Star­tups re­turn to China to battle pol­lu­tion

Some Chi­nese en­trepreneurs in Sil­i­con Val­ley are re­turn­ing to their home coun­try to launch star­tups fo­cus­ing on one of China’s big­gest prob­lems — air pol­lu­tion, es­pe­cially smog, Lia Zhu re­ports from San Fran­cisco.

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When a ma­jor sand storm hit Bei­jing 15 years ago, Carl Wang was shocked to see the sky turn or­ange while sit­ting in his high school class­room. The bad air qual­ity caused by the storm would play a ma­jor role in putting him on a path to be­come an en­vi­ron­men­tal en­gi­neer. Now, pol­lu­tion in his home­town of Bei­jing has wors­ened and will help de­ter­mine his path back in China.

More than 10 years af­ter that in­ci­dent, Wang got his doc­tor­ate in the United States, and is an ex­pert on air qual­ity mon­i­tor­ing/mod­el­ing and air pol­lu­tion con­trol at En­vi­ron­men­tal Re­sources Man­age­ment, a con­sult­ing firm in the San Fran­cisco Bay Area.

Wang and the six other mem­bers of his team, all ex­perts in com­put­ers, the en­vi­ron­ment or fi­nance in Cal­i­for­nia’s Sil­i­con Val­ley, ex­pect to re­turn to China in the sec­ond half of this year to launch their en­vi­ron­men­tal startup: GAGO Inc. “Now is the most fa­vor­able time to launch our startup. We can’t miss it,” Wang told China Daily.

Next month, the soft­ware they de­vel­oped, called “GAGO Smog Map”, which pro­vides real-time up­dates of smog lev­els and three to five days of fore­casts, will be avail­able to cus­tomers in China. “With this soft­ware, users will be able to check the smog level of any place in China with their smartphones,” Wang said. “So they can make bet­ter de­ci­sions for travel.”

Wang will be join­ing other Chi­nese who have re­turned to China from the United States to launch a startup. There are no de­fin­i­tive num­bers on how many star­tups cre­ated by Chi­nese in the US have done so, but Wang, Kai Sun and Char­lotte Wang (no re­la­tion to Carl Wang) are three en­trepreneurs fo­cus­ing on one of China’s most press­ing prob­lems: air pol­lu­tion, es­pe­cially smog.

Tack­ling health-harm­ing smog has be­come a ma­jor ini­tia­tive of the cen­tral gov­ern­ment. In Jan­uary 2014, China, for the first time, in­cluded health-threat­en­ing smog in its 2013 nat­u­ral dis­as­ter re­port.

In re­sponse to large-scale smog cov­er­ing the ro­bust Yangtze River Delta, Pearl River Delta and es­pe­cially the Bei­jing-Tian­jin-He­bei clus­ter in North China, the cen­tral gov­ern­ment adopted the Air Pol­lu­tion Pre­ven­tion and Con­trol Ac­tion Plan in Septem­ber 2013. It is be­lieved to be the strictest pol­lu­tion con­trol mea­sure as the gov­ern­ment vows to bring “vis­i­ble changes” to air qual­ity by the end of 2017.

Sta­tions have been built in 161 cities to mon­i­tor smog lev­els to raise the public’s self-pro­tec­tion aware­ness and en­hance the gov­ern­ment’s sense of re­spon­si­bil­ity, Chi­nese Pre­mier Li Ke­qiang told re­porters at the con­clu­sion of this year’s Na­tional Peo­ple’s Congress.

“We cer­tainly feel the pres­sure,” said an at­mo­spheric ex­pert with a Shang­hai en­vi­ron­men­tal mon­i­tor­ing agency who re­quested anonymity. “We have never re­ceived so much at­ten­tion un­til smog be­came a key word in 2013.”

And more than ever, the Chi­nese public is fo­cus­ing on smog. In March a pri­vately spon­sored doc­u­men­tary on smog, Un­der the Dome, went vi­ral on­line in China. It was viewed more than 300 mil­lion times within five days.

“Of the 9.6-mil­lion-square-kilo­me­ters of China’s ter­ri­tory, 5 mil­lion are cov­ered with smog,” Wang said. “I have fam­i­lies and friends there. I feel sad for them. I would not for­give my­self if I didn’t do some­thing now.” It is not just smog

But it’s not just smog. Ac­cord­ing to a 2013 en­vi­ron­men­tal re­port by the Asia Devel­op­ment Bank, seven of the world’s 10 most-pol­luted cities were in China and among the 500 largest Chi­nese cities, only five were con­sid­ered at a safe level based on World Health Or­ga­ni­za­tion air qual­ity guide­lines.

Sun, founder and chief sci­en­tist of He-Sai Pho­ton­ics Tech­nolo­gies, and his two part­ners took their startup from Sil­i­con Val­ley to Shang­hai last Oc­to­ber. They de­sign and man­u­fac­ture on­line gas an­a­lyz­ers that can mon­i­tor mixed gas com­po­si­tion at a higher speed and with more pre­ci­sion than ex­ist­ing tech­nolo­gies.

“The tech­ni­cal gap be­tween China and the US is di­min­ish­ing. The sooner we come back, the ear­lier we can bring our tech­nol­ogy into play,” he said. “We ex­pect to de­liver the first prod­ucts to our clients next month and begin man­u­fac­tur­ing in the sec­ond half of this year.”

En­ergy con­ser­va­tion is as im­por­tant as find­ing the source of pol­lu­tion. Last Oc­to­ber, Char­lotte Wang’s startup – Equota En­ergy – re­turned to China and launched in Shang­hai. The com­pany’s tech­nol­ogy aims to help heavy in­dus­tries, like steel plants, to op­ti­mize power con­sump­tion to re­duce car­bon emis­sions. By col­lect­ing data from smart me­ters, they can pro­vide anal­y­sis and as­sess­ments based on al­go­rithms that they have de­vel­oped.

“This tech­nol­ogy is avail­able in the US but not in China yet. What we are do­ing now is lo­cal­iz­ing the soft­ware for our cus­tomers,” she said. Their cus­tomers in­clude industrial parks, and fac­to­ries and com­mer­cial build­ings like depart­ment stores and ho­tels.

One cus­tomer, a steel plant in East China, has saved $1 mil­lion on en­ergy-re­lated costs and re­al­ized a re­duc­tion equal to 5,000 tons of coal within six months.

Carl Wang and his team de­vel­oped their soft­ware last year based on satel­lite re­mote sens­ing data. Through anal­y­sis of the big data, they can cal­cu­late the den­sity of PM2.5, a ma­jor con­trib­u­tor to the smog in Bei­jing, and then con­vert the smog lev­els into a map.

PM2.5, or par­tic­u­late mat­ter with a di­am­e­ter of 2.5 mi­crons or less, is small enough to pen­e­trate deep into the lungs and blood streams un­fil­tered and cause re­s­pi­ra­tory and car­dio­vas­cu­lar dis­eases. It is also of­ten as­so­ci­ated with toxic sub­stances like heavy met­als or poly­cyclic aro­matic hy­dro­car­bons.

Wang said his team has been in talks with a few gov­ern­ment agen­cies at pro­vin­cial or city lev­els to build an air-qual­ity mon­i­tor­ing data plat­form. “A vi­su­al­ized map is the first step. We plan to de­velop more prac­ti­cal prod­ucts, like travel guide­lines for ur­ban res­i­dents, vi­su­al­iza­tion tools for en­vi­ron­men­tal pro­fes­sion­als, or data anal­y­sis for en­ter­prises or gov­ern­ment agen­cies,” Wang said.

Sun’s prod­ucts in­clude gas an­a­lyz­ers and PM2.5 sen­sors, which can be used in such ar­eas as at­mo­spheric en­vi­ron­men­tal mon­i­tor­ing, industrial process con­trol and mon­i­tor­ing, as well as the de­tec­tion of haz­ardous gas leak­age. The equip­ment can be in­stalled in buses or taxis, and when the ve­hi­cle is run­ning the gas an­a­lyzer mea­sures the data of the lo­cal air and up­loads it to a net­work ter­mi­nal so en­vi­ron­men­tal agen­cies can de­ter­mine the source of the pol­lu­tion, he said.

The prod­ucts’ core tech­nolo­gies, in­clud­ing laser scat­ter­ing and ab­sorp­tion spec­troscopy, orig­i­nated from the high tem­per­a­ture gas dy­nam­ics lab­o­ra­tory at Stan­ford Uni­ver­sity where Sun re­ceived his PhD in me­chan­i­cal en­gi­neer­ing and worked as a re­search as­so­ciate be­fore he re­turned to China.

“Our gas an­a­lyz­ers can mon­i­tor emis­sions at fac­tory plume sites to en­sure their emis­sions are within reg­u­la­tions. They can also mea­sure the con­cen­tra­tion of PM 2.5 suspended par­tic­u­late in the air at lo­cal lev­els,” Sun said. “Build­ing a mon­i­tor­ing sta­tion usu­ally costs mil­lions of yuan and it is ef­fec­tive only within a cer­tain area. Our por­ta­ble equip­ment costs only one-tenth of the sim­i­lar prod­uct and it does not need main­te­nance, ei­ther.” Re­turn to China

Like Sun, the two other young men on his team also quit their re­cent jobs in Sil­i­con Val­ley and re­turned to China. The chief tech­nol­ogy of­fi­cer, with a dual mas­ter’s de­gree in me­chan­i­cal en­gi­neer­ing and elec­tri­cal en­gi­neer­ing from Stan­ford, had worked at Ap­ple Inc in charge of iPhone elec­tri­cal-cir­cuit sys­tem de­sign. The CEO, with a PhD in ro­bot­ics and pat­tern recog­ni­tion from the Uni­ver­sity of Illi­nois at Ur­bana-Cham­paign, had worked at West­ern Dig­tal.

“The job is sta­ble and the life is com­fort­able [in the US], but the ca­reer po­ten­tial is limited,” said Sun. “In a big firm, we are re­spon­si­ble for only a tiny part of the whole op­er­a­tion, but in our own startup, we have the power to con­trol the com­pany’s di­rec­tion, and maybe the di­rec­tion of the en­tire in­dus­try. What’s more, we would feel a bet­ter sense of ac­com­plish­ment if our knowl­edge and tech­nol­ogy can ben­e­fit our home­land and peo­ple.”

What at­tracts the Sil­i­con Val­ley en­trepreneurs is not only the ca­reer po­ten­tial but China’s huge mar­ket. How­ever, China’s tech­nolo­gies in such ar­eas lag be­hind and an ef­fec­tive in­stru­ment takes years of de­sign and testing, so China’s en­vi­ron­men­tal agen­cies have to pur­chase mon­i­tor­ing equip­ment from for­eign com­pa­nies, such as the US multi­na­tional Thermo Fisher, which has built a sub­stan­tial pres­ence in the Chi­nese mar­ket, ac­cord­ing to Sun.

China’s new en­vi­ron­men­tal pro­tec­tion law, which be­came ef­fec­tive on Jan 1, is con­sid­ered the strong­est ever.

It re­places lim­its on fines for pol­lut­ing fac­to­ries with daily fines un­til the pol­lu­tion stops. Un­der the amended law, lo­cal of­fi­cials may be de­moted or sacked if found guilty of cov­er­ing up pol­lu­tion or other en­vi­ron­ment-re­lated wrong­do­ing.

En­vi­ron­men­tal au­thor­i­ties also have more power to de­tain man­agers of pol­lut­ing fac­to­ries for 15 days if they don’t com­plete en­vi­ron­men­tal im­pact as­sess­ments or their plants con­tinue to pol­lute de­spite warn­ings. The law also stip­u­lates that of­fend­ers will be held crim­i­nally accountable for their be­hav­ior.

Since tak­ing ef­fect, the big­gest fine was is­sued in Fe­bru­ary against a power plant by an en­vi­ron­men­tal author­ity in the Xin­jiang Uygur Au­ton­o­mous Re­gion: 2.08 mil­lion yuan ($335,133) for dis­charg­ing pol­lu­tants be­yond the al­lowed limit.

Com­pared with the en­vi­ron­men­tal pro­tec­tion law passed in 1989, the new one shows the gov­ern­ment is ad­dress­ing en­vi­ron­men­tal is­sues in the ecosys­tem, said Gao Song, vice-pres­i­dent of the Jiangsu (Yix­ing) In­sti­tute of En­vi­ron­men­tal In­dus­try.

“In the past, vi­o­lat­ing the

Carl Wang said China’s pro­mo­tion of in­no­va­tion and mass en­trepreneur­ship ac­cel­er­ated his re­turn to China. “We re­ceived a few of­fers from Shang­hai’s in­no­va­tion park, but we are con­sid­er­ing Bei­jing as its en­vi­ron­ment for a startup is more ma­ture and the Bei­jing-Tian­jinHe­bei clus­ter has been made a pri­or­ity,” he said.

To at­tract more over­seas Chi­nese pro­fes­sion­als to re­turn home, some ma­jor in­no­va­tion parks are un­der­way in Bei­jing, such as the 10-square-kilo­me­ter Fu­ture Science & Tech­nol­ogy Park, which is ex­pected to lead China’s ap­plied science and tech­nol­ogy and in­no­va­tive en­trepreneur­ship, as well as Zhong­guan­cun Science & Tech­nol­ogy Zone and 16 other high-tech parks, cov­er­ing a to­tal of 488 square kilo­me­ters across the mu­nic­i­pal­ity.

In Shang­hai, such in­no­va­tion parks are also step­ping up ef­forts to woo over­seas Chi­nese tal­ents back home. Sun, whose team set­tled down in Jiad­ing Industrial Park in Shang­hai, said all they met was green lights. “The park of­fered us a 400-square-me­ter of­fice venue for free and 600,000 yuan (about $100,000) of sub­sidy a year,” he said. “We are also al­lowed to eat at en­vi­ron­men­tal law cost very lit­tle. It didn’t make much dif­fer­ence if you pol­luted for one day or for a month,” he said. “Now the fac­to­ries will have to seek so­lu­tions from ad­vanced tech­nolo­gies and man­age­ment in or­der to meet the law’s re­quire­ments.”

He said there will be chal­lenges to im­ple­ment­ing the new law be­cause some lo­cal au­thor­i­ties aren’t fully pre­pared to en­force it. “On the other hand, the new law can serve as a sharp weapon to help raise the whole so­ci­ety’s aware­ness of pol­lu­tion and ul­ti­mately pro­mote the cause of en­vi­ron­men­tal pro­tec­tion,” he said.

Last March, Chi­nese Pre­mier Li Ke­qiang said dur­ing the an­nual Na­tional Peo­ple’s Congress (NPC) that the gov­ern­ment would “res­o­lutely de­clare war against pol­lu­tion as we de­clare war against poverty.”

He said at a press con­fer­ence at the end of the NPC ses­sion that strict en­force­ment of the new law would be a fo­cus of en­vi­ron­men­tal-pro­tec­tion ef­forts this year, and the cost for those in­volved in the il­le­gal pro­duc­tion and emis­sion of pol­lu­tants would be too high to bear.

“The en­vi­ron­ment pro­tec­tion law is an ul­ti­mate weapon in­stead of a cot­ton swab,” he said. the cafe­te­rias of the nearby po­lice depart­ment and rev­enue bureau.”

Early this year, China’s state coun­cil an­nounced a com­mit­ment of 40 bil­lion yuan ($6.66 bil­lion) for a na­tional en­tre­pre­neur­ial in­vest­ment foun­da­tion for emerg­ing in­dus­tries to sup­port in­no­va­tion and star­tups.

The do­mes­tic de­mand and the gov­ern­ment’s sup­port both play a role in at­tract­ing over­seas en­vi­ron­men­tal tal­ent back home, said Xin Yuan, who is vice-pres­i­dent of the Chi­nese En­vi­ron­men­tal Schol­ars and Pro­fes­sion­als Net­work (CESPN), founded in 2007 in the US by a group of Chi­nese schol­ars and pro­fes­sion­als study­ing and prac­tic­ing en­vi­ron­men­tal science and en­gi­neer­ing in North Amer­ica and Europe.

“One of our or­ga­ni­za­tion’s mis­sions is to help pro­fes­sion­als start up their own projects in China,” said Yuan, who is also a New York-based se­nior en­vi­ron­men­tal an­a­lyst. “In the past three or four years, al­most half our mem­bers have re­turned to China.”

“An in­creas­ing num­ber of Chi­nese stu­dents have come to the US to study en­vi­ron­men­tal science or en­gi­neer­ing. Many of them re­turned to China di­rectly af­ter grad­u­a­tion and some of them chose to work in the US so that they could ac­cu­mu­late nec­es­sary ex­pe­ri­ence be­fore launch­ing their own star­tups in China,” he said.

CESPN has more than 1,000 mem­bers and around 6,000 fol­low­ers on their Weibo ac­count and fo­rum web­site. They are from academia, gov­ern­ment agen­cies and en­ter­prises or non-profit or­ga­ni­za­tions.

CESPN also part­ners with the Jiangsu (Yix­ing) In­sti­tute of En­vi­ron­men­tal In­dus­try (JIEI), a non­profit or­ga­ni­za­tion pro­mot­ing en­vi­ron­men­tal in­dus­try with tech­nol­ogy and in­for­ma­tion sup­port, to bridge the chan­nels for over­seas tal­ent and Chi­nese en­vi­ron­men­tal en­ter­prises. The in­sti­tute was es­tab­lished by the Yix­ing Industrial Park for En­vi­ron­men­tal Science and Tech­nol­ogy, which is con­sid­ered the birth­place of China’s en­vi­ron­men­tal in­dus­try in the 1970s, and is home to more than 1,000 en­ter­prises now. A wave of star­tups

“We no­ticed a wave of star­tups in the past one or two years,” said Gao Song, vice-pres­i­dent of the in­sti­tute. “Un­like the tra­di­tional en­ter­prises, th­ese star­tups cover a va­ri­ety of ar­eas, rang­ing from pol­luted soil and wa­ter to mud flat garbage.”

“The tra­di­tional en­vi­ron­men­tal in­dus­try mainly fo­cused on man­u­fac­tur­ing and the projects were usu­ally used to deal with the gov­ern­ment’s in­spec­tion,” he said. “Now the in­dus­try is trans­form­ing from pol­icy-driven to so­ci­etyand in­no­va­tion-driven, which will greatly ac­cel­er­ate the in­dus­try’s devel­op­ment.”

Last month, Gao’s in­sti­tute launched a global in­no­va­tion com­pe­ti­tion with the aim of pro­mot­ing sus­tain­able devel­op­ment of the en­vi­ron­men­tal in­dus­try. So far, 200 teams from China and abroad have pre­sented their projects to ju­ries com­posed of ven­ture cap­i­tal firms, an­gel in­vestors and suc­cess­ful en­trepreneurs.

“The in­dus­try is in great need of over­seas tal­ents with com­plete pro­fes­sional train­ing and they are ex­pected to bring back ad­vanced tech­nolo­gies as well as op­er­a­tional meth­ods,” said Gao. “The op­er­a­tions in China have tra­di­tion­ally been based on ex­pe­ri­ence, but in ad­vanced coun­tries the prac­tice is based on data mod­el­ing. Cur­rently, com­puter soft­ware has not been widely used in China’s en­vi­ron­men­tal in­dus­try.”

Chi­nese Pre­mier Li Ke­qiang pro­posed the “In­ter­net Plus” strat­egy in March to stim­u­late new eco­nomic growth by fo­cus­ing on In­ter­net­pow­ered star­tups and the ap­pli­ca­tion of new tech­nol­ogy to tra­di­tional sec­tors.

The “In­ter­net Plus” was go­ing to be an in­evitable trend to in­te­grate the In­ter­net, cloud com­put­ing and big data with the en­vi­ron­men­tal in­dus­try, Gao said.

That’s why star­tups like GAGO, He-sai Pho­ton­ics Tech­nolo­gies and Equota En­ergy are fa­vored by in­vestors. “If you have good tech­nol­ogy, you don’t worry about in­vest­ment,” said Carl Wang, who had just sched­uled a con­fer­ence call with an in­vestor in Shang­hai.

Kai Sun agreed. “We have turned down over 10 in­vest­ment of­fers,” he said, de­clin­ing to re­veal the amount of fund­ing they had se­cured.

In the past three years, an ad­di­tional 100 bil­lion yuan has been in­vested in the en­vi­ron­men­tal in­dus­try each year and China still needs tremen­dous in­vest­ment in the next few years, which is es­ti­mated at 8 tril­lion yuan to 10 tril­lion yuan, said China’s Min­is­ter of En­vi­ron­men­tal Pro­tec­tion Chen Jin­ing dur­ing the NPC in March.

In 2013, the State Coun­cil set a goal of in­creas­ing the en­vi­ron­men­tal in­dus­try out­put to 4.5 tril­lion yuan by the end of 2015 and mak­ing the en­vi­ron­men­tal in­dus­try the pil­lar in­dus­try of the na­tional econ­omy. The gov­ern­ment ex­pects to stim­u­late con­sump­tion de­mands by pro­mot­ing en­ergy-con­serv­ing and en­vi­ron­men­tal prod­ucts, as well as in­crease so­cial in­vest­ment by en­hanc­ing en­gi­neer­ing com­pe­tence. Con­tact the writer at li­azhu@

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