Dialogue between Governments and Enterprises: Seek China-Thailand New Energy Cooperation

written by Li Min / Translated by Xu Yuemeng

Dialogue between Governments and Enterprises: Seek China-Thailand New Energy Cooperation

written by Li Min / Translated by Xu Yuemeng

In the market economy, the relations between governments and enterprises are turning into a hand-in-hand partnership. Strengthening the connections and cooperation between governments and enterprises may be compared to tightening the axle of the train of economic development, which enables the“train” to run more agilely and steadily. Against the background of economic globalization, the connections between governments and enterprises are no longer confined in a single country: international trade and overseas investment have prompted a growing number of Chinese enterprises to “go global”, hoping to strengthen the connections with the government of the country that they are in cooperation with. Since the construction of the China-ASEAN Free Trade Area (CAFTA), the connections between the governments and enterprises of the two sides have been established spontaneously with frequent exchanges, especially the rapid development of bilateral trade and steady growth of two-way investment.

In 2009, the first Roundtable Dialogue between the ASEAN state leaders and CEOs from Chinese enterprises was held during the 6th China-ASEAN Expo, successfully building a platform for communication between the ASEAN state leaders and Chinese entrepreneurs. In 2015, Chinese entrepreneurs were engaged in dialogue with the leaders of Thailand — the Country of Honor —during the 12th China-ASEAN Expo. During the dialogue, H.E. General Dr. Tanasak Patimapragorn, Deputy Prime Minister and Special Envoy of thePrime Minister of Thailand, and other Thai leaders shared their views with CEOs of Chinese enterprises on the issues of infrastructure construction, financial services and the development of new energy. With vigorous progress of China-Thailand railway cooperation and crossborder RMB settlement, the cooperation between China and Thailand on new energy is also anticipated.

Thailand Needs New Energy

Fossil energy -- mainly the oil, coal and natural gas -- has made great contribution to the rapid development of human civilization in the 20th century, but has caused such environmental and energy security problems as global warming and reserves reduction in the meantime. Hence, a growing number of countries are encouraging the development of new energy and increasing the ratio of new energy in their national energy structures, so as to cope with problems of insuff i cient energy and maintain sustainable development of human beings.

According to the statistics, natural gas accounts for up to 70% in Thailand’s power supply; Thailand largely depends on the import of natural gas, and national reserves of natural gas are reducing, which leads to the irrational energy structure. “Excessive reliance on a single form of energy -- even though clean energy -- will create a lot of problems, including energy security. Because of its excessive reliance on the import of energy, Thailand may face energy shortage once the production or transportation of energy in foreign countries goes wrong. Thus, Thailand has to find a new path to enrich and balance its energy structure,” said Jin Shuo, Director of Business and Economic Working Committee of China Association for International Economic & Technical Cooperation.

At the end of 2011, the Thai Cabinet passed a development plan of alternative energy submitted by the National Energy Policy Committee, including increasing the ratio of alternative energy in the energy structure to 20% from 7% in the next 10 years from 2012 to 2021. In addition, the Thai energy department expects to realize the decline of the ratio of natural gas power generation to 50% from about 70% by 2020. In fact, there is huge potential for the development of new energy in the ratio of increase and decrease.

The research report of the Kasikorn Bank shows that the Thai government is providing strong support for the investment of new energy, so as to deal with energy shortage in the future. “As for the development of new energy, Thailand values biomass power generation, for instance, the use of bagasse (sugarcane dust) and garbage to generate power. Also, the Thai government encourages the development of clean energy like solar power and wind power,” said Mr. Porametee Vimolsiri, Secretary-General of the National Economic and Social Development Board of Thailand, in 2015 Roundtable Dialogue between Thai Leaders and CEOs from China (T-C dialogue).

New Energy and “Chinese Technology”

China, a country with high energy consumption, also values the development of new energy, the consumption of which accounts for up to 20% of the total energy consumption. With the promotion of “New Energy Development Plan of China”, a batch of new energy enterprises keeps developing, not only having made their technological breakthrough, but also going abroad to look for international cooperation.

At the T-C dialogue, Zhang Shanming, General Manager of China General Nuclear Power Corporation (CGN), gave an introduction to the cooperation between CGN and Provincial Electricity Authority (PEA) of Thailand. “In 2010, wesigned a cooperation agreement with PEA. Since then, we have housed and trained about 350 engineers of PEA and also received 3,500 guests from Thailand to view and visit our nuclear power station. So far, the cooperation on nuclear energy has been embodied in the energy cooperation framework of China and Thailand. The construction of the Phase II of Guangxi Fangchenggang Nuclear Power Plant with China’s independent intellectual property rights technology is under way, and PEA will invest 10% in shares,” Zhang said.

Being the largest nuclear power reactor operator in China and the largest nuclear power contractor in the world, CGN’s cooperation with PEA is a proactive experiment on nuclear power cooperation between China and Thailand.

Apart from nuclear power, Wu Guodi, Chairman of China International Energy Group Co., Ltd. (CIEG), introduced at the T-C dialogue the peculiarity and technical superiority of China’s new energy enterprises in areas like clean energy and solar power. According to Wu Guodi, in regard to clean energy, clean gasoline processed in China is 30% cheaper than traditional gasoline, reducing emission by 50% while lowering the cost. On contract energy management, CIEG made a technological innovation: the emission of power generation by coal declined to 90% in only four years. On solar power, the photovoltaic power generation project of CIEG costs 30% lower than traditional power generation while 20% higher on ef fi ciency after technical innovation, which is very competitive in the market.

In the area of biomass power that Thailand concerns most, Chinese Technology also provides a satisfying answer. By far, Chinese power generation technology by burning waste has met the European Standards, i.e. toxic gases emitted by waste burning should not exceed 0.1 ng per cubic meter. The technology of a few top environmental enterprises even makes the emission no more than 0.01 ng per cubic meter, taking the lead in the world.

These Chinese enterprises of “Chinese technology”, which have cultivated the service capacity with a comprehensive industry chain including investment, equipment supply and general contractor, can provide services for Thailand and other countries that expect to develop new energy, and strive to seek larger space for development while going abroad.

Enhance Dialogue between Governments and Enterprises, Seek China-Thailand New Energy Cooperation

Supply and demand is the premise for cooperation, and mutual trust is the foundation. At the T-C dialogue, Thai leaders and CEOs from China sincerely share their major concerns and confusions with each other, clarifying the direction of cooperation and strengthening mutual trust, which lays a sound foundation for carrying out cooperation on new energy.

Regarding nuclear power cooperation, Deputy Prime Minister Tanasak responded frankly, “In fact, Thailand is looking forward to clean energy development, but not all Thai citizens are familiar with nuclear power generation. So we need more time for explanation, but it has been listed in the nearly issued energy program.” With the growing acceptance of Thai citizens towards and the gradual development of nuclear power generation in Thailand, prospects for cooperation between China and Thailand in this area are bright. Tanasak sincerely invited CGN, CIEG and other Chinese new energy enterprises to invest in Thailand, “because the opportunity waits for no one”.

Ms. Ajarin Pattanapanchai, Secretary-General of the Board of Investment of Thailand, showed Chinese enterprises Thailand’s willingness for cooperation by introducing the preferential policies for new energy industries. “We have formulated some preferential policies, providing 8-year tariff and income tax reduction and exemption to cut the cost of enterprises’ investment on the one hand, and offering services from the Board of Investment to and choosing the most suitable partners for enterprises coming to invest in new energy industries in Thailand on the other hand,” said Ajarin Pattanapanchai.

The Thai leaders place emphasis on the development of new energy industries, because of which the new energy industries in Thailand are on the rise. Besides, the introduction given by the Thai leaders at the T-C dialogue can be regarded as a warm welcome to Chinese enterprises from Thailand’s new energy industries. In addition, in new energy,“Chinese technology” continues to blossom, and Chinese enterprises with advanced Chinese technology can thus make use of the platforms like the China-ASEAN Expo to enhance communication with Thailand’s departments and engage in in-depth discussion and consultation on specific cooperation projects to strengthen mutual trust, seeking practical cooperation between China and Thailand on new energy.