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Research Report

Motor-Related Joint Ventures in China

November 1, 2004
Energy Efficiency Research
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China has a rapidly growing economy and is both a major consumer of energy and a major supplier of energy-consuming products on the world market. China is now the second largest consumer of energy in the world, behind only the United States. Furthermore, while industry represents only 28% of U.S. electricity use, in China this figure is about 70%. China's electricity use is only 40% that of the United States — 1,457 vs. 2,660 billion kWh.

China is also becoming a growing supplier of motor-related equipment to the world. For example, in 2000, China exported 528,000 compressors (excluding compressors of 0.4 kW and less) and 15,000 centrifugal blowers. Furthermore, China is a major exporter of electric motors. In 2003, China exported 1.77 million "small" motors (0.75 to 75 kW), with a value of about $200 million (U.S. $).

Given the size of the Chinese market, as well as China's low production costs, many foreign firms have invested in China. These investments range from representative offices (ROs), which help promote and market equipment in China, to joint ventures (JVs), which are a partnership between Chinese and foreign firms (with the Chinese ownership share typically ranging from as low as 5-10% to as high as 90%), to foreign-owned enterprises (FOEs), which are wholly foreign-owned firms.

The American Council for an Energy-Efficient Economy (ACEEE) has conducted research and projects for many years on both motor systems and energy efficiency in China. As part of this work, we have been increasingly asked about motor-related JVs and FOEs in China. This report is intended to answer these questions and help Chinese and U.S. and other foreign firms better understand the range of investments and products in China's motor sector. By "motor sector," we mean motors, pumps, fans, air compressors, and motor controls such as variable speed drives.

This research was sponsored by the Office of Energy Efficiency and Renewable Energy at the U.S. Department of Energy.

Research Report

Motor-Related Joint Ventures in China

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