What is the color of Chinese water? : Challenges and opportunities for European hydropower companies in the Chinese market

Background: China is the country with the worldwide hugest hydropower reserves. Interms of meeting its electricity demand, further development of its reserves is necessary.European companies are leading on the hydropower market and strive for projects inChina, resulting in challenges and opportunities while facing emerging market features.Aim: This study presents an analysis of the Chinese electricity market with the aim toidentify challenges and opportunities European hydropower companies face whenoperating or entering this market. The analysis uses Blue Ocean as strategic tool to finda new perspective of examining the market situation and potential.Definition: The OECD (2007) defined hydropower as “electricity generation using thepower of falling water”.Method: This study is based on qualitative research. It constitutes five expertinterviews with company employees as Voith and a professor for fluid mechanics andhydraulic machinery at Stuttgart University.Results: The analysis resulted in 12 challenges and opportunities for Europeanhydropower companies. The challenges arise mainly from political influence on theChinese market. Opportunities, on the other hand, have strategic implications on alltime horizons but focus on different technologies and directions. The long term strategicopportunity was identifies by applying the Blue Ocean strategy. Further this proves theex ante applicability of the Blue Ocean strategy.