO ZTE.
The bio-fuels program has four major research areas, each with very
different mixes of players, Dr. Newmark said. A project on the supply
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and logistics of feed stocks, for example, studies the economics and
technical solutions for supplying non-food feed stocks for cellulosic
ethanol conversion. Two U.S. national laboratories and the U.S.
Department of Agriculture, ORNL and INL, are teaming with a range of
Chinese partners.
Another set of bilateral projects focuses on processes for converting
feed stocks into bio-fuels. One project involves NREL, Tsinghua
University in Beijing, and PetroChina and other future partners focuses
on biochemical conversion processes for cellulosic ethanol production. .
It utilizes NREL work on characterization to study the breakdown of
enzymes and other parts of the conversion process. Another project
focusing on thermo-chemical conversion processes is a partnership
between the Pacific Northwest National Laboratory in Richland,
Washington, and the Dalian Institute of Chemical Physics supported by
CNOOC. They primarily study pyrolyosis and gasification processes to
convert biomass feedstock to mixed alcohols and other biofuels. A
partnership between NREL and the Chinese Academy of Sciences in
Qingdao seeks to develop biodiesel from algae and green diesel, which is
derived from plant oils.
Once technology is developed by these collaborations, the private
sector must use it to develop commercial products. NREL is involved in
three partnerships with private companies that work with Chinese
research institutes. “It is a ground-level interaction,” Dr. Newmark said.
“Through this cooperation, we go from a government-to-government to
research institution to a commercialization train in order to develop new
bio-fuels,” she explained.
A partnership between NREL and ENN Group Co. focuses on
commercial production of solar power and algae biodiesel, for example.
The company is using 5.2-square-meter amorphous silicon module
manufacturing equipment acquired from Applied Materials. NREL also
works with the Institute of Electrical Engineering of the Chinese
Academy of Sciences to cooperate on solar PV device testing. . The
project uses NREL’s testing know-how to cooperate for standards and
certification processes for Chinese products, which are prevalent in the
global PV marketplace, Dr. Newmark said.
On the purely commercial side, the United States and China have
launched an energy-cooperation program that “is very unique,” Dr.
Newmark said. The program is a consortium of 30 to 40 large U.S.
companies that are seriously engaged in China’s energy sector. It is
supported by the U.S. Foreign and Commercial Service, the trade-
promotion arm of the Department of Commerce. “This consortium has
developed a communications network that makes it very easy for them to
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interact with their Chinese counterparts,” Ms Newmark said. “It helps
them know who to speak to and where the connections should be made
for various energy topics.”
In sum, Dr. Newmark said, both the public and private sectors are
heavily engaged in research collaboration between China and the United
States. “We see rapid growth in interactions,” she said. “There are
enormous opportunities for mutual benefit with innovations from both
the U.S. and China.” Although many challenges in the relationship
remain, “our observation is that we are making progress,” she said.
Discussion
Dr. Wessner asked Dr. Newmark to elaborate on the barriers in China
she mentioned in her presentation.
One barrier is concern over intellectual property, Dr. Newmark
responded. Whether it is transferred or created through innovation,
multinationals worry whether intellectual property is protected and
whether its “commercial benefits will be maintained.” In recent energy
agreements with China, intellectual property has been addressed more
specifically up front, she noted.
Mr. Bonvillian asked if intellectual property also is a concern in
medical research and whether there has been any progress.
Intellectual property is a major issue in medical research as well, Dr.
Barker said. “As collaborations increase, especially in biotechnology,
international distribution becomes an issue,” she noted. “I think we are
seeing progress, but we have work to do.”
Mr. Bonvillian asked both speakers whether U.S. visas also are a
major problem in medical research.
Obtaining visas for Chinese counterparts was a significant barrier for
the first year after the Sept. 11, 2001, terrorist attacks, Dr. Barker said. In
2009, “I think we were able to get visas for nearly everyone who wanted
to visit with us,” she added. “I think it is getting much better now than it
was.”
Dr. Newmark said NREL works with a large number of foreign
visitors and that it is relatively easy to get visas for them. She added that
NREL does hardly any classified work, though. For other national energy
laboratories doing classified research, there are more barriers for
American visitors as well as foreign nationals. “Overall we have seen an
improvement in conditions since 9/11,” she said. “I think we will
continue to see improvement with the tremendous focus on energy
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research and the need for the perspective of multiple stakeholders and
other nationals.” Still, visas remain a problem, she said.
Mr. Bonvillian asked Mr. Yang of the Ministry of Science and
Technology to elaborate on the visa problem.
While he is not very well informed on the current situation, Mr. Yang
said, he had experienced problems with transfer of technology from the
United States. “These issues are familiar to everyone,” he said. In terms
of travel visas, the ministry has heard complaints. China has experienced
visa problems in collaborative life sciences research and in areas where
there is “some sensitivity,” he said. But this hasn’t been an issue in
energy research, he said.
Mr. Wang responded to some of the comments regarding intellectual
property protection. He noted that systems to protect IPR have been in
existence for a long time in other countries. Since China opened its
economy, “it has achieved tremendous progress” in establishing laws.
Many IPR courts also have been set up in China to address disputes, he
added, and there have been successful cases of prosecution for
intellectual property theft.
Intellectual property protection, however, “is not only the work of the
government,” he said. “Enterprises should provide evidence of IPR
infringement. With evidence, a court will make a ruling.” Companies
should not count on the government to conduct investigations on its own.
Mr. Chen of the Ministry of Industry and Information Technology
said he had heard of many IPR infringement cases, mainly through the
work of the State Intellectual Property Office. In terms of software, the
Chinese government has consistently expressed to the public the
importance of using legal software. He noted that China now has a
copyright law and is implementing regulations to protect copyrights.
“Many, many manufacturers have complaints about enforcement of
copyright protection,” he conceded. China has set up a judicial system to
interpret these laws. “I am sure the government can do more in terms of
establishing this environment,” he said.
The government took an extra measure in 2006, Mr. Chen said. The
Copyright Bureau, in collaboration with the Ministry of Commerce,
issued a ruling that all computers manufactured in China install
registered operating systems. No piracy is allowed for computers leaving
factories, he said. “If copyrights are infringed, companies should seek
legal means to protect their rights. But the government did extra work,”
Mr. Chen said. “I believe this cannot be achieved by many countries.”
These efforts are producing results, Mr. Chen said. Each year, the
government collects measurement data on the 22 largest computer
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hardware manufacturers. Legal operating systems are now pre-installed
in 90 percent of computers released by manufacturers, he said. “We have
the hard figures to prove that, at least at the operating system level, the
piracy issues have greatly improved,” he said. “Many of our colleagues
may not understand the measures taken by the Chinese government. In
my view, many of the figures that people get were not obtained
correctly.”
He cited the example of a study on copyright infringement and
software piracy in China that was based on only 150 product samples.
“In a country as large as China, they made of conclusion on software
piracy based on only 150 samples. I think we can ask whether these
figures are accurate.”
Dr. Barker asked if China is experiencing success with its business
incubators and whether the government is doing anything to encourage
technology transfer through incubators.
China’s system is different from that of the United States, Mr. Yang
noted. In the past, R&D mainly was conducted by universities and
research institutes. “Chinese companies paid attention to production and
didn’t care about R&D,” he said. Research institutes even designed
products and then tried to convince manufacturers to produce them.
Now, “we encourage companies not to wait for research institutes to give
the R&D,” Mr. Yang said.
The government is establishing platforms for commercializing R&D
and to encourage innovators to set up business, Mr. Yang said. Science
parks and incubators are examples. The government is supporting the
effort with policies, such as preferential treatment. “The main driver is
the market, however,” he said. “We learned from advanced countries.”
China’s first incubator was established in Wuhan in 1987, he noted.
Now there are incubators in most major cities. Many were built after
science parks were established to encourage researchers to
commercialize innovations.
Another Chinese delegate explained that many state-owned Chinese
companies are weak in research and development. So China has
borrowed strategies from developed nations. “We realized what is
required is not just innovation in technology but also innovation in
services,” he said.
There are some preconditions for development of a high-tech
industry, he noted. It requires venture capital, for example. The Chinese
government is developing the venture capital market. Next, China needs
intermediate agencies. “The government realizes that services and
commercialization of results are very important. We will make all efforts
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to accelerate commercialization of results as China tries to form a more
market-oriented economy.”
Jim Hurd of the GreenScience Exchange observed that a private
incubator in Beijing was started by Kai-Fu Lee, the former president of
Google China. A second development, Mr. Hurd noted, is the evolution
of foreign limited-partner venture capital firms in China. A new law is
under discussion in the Pudong district of Shanghai to encourage the
venture capital industry. He asked whether these developments also may
be a source of cooperation between the United States and China.
Dr. Wessner asked how much money the Chinese government is
investing to support small and midsized enterprises. He noted that the
United States has the Small Business Innovation Research program,
which provides almost $3 billion a year for early-stage funding. Dr.
Wessner asked whether China has a similar program, and if so at what
scale.
China’s central government has been investing in small and midsized
high-tech companies since 2000 through a fund announced by former
Premier Zhu Rongji, Mr. Yang explained. In its first year, the fund
totaled RMB1 billion. The fund is managed by the Ministry of Finance.
The Ministry of Science and Technology advises how to utilize the
funds. Mr. Yang said he believes the fund has been increased to RMB 4
billion. However, this fund only represents the federal government’s
investments, Mr. Yang noted. Local and provincial governments also
provide funds for small and midsized enterprises.
Xu Jing, deputy division director of the Tariff Policy Department of
the Ministry of Finance, asked how the U.S. government decides how to
make such investments.
Mr. Bonvillian noted that defining the U.S. government role is very
complicated because there are “so many different models in so many
different sectors. So there is no simple answer.”
