BEIJING — As companies abroad slash spending to ride out a global slump, China's biggest utility is pouring money into the multibillion-dollar field of electric power transmission.
State Grid Corp. says it began operation in January of a 1 million-volt commercial power line, which is much more powerful than the 765,000-volt systems used in the United States and elsewhere. It said "ultrahigh voltage" transmission systems will be able to link cities to distant hydroelectric dams from Brazil to Africa.
"This is a milestone in the history of the power industry," said a State Grid vice president, Lu Jian.
The effort reflects Beijing's broader ambition to transform China from a low-cost manufacturing nation into a creator of profitable technology, a step needed to continue growing.
"Chinese players are indeed climbing up the technical ladder," said David Xu, director of McKinsey & Co.'s Asia-Pacific power consulting group. "They understand that just competing on a cost basis is not going to be sustainable."
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New, powerful transmission systems may also help Beijing clear smog from China's cities by locating new coal-fired power plants closer to mines instead of in urban areas.
Little known abroad, State Grid is one of the world's biggest companies, ranked 24th on Fortune magazine's Global 500 list last year with $133 billion in 2007 revenues. It is flush with cash even as a global economic downturn forces multinational corporations to cut payrolls and spending.
State Grid operates the vast network of power-distribution lines across 26 of China's 32 provinces and regions and is expanding. The company signed a $3.9 billion, 25-year contract with the Philippines to run that country's power grid.
The appeal of ultrahigh-voltage transmission is its efficiency over long distances, according to experts. Power, measured in kilowatts, is a function of voltage multiplied by current. That means a higher-voltage line can carry less current, which reduces energy losses, yet still deliver the same kilowatts.
Developing the technology could help China compete in a global market for power transmission equipment that Goulden Reports, an industry research company, said should grow to more than $140 billion in annual sales by 2015.
Russia, Japan, Italy and others have experimented with ultrahigh voltage, but none uses such high voltages commercially. The biggest U.S. power company, American Electric Power Inc. in Columbus, Ohio, said it successfully tested a 2 million-volt line but has no plans for regular use.
Utilities in the West face a host of hurdles in building powerful transmission lines, from lawsuits to state utility boards, each with different demands.
Beijing hopes eventually to become more than a source of labor to build the world's DVD players and other high-tech goods, with most of the profits from those operations flowing back to the United States, Japan and other countries.
Economists say China must move into higher-technology fields if it wants to keep growing as rising wages erode its dominance in low-profit, labor-intensive industries. The Chinese effort has yet to produce big successes despite increased spending, ranging from semiconductors to genetics.
State Grid's first ultrahigh-voltage line, which cost $820 million, delivers power from Shanxi province in the north to the populous central province of Hubei, 400 miles away.
Experts say such a system could find a market as the United States and others expand use of solar, wind and hydropower.
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