U.S. Seals Energy Deals as Hu Arrives for Visit

Source: The Wall Street Journal, Bob Davis and Tenille Tracy  (1/19/11)

"Both sides have been sparring over clean-energy development."


The Obama administration orchestrated a series of energy-related announcements Tuesday by more than a dozen U.S. and Chinese companies, bidding to set the tone ahead of Chinese President Hu Jintao's visit to the White House. [View slide show.]

Shortly before President Hu touched down in Washington on Tuesday for meetings with President Barack Obama, U.S. and Chinese energy companies announced a variety of partnerships at a conference organized by the Brookings Institution, a Washington think tank.

Both sides have been sparring over clean-energy development. In December, the U.S. accused China of subsidizing wind-power projects and breaking World Trade Organization 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 aluminum and energy projects, both inside and outside China, which led to $7.5 billion in investments.

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

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.

U.S. 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.