By Angelina Ricci, Senior Account Manager, Edelman China – Shanghai
For the past few years, investors have taken full advantage of China’s red-hot clean tech industry. By getting involved in the middle and later stages of the industry boom, many investors were able to recover their capital in three years or less by listing their companies. However, with the recent industry cool-down, clean tech companies must do a lot more than just “show up” these days to remain profitable in the stiffly competitive market in China.
Spurred by a flagging global economy and looming implications of the current U.S.-led solar trade dispute, Chinese clean tech manufacturing companies are dealing with major supply gluts and many are reeling from resulting price wars. Not surprisingly, short-term investment in clean tech has become increasingly conservative, as have forecasts about the industry’s future.
However, as stated in its 12th Five-Year Plan, the Chinese government avowed its support for greater investment in new energy, energy conservation, environmental protection and clean energy vehicles. This means clean tech applications will become increasingly important as the government puts its money where its mouth is and more state-owned enterprises and local governments fall in line. In fact, just this week the State Energy Administration announced its goal of supporting the development of a total of 30,000 MW of offshore wind capacity by 2020; compared to the 1380 MW of offshore wind power currently installed. And as regular Chinese citizens grow increasingly concerned about air quality and environmental issues, it’s safe to assume the best days for clean tech in China are ahead of us, not behind us.
While there is no magic formula to determine which companies will emerge victorious from the current industry shakeup, a strong communications plan is often just as critical as a strong balance sheet and continued R&D when it comes to maintaining investor and consumer confidence.
With every difficult period comes an opportunity for companies to shape the narrative—reaffirming leadership in an embattled industry, communicating the record-low cost for clean tech products, and illuminating exactly how they contribute to China’s sustainable development while aligning with government priorities and contributing to its communities. Edelman’s China offices are using their unique perspective to help both domestic and global companies do just that—uncovering and telling a bigger story to the audiences that matter most.