Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 336: An Austrian economic perspective on failed Chinese wind power development

Jonas Grafström ()
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Jonas Grafström: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

Abstract: China is currently hailed as the world’s premier wind power producer. However, despite twice the installed wind power capacity compared to the United States in 2015, the Chinese installed capacity produces less power. Grid connectivity is remarkably low, Chinese firms have few international granted patents, and export is minimal even though production capacity far exceeds the domestic production needs. Using the tools of Austrian economics, failures in China's wind power development from 1980-2016 is documented and analysed. From a theoretical standpoint, both a planning problem and an entrepreneurial problem is evident where governmental policies create misallocation of resources and a hampering of technological development.

Keywords: China; Wind power; Economic Planning; Austrian school; Technology; Energy

JEL-codes: O32; P21; Q55; Q58

31 pages, August 20, 2020

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