Business Insight Zone

Suntech Power Holdings offers a window into the promise and peril of China’s business future. On the plus side, the maker of photovoltaic (PV) solar cells is a fine example of the business savvy that has allowed Chinese entrepreneurs to build cutting-edge industries from the ground up in recent years. This success benefits not just Chinese firms, but the entire global economy. When Suntech founder Zhengrong Shi took his company public late in 2005, he did it not on a domestic bourse, but on the New York Stock Exchange. Since then, US IPOs have come from a slew of other Chinese PV firms, including China Sunergy, JA Solar, LDK Solar, Yingli Green Energy, and the curiously named Canadian Solar. Starting more or less from scratch a few years ago, these companies have built a sizeable PV industry in China.

But, like many of its PV brethren, Suntech makes most of its money abroad, especially in Germany, because the market for clean energy in China is not yet well developed. This is bad news environmentally: the rapid growth in China’s industrial and consumer markets means that the Middle Kingdom is outstripping even the US in emissions of carbon dioxide and other greenhouse gases. To keep up with its exploding commercial growth, the country is building coal-fired power plants at a breakneck pace. Set aside potential threats associated with global warming, and China’s worsening pollution is still an economic drag, since more pollution means more productivity lost to illness. Although the country’s leaders understand the environmental challenges facing them, they must also satisfy the energy demands of a population increasingly accustomed to Western-style electricity consumption. Here’s hoping that sooner rather than later they’ll turn to the vibrant home-grown market for solar power that Zhengrong Shi and his cohorts have been building.

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* This article originally ran on the Hoover’s site on 1 August 2007.

Category: Company of the Day, Green & Clean