Over the past decade, Beijing has undeniably dealt a blow to the United States in the clean energy technology market. China is now the world’s dominant producer of solar panels, wind turbines and batteries as it continues to capture strategic, advanced technology markets. Looking to Pakistan, Beijing has its eye on power lines next.

In 2016, then-Prime Minister Nawaz Sharif sought out international support to ease Pakistan’s frequent blackouts. Although Islamabad received lower cost estimates from General Electric, it contracted its first high-voltage transmission line to China’s State Grid Corporation, the largest utility in the world. Now, Chinese workers are building more than 500 miles of new high voltage, direct current (HVDC) power lines across Pakistan.

If the Trump administration intends to push back on Beijing’s economic competition, the United States should not cede this sector. HVDC technology will help nations smoothly integrate massive amounts of renewable energy into the grid, an attractive product in an increasingly climate-conscious world. The U.S. should make its own infrastructure and technology investments to avoid two critical losses—handing over a growing market abroad and missing out on the economic and societal benefits that advanced infrastructure would yield at home.

POWERING NEW ALLIANCES

The Chinese-built Matiari-Lahore power line is one of the inaugural projects of the China-Pakistan Economic Corridor (CPEC), a series of Beijing-led infrastructure projects meant to modernize Pakistan and bring it into China’s sphere of influence. CPEC will provide $62 billion worth of infrastructure to Pakistan, of which roughly two thirds will be for energy projects to alleviate the country’s chronic power shortages that shave 7 percent from its GDP annually.

China’s investments might help Pakistan’s economic development, but Beijing has a fundamentally geostrategic aim. CPEC itself is one element of the Belt and Road Initiative (BRI), Beijing’s development strategy to economically and eventually, politically, link Asia, Africa, and Europe with China at the center.

Beijing champions BRI as an opportunity for “win-win cooperation” between China and participating nations, but its focus is on the domestic benefits that the initiative will bring, including an acquiescent market for the next generation of energy infrastructure.

CPEC is ramping up as the U.S.-Pakistan relationship becomes increasingly strained. Earlier this year, the Trump administration announced it would reduce security aid to Pakistan by $255 million.

Offering itself as an alternative to U.S. development aid, China already has similar transmission projects in strategically important countries like Egypt and Brazil, and is maneuvering to lay down HVDC lines to connect itself to Mongolia, Russia, South Korea and Japan.

State Grid, a Chinese state-owned enterprise, has a catalog of planned exports, signaling China’s intent to repeat its near-monopolies in other clean-energy technology markets, most notably solar panels. By providing tens of billions in generous state funding, Beijing has crowded out U.S. solar manufacturers by dropping global panel prices to unprofitable levels for American firms. China’s share of the global solar manufacturing market now conservatively stands at 60 percent, up from less than 26 percent a decade ago.

The Trump administration recently placed sweeping tariffs on solar panels, but China’s market dominance will likely prevent solar firms from investing in U.S. manufacturing as it did when the Obama administration similarly enacted tariffs. America’s woes in the solar industry should serve as a cautionary tale of what happens when Washington takes its eye off the ball.

HIGH VOLTAGE TECHNOLOGY

Most of the world’s power lines transmit alternating current (AC) electricity, a legacy of the 20th century when it was the most effective means of sending electricity across long distances. But now direct current (DC), in its high voltage form, has caught up: it halves the amount of power lost to resistance as it travels through power lines.

For large grids, HVDC lines provide an undeniable boon: electricity surpluses in one area can provide power to a nation’s farthest flung regions, reducing blackouts. HVDC can also balance out the intermittency of renewable energy. Wind and solar power are typically generated far from urban and industrial centers—by offshore wind farms anchored in turbulent seas or solar panels arrayed in remote deserts. Efficient HVDC power lines eliminate the drawbacks of moving power across these long distances.

China has become the world’s largest HVDC investor and plans to spend $250 billion on aggressively deploying HVDC lines to bridge the development gap between the nation’s power-producing western provinces and the population-dense east. As a result of calculated domestic investment, Beijing now has the capability to export HVDC technology abroad through the Belt and Road.

DOMESTIC SHORTAGES

Although the United States also has the geographic scale and technical capacity for HVDC, it has been slow to adopt the technology. Despite a growing number of HVDC transmission proposals from U.S. companies and pleas from a broad range of energy, manufacturing and construction companies and labor and environmental organizations—groups that rarely agree on energy policy—America has not had a new overhead HVDC line in 20 years . Now that the nation’s plains, prairies and deserts can deliver significant wind and solar power, it would be valuable to create links across and between America’s three separate coastal grids.

However, the U.S. suffers from a patchwork of federal, state, county, and even city jurisdictions that frustrate long-distance HVDC projects. There is no federal agency that holds siting authority over power transmission as there is for pipeline infrastructure. As a result, it can take years to simply secure permits for U.S. projects and many have stalled. In contrast, State Grid finished the 12,000-mile-long Xiangjiaba-Shanghai transmission project, which spans a distance nearly equal to that between Boston and Atlanta, in 2010 after just two years.

The economic losses that U.S. regulations create may be invisible, but they are real. Each dollar invested in domestic HVDC projects would save an estimated $2.50 in new power-generating capacity that would no longer be required. By investing in advanced transmission, the U.S. could form its own super-grid from which demand centers like New York and Los Angeles could always draw renewable energy from anywhere in the country where the wind is blowing or sun is shining.

As it stands, the U.S. will miss out on not only the domestic benefits that HVDC lines would provide, but also the opportunity to compete with Beijing in a growing global market. Without competition, China will also be able to set technical standards for 21st century transmission, as well as the networked technologies that come with it, such as transformers, potentially crowding out the U.S. along the entire supply chain.

It is important for all nations that the U.S. competes with China. Beijing portrays itself as an investor open to all nations regardless of their politics. However, this picture is incomplete; China has demonstrated its willingness to browbeat countries that cross its diplomatic agenda, and its potentially predatory financing agreements ensnares unsuspecting countries. When Sri Lanka could not pay back its debts, for example, China forced the island nation to turn over the port of Hambantota, creating a strategic foothold for Beijing.

Fortunately, the U.S. can remedy this issue. First, Congress should prioritize legislation that would provide funding for HVDC links crisscrossing the country, so U.S. firms can gain experience with the technology and achieve economies of scale before turning to the export market. For example, the National Infrastructure Development Bank Act, introduced in the House last year, would provide loans and loan guarantees for energy infrastructure projects. Congress can also offer matching funds to electric utilities that are now required by regulation to spend down their billion-dollar windfalls from the recent corporate tax cut.

To aid this effort, Congress should also revive the American Clean Energy Leadership Act and strengthen it to grant the Federal Energy Regulatory Commission siting authority for transmission as it already has for gas pipelines.

Washington should also encourage BRI target countries to participate in the Treasury Department’s government debt and infrastructure finance (GDIF) program, which helps counterpart officials develop strong financial management skills needed to avoid predatory financing. U.S. embassies in BRI countries should connect government counterparts to Treasury officials, encouraging them to apply for the necessary training and technical assistance.

There is no way to tell if China’s investments will pay off. But if Beijing does succeed, it will be in part because Washington did not put up a fight. The U.S. should support Beijing when it builds infrastructure that conforms to international standards, but it should also present itself as a competitive alternative when Chinese projects falter. If United States does not compete, it will already have lost the fight.