The Shanghai skyline is full of these kinds of cranes

You don’t just buy a ticket, pack a bag and head for the airport if you’re going to mainland China for the first time.  In my case it took months of preparation.  My agenda required hours spent on meetings and correspondence [including Skype as Chinese businesspeople love using it] all the while coordinating itineraries with my traveling companion, John Patterson (Mr. Sun Solar).  Americans who travel abroad rarely need more than a passport, but a VISA is required for China. That was a pain and it wasn’t cheap either, but none of this dampened my enthusiasm for the trip. Our neighbor, Margaret, who was born and raised in Taiwan, was kind enough to teach us a few words and sayings in Mandarin Chinese.  She also provided insights on Chinese culture and wrote out some index cards to we could communicate with taxi drivers and the like.  [Xie xie, Margaret!]  

With all of the nastiness going on in North Africa at the time, I thought it wise to sign up on U.S. State Department’s TRAVEL.STATE.GOV just in case the Shanghai U.S. Consulate needed to contact American citizens for any reason. Fortunately the world didn’t blow up, but Libya’s violent upraising caught the full attention of Shanghai TV and newspapers because there were 20,000 Chinese citizens living and working in Libya at the time, many of them construction workers.

The biggest conference and exhibition I've ever seen!

The timing of my trip is due to the Shanghai New Energy Conference Photovoltaic (PV) Power Expo 2011 – a mouth-full so just call it “The SNEC” – and it is scheduled for February 22-24.  It is hosted by the Shanghai New Energy Industry Association (SNEIA) and is the largest solar expo in the world (sorry Germany!) attended by 2000 companies and 100,000 visitors. A tremendous opportunity to find many of China’s solar industry professionals in one place and all motivated to do business.  This is the 5^th year of this conference and I understand it is getting bigger & better every year which mirrors all of the global solar conferences.  The conference itself is a blend of sessions, exhibits, social & cultural activities, with an optional three-day tour at the end sponsored by SNEIA.  http://www.snec.org.cn/zh1_e.asp.

Is 3 days on a bus with strangers a good idea? We'll soon see.

We opted for the tour as it will allow us to see much more in a shorter period of time and it offers opportunity to build relationships and exchange ideas with others from all over the world. In Asia, one must establish good relationships to have a successful business no matter the industry, so I’m lucky I know several people who live and work in Shanghai and they’ve agreed to be our guides.  

Here’s a peek at my schedule at a high level:

• Travel PDX – Shanghai PVG
• 3 Days at the SNEC (events & exhibits)     
• 3 Days on the SNEC Tour
• 2 Days visiting selected solar product manufacturers
• 1 Day meeting with Shanghai book agent
• 1 Day to sightsee
• Travel PVG – Tokyo NRT
• 4 Days in Japan
• Travel NRT – PDX

China is too big to see in one trip .. we'll be visiting SE area in/around Shanghai

We survived the 14-hour flight and arrived in Shanghai Monday evening and my friend Samuel Ni met us at the Pudong International Airport (PVG) to give us a ride to the hotel.  Along the way we were passed by a high-speed Maglev Train that zipped by so fast we barely got a glance. This train achieves top speeds of 268 mph (413 km/h). Maglev (magnetic levitation) is a system of transportation that propels trains using magnetic levitation from a very large number of magnets for lift and propulsion.  

Concerned about jet-lag, we went to sleep early because the next morning we faced an early wake-up call.  A van & driver met us at 8:30am at our hotel to take us to visit BYD Company Limited and then on to the SNEC for the afternoon. 

In Chinese culture, the crane is an important bird.  They represent longevity and are an omen of health and happiness.  Legend has it that an ancient Chinese immortal rode a crane to heaven. In today’s China, cranes are placed in high esteem & honor and their image is everywhere. I noticed the cranes immediately, but I’m talking about an entirely different kind of crane – the industrial kind that lifts and builds.  The Shanghai sky is full of them.  

Everything in Pudong looks shiny and new and the numerous cranes dotting the landscape portend even more development. Man, I’d like to be an architect in Shanghai! 

Buildings and communal space are creatively & beautifully designed and on a grand scale – a scale I’ve not witnessed in my lifetime.  It’s hard not to be impressed by the sheer magnitude of it all.  A port city, downtown Shanghai is split by the Huangpu River [locals call the “Pu”] with Pudong on the east (representing new China) and The Bund/Huangpu/Old Town on the west. If you follow the Pu River north it runs into the famous Yangtze River, the longest river in all of Asia, before it empties into the East China Sea.

The Huangpu River is like a busy freeway

It is obvious that Shanghai is a city alive with energy and promise.

It is also obvious that the air here is so polluted that you can not see the sunlight or blue sky during the daytime.

Our first hours in China were spent at a factory site resembling a military base full of uniform-clad laborers. The complex houses and supports 15,000 employees & managers all working on Build Your Dream (BYD) company products. For the uninitiated, BYD is a Chinese government-backed company that got its start making batteries for cell phones, and has expanded into just about everything, including cars. Indeed, it is now the number one car manufacturer in China today. Warren Buffet recently invested millions of dollars into the company and expects BYD to be a major player in the car market.  

Although BYD is known more for their lithium ion batteries, they’re also in the business of making solar modules and that’s why we were there. General Manger, A.D. Huang, and his assistants Audrey and Alice, provided an overview and conduced a tour of their solar module assembly plants.

At first, what I witnessed supported suspicion that loads of cheap labor is at the heart of all Chinese manufacturing. Watching the teeming work force, I noted they worked in unison and with purpose and I appreciated their discipline and teamwork. We were advised the quality of their work is well checked before final shipment.  John noticed pallets of finished solar panels stacked up waiting for transportation; these stacks were bound for France.

Then we were showed another section of the complex where two large factory floors were standing idle. These rooms were full of newly arrived automated machinery – so new that shrink wrap was still covering the robotics.  I noticed a couple workers testing the equipment and I spied an automated stringer, laminator, frame press, etc… sitting idle waiting for set-up and qualification.  If they implement the proper processes, this automation will require fewer workers and will allow for faster builds/improved output with much less chance for error. This is a big change in the labor-intensive processes they are using today and Audrey told us that these two newly-automated factories will be in production in about one month.  She is confident BYD will greatly increase their output and quality, and she assured us they could handle any business we brought their way. I believe her.

Later that afternoon we were escorted to the SNEC which was being hosted at the Shanghai New International Expo Center in Pudong. It is an enormous venue and a massive event. In fact, I’ve never seen a business conference so large and so energized. The massive scale of Chinese solar PV companies is both impressive and disturbing.

As I wandered the exhibit floor, I wondered … if most of the manufactured solar product is for export, why is this show so large and full of Chinese people, many from outside the Shanghai area?  John asked, why haven’t the Chinese become consumers of their own solar goods?  Of course that question has many parts in the answer, but what I heard was this … when then price gets low enough (subsidized by Europe and US markets) and the costs are well below parity with current energy source costs … then China will gobble it all up. Sound familiar?  I believe that time will come soon. With energy costs rising and more importantly, ever-increasing demand on that energy, this will happen by the end of this decade.

Following six hours of walking and talking on the exhibit floor, John and I headed over to the New Kerry Hotel for the SNEC opening reception dinner event where we sat through a four-hour, twelve-course dinner. I felt fortunate to be invited by the event organizer and manager, Madame Mi Yue, and our mutual friend, Samuel.  (Xie xie, Samuel!)

SNEC Reception & Award Dinner Event

You can easily picture the venue… classic ballroom, big stage & chandeliers, and wedding style dinner set-up on huge round tables. The master of ceremonies was a Chinese version of Wayne Newton – with a pompadour hairdo.  I didn’t understand a word the guy said, but he belted out a couple of songs between his jokes, announcements and introductions, and he was entertaining to watch. The big-shot of the evening, Martin Greene, was sitting at Madame Mi’s host table. Seemed everyone wanted their picture taken with Dr. Greene who is a well-known Australian professor at the University of New South Wales.  In Asia, he is considered a solar pioneer especially in silicon solar cell development. He has published books on solar cell technology, both for popular science and research, and has been recognized globally for his expertise. http://www.pv.unsw.edu.au/Staff/martingreen.asp.

The evening’s festivities included: traditional Chinese music, traditional and modern dance, several speeches, and the presentation of awards [for what I don’t know] which went on forever.  Some local dignitaries sought us out, glad-handed & toasted the table, then passed out their business cards.  Lots ‘n lots of business cards.  After a couple of these encounters, Samuel informed that these are economic development managers, who seek foreign companies to set-up business in their community.  It must be highly competitive! 

One guy liked me a little too much; he hugged me and back-slapped me, then asked to have our picture taken together. For the most part these were very pleasant encounters, with lots of smiles & laughs and toasting one another, and I enjoyed the evening.

Working on a third bottle of Chinese red wine while watching the evening’s entertainment, I reflected on my day-one experience.  I saw so much, and learned so much, and I felt lucky to be experiencing what many others cannot.  It was a very good day. Ahead of us are day-long stints at the SNEC, with scheduled meetings with solar companies and new business contacts, and hours of examining the vast collection of exhibits. Sure to be tiring.

One thing I am really looking forward to is Thursday night’s closing event, a boat ride and dinner cruise on the Pu River with the bright (LED) lights of Pudong and Bund in the background. 

No doubt that Shanghai looks better at night!

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Was it fate, I wonder?  When I turned on the TV tonight a movie called “Made in China” was showing on the Sundance Channel.  It is about a dreamer from Texas named Johnson who was determined to bring his big idea – a humorous domestic hygiene product – to the public.  Johnson is in love with novelties (what we call “gag gifts”) and he goes to Shanghai China to find a manufacturer for his big idea.  http://www.micthemovie.com/   Our hero narrates his story and tells viewers “today … everything is made in China”. 

Shanghai China 2011 - Pu River area

He declares “if you follow the money it all goes to China,” and concludes that is where he needs to go to fulfill his destiny. That reasoning is hard to argue in today’s world.

I was compelled to watch this movie because I’m a couple days away from doing the same thing – going to Shanghai that is.  I’m not seeking a manufacturer for my own trinket, but I am following the money and it is taking me to Shanghai and China’s Jiangsu province.  If one is in the solar business this is the place to go. The dominance of Chinese crystalline solar Photovoltaic suppliers is well established. I’m told there are over 300+ solar module manufacturing companies in China with more being born every day.

The Chinese have fully embraced the notion of a renewable energy industry

The Chinese have fully embraced the notion of a renewable energy industry, even if it all gets exported for the time being.  Indeed, that is what is happening.

I hope my experience in China is better than the hero’s journey in this movie.  Johnson had a roller coaster ride of an experience in Shanghai.  He was taken advantage of at every turn. He almost loses everything, mostly because of his own eagerness and intentions, but he never lost his spirit or the belief in his own idea.  It is his idea that makes him an inventor, and it is what makes him unique.  Woven throughout this movie were snippets about successful and even famous novelty inventors and their inventions – from Slinky to the Pet Rock.  Indeed, the movie was a kind of homage to inventors and entrepreneurs, most of them Americans.  After all, ingenuity has been one of our strengths and one of our best exports. 

Johnson asks himself in the narrative, if Americans are the creators and inventors of the modern world, then what am I doing in China?”  I may be asking myself the same thing.

Last month, one of America’s few solar manufacturing companies answered this question for themselves. Evergreen Solar announced it is closing its Massachusetts PV module factory and moving its entire manufacturing to China – affecting 800 American jobs. The Marlborough-based solar technology company said closure will come as it ramps up its production in China. The company already produces solar wafers at a company-owned plant in Wuhan, China, and said it would outsource solar panel assembly to China by the end of this year. They just couldn’t compete with Chinese operations and associated economies of scale. 

Maybe you heard the howling?!  Evergreen’s announcement was met with criticism and outrage, not just in the solar community, but across a spectrum of stakeholders.  You see Evergreen Solar received $58 million in state financing in 2007 in connection with the construction of the Devens, Mass plant. That agreement required the company to create 350 jobs and keep them for five years, or until 2012, or face having to pay back some of the funding.   In a Huffington Post article by Richard Kauffman entitled, “Has China Won the U.S. Solar War?”, Kauffman points out that “China has become the world’s largest producer of solar modules because it uses cheap labor, someone else’s technology, and ‘billions’ in subsidies to take advantage of other countries’ clean energy support programs. Hence, U.S. taxpayers are supporting Chinese manufacturing and Chinese jobs instead of creating domestic industries. “   http://www.huffingtonpost.com/richard-kauffman/has-china-won-the-ussolar_b_810992.html. 

I'm headed Far East to attend the Shanghai PV Conference (SNEC)

In my own backyard, Tigard-based Azuray Technologies Inc., a solar power electronics startup, recently announced it opened a Shanghai office in its effort to make inroads in the Chinese solar market. Their solar junction box that incorporates Azuray’s power optimizer technology will be on display next week at the SNEC International Photovoltaic Power Generation Conference and Exhibition in Shanghai.  [This is the conference I’m attending the first three days I’m in China.]  

The J-box is designed to improve the reliability and energy performance of solar modules and its display at the show in China will expose Azuray Technologies to more Chinese solar module manufacturers. Azuray said China is currently their main focus for business development.  It is a matter of fact … in business one had better be comfortable dealing with China, especially if one is interested in being in the solar industry in the future. America is putting up a little bit of a fight.  Some recent examples cited in the mainstream media are:

• Lawsuit by U.S. Steelworkers (backed by the Obama administration who filed a case against China before the World Trade Organization (WTO)
• The recent Department of Defense (DOD) “buy American” provisions for solar contractors 
• Talk of export limits on metals used in thin film photovoltaics (PV)
• Tax incentives and tariffs based upon local “Made in America” solar products

The policy prescriptions that follow from this list are obvious; (1) require domestic content if U.S. taxpayer money is being used for support, (2) restrict imports in other ways, or (3) increase subsidies to U.S. manufacturers to support and protect. So, in some people’s minds, it follows that doing business with the Chinese is somehow unpatriotic. Really? Stop and think about how much stuff you own today was made in China.  While I understand the sentiment, I’ve been in the global high-tech industry for too long to believe this, but it does give me pause.

Many commentators in America have been pointing to this as the “China Problem” … and I’m going to dive right smack into the middle of it, just like Johnson did. 

At the end of the movie, when he finally gets his meeting with Chinese textile manufacturing representatives, Johnson begins to recite his well-rehearsed product marketing speech, but he’s cut off by an English-speaking agent who tells him, “they aren’t interested in your idea, or your market, just tell them what it is you want to make.”  Message understood.  We invent stuff and create the market for this stuff, but China makes stuff and sells it back to us – this is the order of things today.  I won’t tell you what the guy’s product was, that would spoil the movie’s ending, but as he said, it was novel and necessary.  Naturally, in the end his idea was a winner because Johnson believed in his idea, and he believed in himself.  For no reason other than he had no option but to believe in himself.  That may be the truth of the story.  It is certainly one I can relate to at this juncture.

Well, I’m off to China to see for myself. 

To be continued…

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