China wind turbine makers blow over foreign rivals

China-based wind turbine manufacturers have overtaken foreign competitors in the race to supply domestic wind power projects for the first time – a lead that is likely to widen due to the government's controversial "buy Chinese" procurement policy.

According to figures from the state-run Chinese Wind Energy Association, domestic and Sino-foreign joint venture turbine makers accounted for 61.8 per cent of China’s market share at the end of 2008, surpassing overseas producers for the first time.

The top three wind turbine suppliers were homegrown companies Sinovel Wind, Goldwind Science & Technology and Dongfang Electric. Denmark's Vestas Wind Systems, the world's largest turbine manufacturer, maintained its fourth-ranking position from 2007, while Spain-based Gamesa fell to fifth place from third.

In 2004, foreign-made equipment accounted for 75 per cent of the Chinese wind turbine market, industry analyst Chen Hua told China's Global Times newspaper. Chen, who works for investment bank China International Capital Corp, said that lower prices likely gave domestic companies an edge.

However, Joerg Wuttke, president of the European Union Chamber of Commerce in China, has previously suggested that Chinese companies had an unfair advantage under the bidding criteria, which focused solely on the turbine unit price while excluding factors such as life cycle cost and rates of return.

Chinese manufacturers are set to expand their domestic market share even further in the coming years.

Wang Haisheng, analyst with brokerage Everbright Securities, told Global Times that he predicts domestic firms will account for 83 per cent of the wind turbine market in 2009.

Wang did not specify the factors behind the forecasted increase, but a "buy Chinese" policy issued last month will likely play a significant role. It calls for projects backed by China's $586bn (£359bn) stimulus package to seek government permission before buying foreign goods and services.