Chinese farmers are leaving it to the philosophers to decide who came first, the chicken or the egg. While waiting for the answer [and collecting the eggs], another side-product of poultry has captured their interest: excrement… 

Building on a growing body of regulation, capital inflow and international cooperation, farmers are increasingly turning their attention to the development of rural energy. More than 105 national standards - including “domestic biogas stoves”, “household biogas lamps” or “technology rules of biogas fermentation for houseold in rural areas” - have been passed, signalling a keen interest from the government. Close to USD 1 billion has been poured in renewable rural energy in the past few years.

Biogas figures proeminently in the drive to make the best from one’s local environment. More than 30 million biogas tanks have been installed in households. They even sometimes come with biomass stoves, which not only improve the “fuel” efficiency bur also reduce CO2 emission.

Why not hold the next global climate talks in the Chinese countryside?

The Chinese government has recently approved a strain of genetically engineered rice - an important step in becoming the first country producing biotech rice commercially. Following international safety concerns, China had stopped the commercialization of new GM varieties in 2000 - more than 100 GM rice varieties remained in field testing.

It is no secret that China has significantly invested  in genetically modified organisms (GMOs) in the past 20 years. Not surprisingly, the emphasis has been on improving the output, quality and resistance of rice varieties - China produces 31% of the world’s rice and 20% of its corn but only has 7% of the world’s arable land.

A recent survey in China has shown that more than half of the respondents ignored they were buying transgenic produce. While this seemed to cause few problems for most food, GM rice appears much more controversial in China. Issues ranging from the impact on farmers’ income to China’s agriculture technological trajectories are debated in the chatrooms with, seemingly, little political interference. This is good news: GM deserve a broad discussion among all strands of society.

Ever heard of BGI? The Beijing Genomics Institute (BGI) is, according to Nature, China’s premier genome-sequencing institute. Using the formula for goods, BGI uses a cheap (and increasingly qualified) workforce, coupled with high-end imported equipment. The value proposition? Work twice as fast and for half the price.

While China has become the world’s factory for pretty much everything, BGI intends to create a genomic tree of life covering the major evolutionary branches of plants, animals and humans. After having sequenced the genome of indica rice, cucumber, chicken, silkworm and of the giant panda, the institute is now looking into other big cats (lion, tiger and leopard). Besides these noble scientific endavours, it also works on identifying genes critical in the development of cancers.

Genomic sequencing remains a capital intensive business and governments may not share (or fund) BGI’s ambition to sequence everything. In the long-run, the survival of BGI will depend on how much firms (e.g. pharmas) and research centers will be willing to outsource their genomic sequencing. If BGI’s business model prevails, watch out for genomes turning into commodities.

23 billion text messages sent during the Chinese New Year holiday. 13 billion for the sole New Year’s day and eve. 1.33 billion MMS. Chinese mobile users have once again broken the previous year’s record.

The popularity of SMS is so great that operators actually had to restrict the number of text messages sent. The limit of 200 messages within an hour (or 1,000 within a day) has been extended to 500 per hour (or 2,000 per day) for holidays and week-ends - the agreement is mainly intended to combat spams.

The SMS craze is even endorsed by top-level officials. Bo Xilai, party chief of Chongqing, has reportedly sent a message bearing quotes from Mao Zedong (known as red-texting) to 3 million users in April 2009. In the end it really comes down to deciding what counts as spam…

Smartgrid, intelligrid, futuregrid, there seems to be no boundary to naming the next generation of electrivity grids. No limit on the amount spent either: China is preparing to invest USD 7.3 billion in smart grid technology - more than on power generation - in 2010. Even if the investment comes as a fiscal stimulus, it may propel China on the course of technological innovation in yet another sector.

Akin to telecommunications where wireless has bypassed wireline in many developing countries, China will leapfrog the current generation of electricity grids and go directly “smart” for new infrastructures - the plan is to have a smart grid operational at the national level by 2020.

Re-designing an entire electricity network comes with an incredible number of challenges but, like in telecommunications, it will give China the opportunity to re-think technology [almost] from scratch. Get ready for another war on standards…

“Middle East countries have oil, and China has rare earths. Let us export rare earths to increase our foreign exchange reserves.”
Deng Xiaoping

Yttrium, lanthanum, neodymium, promethium…. While not part of your daily vocabulary you will certainly find these rare earth elements (REE) in your close environment: wind turbines, iPods, hybrid vehicles, the list of high-tech applications using REE seems without an end.

The bad news? Since the turn of the century, China controls close to 95% of the world’s REE production and possesses 50% of the world’s reserves. There is even a Rare Earth Industry Development Plan.  The Chinese government has imposed increasing export duties and quotas on the rare earths industry. There are even some rumours that the most valuable of these elements will be prohibited from leaving China or restricted to companies located on its soil.

The good news? Europe, Japan and the United States seem to have suddenly woken up to the strategic nature of REE and, akin to oil, are considering setting up strategic reserves. In addition, rare earths are not as rare as their name suggests. Alternative supply sources exist (e.g. in Vietnam or Australia) so in the end it may just be a question of pricing.

Will Chinese high-tech firms take incumbents multinationals by storm? Not impossible if one is to believe Zeng and Williamson, authors of “Dragons at your door: how Chinese cost innovation is disrupting global competition“.

The authors’ central argument is that China’s real competitive edge is not [only] low cost but rather cost innovation. Chinese companies leverage low-cost R&D resources to deliver high-technology at mass-market prices by focusing on process innovation to breathe new life in technologies that Western companies have written off as obsolete or uneconomical, by developing innovative products at a fraction of the cost of their global competitors by recombining existing technologies in new ways, by riding the wave of open architecture to bypass traditional barriers to innovation, and by successfully rendering established Western competitors’ assets and experience obsolete by betting on low-cost, alternative technologies.

A number of questions come to mind:
- Can Chinese firms apply the [product] cost innovation to services?
- How much does cost innovation allow Chinese firms to be innovative?

Not need to look further than Huawei to have the beginning of an answer…

The January 2010 issue of Nature features the results of the giant panda sequencing. More than 120 researchers scattered across the world are credited with the first reported de novo assembly of a large mammalian genome achieved using next-generation sequencing methods.

The research was conducted on Jinging — the female Beijing Olympics mascot. The genome consists of some 2.4 billion DNA base pairs. The high genomic diversity found in the sequence offers encouraging signs for keeping the species from extinction - only 2500 giants panda survive. The research has also uncovered that the panda has all the genes needed for a carnivorous digestive system but lacks digestive cellulase genes. Taste may also be a diet-limiting factor - pandas may not experience the umami taste associated with high-protein foods. In other words, the bamboo diet might be more dependent on its gut microbiome than its own genetic composition.

The researchers hope that, beside having now a better understanding of the Panda, their work will promote the construction of reference sequences for other animal and plant genomes in an efficient and cost-effective way.

The brief outage of the Great Firewall which took place at the beginning of January and allowed Chinese netizens to freely access banned Web sites - many foreign websites like YouTube, Facebook, Blogger or Picasa were blocked at the end of 2008 as a part of an anti-pornography campaign - is a reminder of the strong lid that the government maintains over the Internet in China.

That said, in spite of the sophisticated systems put in place by the government, some netizens are still able to use some of the banned communication media. There is no better example than Chen Yunfei, a writer and activist, who on New Year’s eve twitted from a policy station in Chengdu where is was held.  

In other words, not everybody is moving from the Web 2.0 to 3.0 at the same speed. Some countries - China housing for now and the foreseeable future the largest number of netizens in the world - actually seem to go backwards or at least sideways. Whether or not this will prevent citizens to communicate is another question: according to a report from the Chinese Academy of Social Sciences (CASS) among the top 77 incident that attracted wide attention in Chinese society, in 30% of the cases it was postings on the web that attracted great popular attention to the incidents.

A-B-C,  one-two-three… With this simple line you are basically looking at the future of large commercial aicrafts: Airbus, Boeing and soon Comac hope to share equally the market for 170-190 seater aircrafts.

The C919 - the number 9 stands for long-lasting - will be produced by the Commercial Aircraft Corporation of China. Comac was set up in 2008 to develop a large Chinese airplaine. It already markets the ARJ21, the country’s first regional jet. This time the focus is a bit different since the aim is not to conquer the domestic market but to compete with the Airbus 320 and Boeing 737 on international markets.

Akin to what happens in many other industries, the aim is to develop a new aircraft with as much Chinese intellectual property as possible. So far, a lot is borrowed from technologies developed abroad. For instance, the ARJ21 is built using tooling originally provided by McDonnell Douglas. Likewise the C919 will benefit from European and American technologies as Safran (a French company) and GE have entered a JV agreement to build the engine.

So will the C919 seal the end of the duopoly? Not in the short term at least. In the first years Comac’s production capacity will hardly be able to serve the growing demand for domestic aircrafts - it expects to sell 2000 units over 20 years with an estimated demand of 4000 planes for the same period. In addition, the first pilot flight is scheduled for 2014 and the commercial version is expected in 2016.

So, it will probably take a bit longer until Air France or British Airways order their first C919!