State-owned oil giants dig into new energy

• Source: Global Times
• [09:07 November 17 2009]
• Comments

The oil companies' move is in accordance with the government's policy to develop new energy vehicles, and their participation would speed up the advancement of new energy automobiles, according to Cao Xiaoxi, an engineer at the Research Institute of Economy and Technology at Sinopec.

China launched a stimulus plan to boost the automobile industry in February, aiming to produce 500,000 purely electric power automobiles, plug-in hybrids and normal hybrids in three years, accounting for 5 percent of the car market.

However, Anbound's Wang expressed worries over the State-owned oil giants' partici-pation.

He said their involvement might lead to a monopoly in the new energy industry, which would hinder the development of private companies.

State-owned oil companies can easily get government policy and financial support, but they lack the impetus of technology innovation compared with SMEs, which contribute a lot to research and development, Shi Yuanchun, academician at the Chinese Academy of Sciences, told the Economic Information Daily.

We have been able to produce world-class technology in the bio-energy field without much government investment, said Chen Yilong, chairman of Wuhan Kaidi Holding Investment, a hi-tech investment joint venture.
Chen said that the lack of government support drove his company overseas to seek investment partners.