Hu Jintao’s America visit fires up US-China energy projects

The US has announced a series of deals involving several US and Chinese businesses, setting the tone before Hu Jintao’s White House visit.

Shortly before China’s President Hu touched down in Washington overnight for meetings with US President Barack Obama, US and Chinese energy companies announced a variety of partnerships at a conference organised by the Brookings Institution, a Washington think-tank. The companies included Alcoa, Duke Energy Corp, China Power Investment Corp and Shenhua Group.

Both sides have been sparring over clean-energy development. In December, the US accused China of subsidising wind-power projects and breaking World Trade Organisation rules, after the United Steelworkers union raised concerns over Chinese subsidies.

The deals were meant to show the upside of working together. Alcoa and China Power Investment Corp said they would collaborate on a broad range of aluminium and energy projects, both inside and outside China, which led to $US7.5 billion ($7.51bn) in investments.

Klaus Kleinfeld, Alcoa’s CEO, acknowledged the US-dollar value was a “very rough estimate”, but said the two companies could pool resources on investments outside China and that Alcoa could help boost CPIC’s efficiency.

“For Alcoa, the move provides entry and a closer working relationship in a market that, for a commodity like aluminium, is just booming,” said John Mothersole of I.H.S. Global Insights, a consulting firm. China, the world’s largest aluminium consumer, produces about 16 million metric tons yearly. But it has shut down some smelters to cut pollution and energy consumption, reducing output by 1.3m mt.

Mr Kleinfeld said the Hu-Obama summit helped push the deal forward. “Had the date not been set for the state visit, (the agreement) wouldn’t have happened in a speedy fashion,” he said.

US and Chinese officials have sought to collaborate on clean-energy projects for years, given both countries’ thirst for energy and heightened concerns over pollution. Some of the companies announcing deals said they would develop wind, solar and low-carbon technologies; others said they would form partnerships to jointly sell and test those products.

American Electric Power, an Ohio utility, said it would team with China Huaneng, China’s largest power-generation company, to evaluate carbon-capturing technology.

The so called validation process could be the first step toward AEP buying the technology from China Huaneng, AEP president Nick Akins said.

GE Energy announced a joint venture with China’s Shenhua Group to sell clean-coal technologies.

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