ADB Pathfinder Climate South-South Cooperation Chinese Enterprises Still Take a Wait-and-see Approach

"China is the key point of South-South cooperation. Only China has the ability to absorb advanced technologies, form a market scale, and ultimately reduce costs." Kuang Yongping, chief energy expert at the Asian Development Bank, told this reporter.

In Yong Yongping’s view, how to achieve the grafting of South-North cooperation and South-South cooperation can capture China or India and other countries with large markets. Because such countries with large markets and production capacity can be successful as intermediate platforms for transfer.

"Only such a technology transfer is effective." Yongping Yong said that in more than two decades of work practice, he has seen too many failed technology transfers.

The transfer of south-north (developed countries to China and India and other major countries) and South-South cooperation may be a roadblock for technology transfer. Among them, the Asian Development Bank is already in the process of discussing the model of South-South cooperation. That is, the South Korean Know-how Transfer (SSKT) program of the GMS has started.

North-South Technology Transfer Bridge:

Countries with large markets

In climate negotiations, North-South technology transfer has always been an important demand of developing countries.

Recently, Yu Jianhua, director of the International Department of the Ministry of Commerce, publicly stated that at present, 76% of global technology transfer takes place between the Organization for Economic Co-operation and Development (OECD), and the transfer of technology between North and South accounts for only 4%. Such figures prove that the scale of North-South cooperation is worrying at present.

At the same time, the quality of North-South cooperation in the eyes of Yong-Ping Yong also looks very worried. He used the example of the Asian Development Bank’s solar power project on an island in the Philippines as an example: “A total investment of 500,000 Euros will provide 8.7 million hours of electricity each day, and 87 degrees of electricity will be used by 250 families on the island.”

500,000 euros does not include the maintenance cost of this equipment from Belgium. The exchange of solar modules costs 9 million pesos, 3 million pesos for battery replacement, and 2 million pesos for replacing the anti-theft device. The life span of these parts is 10-25 years. In this way, plus the existing import and export tariffs and other expenses, the price of 1 kWh for local residents is 1 US dollar.

“Expensive prices have resulted in only 130 homes on the island that have chosen to connect to the grid. The average monthly electricity consumption of each household is 2.7 degrees. If the public electricity is removed, only 1.2 kWh will be used per household per month,” said Yongping Yong. .

In fact, North-South technology transfer has entered a stalemate: poor applicability of equipment in the local area, expensive and restrictive patent fees, and high maintenance costs.

Among them, the most insurmountable obstacle is the huge amount of patent fees. Bing Yongping even considers that it is specifically to help developing countries pay for this patent fee, but this method is still "a temporary solution."

In his view, the "South" in the North-South transfer can currently only be in the "BRIC countries" (China, India, Brazil, Russia) and the "11 countries in the future" (Bangladesh, Egypt, Indonesia, Iran, Korea, Mexico). In Nigeria, Pakistan, the Philippines, Turkey, and Vietnam). However, some developing small countries can only rely on South-South cooperation. That is, countries that must rely on large markets have formed a shift in the gap.

“China has advantages in many civilian low-carbon technologies, technologies are applicable, prices are low, and such technologies are very competitive in most developing countries.” Yongping Yong told reporters, such as biogas, wind energy, solar energy and other fields, China has a huge market and strong manufacturing capabilities.

As for the issue of intellectual property rights in the South-South transfer, Biao Yongping said: "Sometimes it may not involve the transfer of intellectual property rights, but only industrial transfer. As long as technology is not high-end, we can carry out production transfer."

Greater Mekong Subregion

SSKT start

South-South cooperation, ADB has begun to explore the corresponding model.

According to this reporter’s report, the Asian Development Bank launched a pilot project for low-carbon technology transfer in the Greater Mekong Subregion, which has now reached the project tender stage. The pilot includes a total of six countries and regions: Cambodia, Myanmar, Laos, Thailand, Vietnam and China's Yunnan Province and Guangxi Province.

Zhai Yongping told reporters that the reason why he chose to conduct in the Greater Mekong Subregion is mainly because: The six countries basically represent the three major challenges facing developing countries.

The first is the survival challenge. For example, in Myanmar and Cambodia, most residents have not used electricity. Second, countries that face low-carbon development difficulties, such as Vietnam and Laos, have low carbon emissions. However, due to the lack of corresponding technologies, they are inevitably moving towards a path of high carbon development.

In addition, in countries such as China and Thailand, the two countries have relatively high development strength and the residents' electricity rate has reached 99%. At the same time, its per capita carbon emissions and unit GDP emissions are also the highest among the six countries.

“Zhongtai is precisely a good platform for technology transfer and technology export.” Zhai Yongping said that the SSKT pilot program in the Greater Mekong Subregion is also falling within the ASEAN Free Trade Area.

It is reported that the pilot program includes: setting targets for improving people's livelihood and reducing energy poverty in the region (100% of the population will be fully energized by 2020). Currently, the electricity rate of residents in Laos is 55%, Cambodia is only 24%, and Myanmar is only 13%. In Yongping's view, this market is self-evident.

Second, assess the resource potential of new energy sources in GMS countries, and draw a map of new energy resources in the region as a basis for corporate investment. At the same time, technical assessments will be conducted to establish new energy development goals in the region and the necessary skills transfer to achieve these goals.

In addition, the “business model” for the transfer of new energy technologies will be established to clarify the role of government and enterprises in it. For the transfer and application of various new energy technologies, establish a skills transfer model for South-South cooperation.

In terms of specific implementation, Yongping Yong said that ADB will at least fund the establishment of five special pilot projects. “The location is definitely in Vietnam, Cambodia and Laos. As long as it is suitable for the people to use new energy technologies, such as biogas, small hydropower, small Wind power and solar energy and other civil energy-saving technologies and equipment.

Market outlook has not attracted attention

Although ADB has spotlighted the market prospects for South-South cooperation, it has not caused widespread industry interest.

It is reported that ADB has just approved a start-up capital of US$1 million in mid-November and will recruit consulting companies to assist the countries in the Mekong River to implement pilot projects in the next six months for a period of two years.

This 1 million is mainly used to establish a technology exchange platform and do technical evaluation. Zhai Yongping said: "Probably we will provide 20,000 to 300,000 yuan to do special pilot projects. These projects are completely free, just to prove the feasibility of such a technology transfer model."

"After one million has spent, further down will require the involvement of companies. This project will start bidding in the first half of next year, hoping to establish a perfect market model in 2-3 years." Yan Yongping said.

However, what persuaded Zang Yongping is that currently there is not enough involvement from companies, especially Chinese companies.

In fact, in this model, as far as companies in Thailand and China are concerned, the output is a medium-to-low-end technology that can be used, and does not require core technologies. Because the core technology is also useless for Myanmar, Cambodia and other countries, it is not necessary.

"The market can be profitable." Zhai Yongping said that China's new energy companies have not been interested in it, first, because many companies do not realize that the low-end technology can be exported; Second, many companies believe that is to do charity, is Technical donation.

"Currently there may not be a large-scale market for companies to do. But such a project can make one country into six," Zhai Yongping said bluntly. "In the long run, the market and the cost are very attractive. I think the company may In this regard, we must have more strategic vision."

He Yongping said that if this model is successful, ADB would like to continue its promotion to South Asia. The local government and the ADB will follow up on the scale of loans.

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