By Michael Kanellos
A consortium of Chinese and U.S. companies want to build a 600-megawatt wind farm in Texas that they say will create jobs in the U.S.
The project, which will cost an estimated $1.5 billion, will create 2,800 jobs, backers told the Wall Street Journal. Fifteen percent – or around 240 – will be in the U.S. The rest will be in China. The wind farm is being developed by a joint venture formed by Shenyang Power Group, the U.S. Renewable Energy Group and Cielo Wind Power. Shenyang will own 49 percent of the project. It will employ turbines from A-Power Generation. Jinxiang Lu is CEO of both SPG and A-Power (NASDAQ:APWR). Commercial banks in China will provide financing.
The backers will also seek stimulus funds and tax credits.
The deal is fascinating and bears worth watching for several reasons. First, the deal – like the deal between Duke Energy (NYSE:DUK) and China's ENN to build solar farms – will not just involve bringing comparatively inexpensive wind turbines or solar panels to the U.S. Chinese companies and banks will likely be actively involved in building and managing these power plants. In other words, Chinese companies will be involved in the sort of higher-value services that white-collar America craves.
Second, alternative energy appears to be China's opportunity to establish brands worldwide. Companies like Toyota (NYSE:TM), Sony (NYSE:SNE) and Toshiba (OTCPK:TOSBF) helped Japan move from a back-end manufacturer to a maker of goods in its own right. South Korea's economy was greatly enhanced when Samsung and LG became respected leaders in consumer electronics. China hasn't really had a brand yet. Many thought Haier, the electronics maker would be the first, but that hasn't happened. But in alternative energy, Suntech (NYSE:STP) is already a brand name in solar and some of the companies listed above will likely become familiar, at least in some regions in the U.S.
Don't get me wrong. I actually admire Chinese companies. The quality and ambition of the entrepreneurs behind companies in China has consistently impressed me. They also pay their CEOs less than U.S. companies. The companies behind the wind venture also wouldn't be the first international entries into the stimulus derby: Spanish and South Korean companies have received millions through U.S. joint ventures. But it is an interesting trend. In the near future, one of the best places to work might be a U.S. subsidiary of a Chinese company.