U.S. urges China to keep an open technology policy

* Concern about Chinese policy on indigenous technology

* Foreign turbine sales have fallen

HONG KONG, May 16 (Reuters) - U.S. Commerce Secretary Gary Locke urged China on Sunday to remain open to U.S. and other foreign technology as it ramps up investment in clean energy to fight global warming and secure its economy.

“China, given the incredible challenges that is has, should in my view be taking the best technology from wherever -- whether it’s China, the United States, Europe, Japan, anywhere else,” Locke said at the start of a trade mission to open doors for U.S. clean energy firms.

The United States and a number of other countries have concerns about China’s local innovation policies, which could restrict foreign participation in Chinese clean energy projects.

“We know that the Chinese have made some modifications on their latest proposals for indigenous innovation. (But) Other economies still have concern about that, and we’ll be discussing that with the Chinese,” Locke said.

“It’s more cost effective for companies and countries to seek the best technology as opposed to buying something that is not quite as good ... and a few years later having to completely revamp or purchase new technology,” Locke said.

Locke is leading a diverse group of 24 U.S. companies that include power generation manufacturing giants General Electric GE.N and Pratt & Whitney Power Systems, a division of United Technologies UTX.N.

Others are First Solar, a leading manufacturing of solar modules that last year had $2.1 billion in sales, Peabody Energy BTU.N, the world's largest private-sector coal company, and Covanta Energy Corp, which processes municipal solid waste into energy.

Beijing is pouring tens of billions of dollars into solar, wind, biomass and nuclear power projects to reduce greenhouse gas emissions blamed for global warming and to replace depleting oil and natural gas supplies.

But U.S. officials say the barriers to China’s fast-growing clean energy market can be as big as the opportunities.

Locke “will be talking about those things pretty frankly in his meetings with Chinese government officials,” a senior Commerce Department official said.

China’s National Development and Reform Commission (NDRC) is overseeing construction of a number of mega-wind farms capable of generating 10 or more gigawatts of electricity.

Alan Wolff, a Washington-based attorney for Dewey and LeBoeuf which studied China’s clean energy push for a leading U.S. business group said China had not bought a foreign turbine since 2005 for these programmes.

While foreign companies have made sales for smaller wind projects, their share of China’s total wind power equipment market has plummeted from 75 percent in 2004 to 24 percent in 2008 and could fall as low as 5 percent this year.

Locke will take the companies on Tuesday to Shanghai and later this week to Beijing, where he will join U.S. Treasury Secretary Timothy Geithner and other top U.S. officials for the annual U.S.-China Strategic and Economic Dialogue.

U.S. concerns about China’s exchange rate practices are expected to top the economic portion of the agenda. (Reporting by Doug Palmer; Editing by Matthew Jones)