Chinese cleantech firms outperforming U.S. and Europe

BEIJING (Reuters) - China has outperformed Western countries in new energy and other clean technologies thanks to its focus on commercialization, rather than the technology itself, said Melissa Guzy, China managing director of VantagePoint Venture Partners (VPVP).

"In China there is a very practical view of investment in companies in the private sector, and that is also how the public sector views new technology and its implementation," she told Reuters in an interview in Beijing during the launch of VPVP's new China Low Carbon Index (www.chinalowcarbonindex.org/).

The index was launched in collaboration with the China Beijing Environmental Exchange and tracked the performance of a range of listed Chinese cleantech companies, and they had generally outperformed the market as a whole, she said.

"We looked at it versus the Shanghai Stock Exchange, the Hang Seng Index and Nasdaq, and not surprisingly, it has outperformed. There were two very good periods in 2007 and 2009. In 2008, markets pulled back very dramatically but generally it did outperform."

"The reason they are outperforming is that they are taking technology and turning it into profit. It should be a lesson for U.S. companies that it is not only about technology but also about commercialization."

Guzy said the index would serve as a "benchmark" highlighting the growing strength of China's clean energy and technology sector, but the next phase would be the development of "investable products," first through the introduction of specialized Qualified Domestic Institutional Investor (QDII) or Qualified Foreign Institutional Investor (QFII) funds.

A number of U.S. companies involved in clean energy have complained that the tough regulatory environment at home was making it difficult to compete when it came to rolling out new technologies like carbon capture or coal gasification, but Guzy said investors themselves might need to change their approach.

She said investors in the United States had tended to focus on "the attempt to leapfrog" by taking punts on potentially revolutionary but largely untested technologies, while China had focused on what had already been proven.

"The approach that China is taking is having demonstration projects, trying new technology but having proven technology alongside it, and moving along a path of adoption rather than trying to leapfrog -- it is an interesting difference."

(Reporting by David Stanway; Editing by Chris Lewis)