Finishing his training at a company in Canada, Shi Qinghua returned to China in 1998 as a well-trained engineer in equipment manufacturing.

Waiting for him, and many other ambitious Chinese engineers, was an exciting but challenging project: manufacturing water turbine generators for the Three Gorges hydropower project.

As one of the world's largest hydro-electricity power projects, it would have 26 turbine generators, with an installed capacity of 700 mW each. Significantly China was not capable of producing the generators at that time.

Now the 46-year-old deputy chief engineer from Dongfang Electrical Machinery Co has every reason to be proud: eight of the 26 generators have been manufactured and installed independently by Chinese companies, and are operating smoothly.

"We always had this dream: equip China with Chinese-made equipment," said Shi. "Now it has come true."

The Three Gorges project has provided a successful example of how the state-of-art technology is transferred and localized in China, according to Liu Liren, deputy chief engineer of China Yangtze Three Gorges Project Corporation (CTGPC).

"The turbine generator with a capacity of 700 mW was first produced in the 1970s, so the technology was already quite mature when the Three Gorges project was being planned," said Liu, "but China's capacity was only 320 mW at that time."

So in 1996, the CTGPC invited overseas manufacturers to bid for 14 turbine generators on the north bank of the Yangtze River.

But three conditions were stipulated in the contracts: Chinese companies would join the whole process of designing and manufacturing; their share of the contracts would be no less than 25 percent; and all of the core technologies should be transferred to China.

The contracts were won by a consortium lead by GEC Alstom and Swedish-Swiss ABB and another consortium consisting of Voith HydroGmbH, GE Hydro and GE International Inc, and Siemens AG (VGS).

China's Harbin Electrical Machine Factory Co and Dongfang Electrical Machinery Co joined the two consortia as subcontractors for the 14 units.

Yang Qing, deputy general manager of CTGPC, said this was an "apprenticing" step for Chinese manufacturers.

"Importing the technology alone is far from being enough, you have to really understand each and every process of it," Yang said. "Working with overseas contractors was a good opportunity for domestic companies to learn and practice."

"At that time, China was about 25 years behind the world's most advanced level in terms of hydro-electricity technologies. There was so much to learn," he said.

CTGPC paid a total of $16.35 million for the transfer of some key technologies, and the money was paid in installments, so as to ensure Chinese companies get all they need.

When the bids were opened for the other 12 turbine generators on the south bank of Yangtze, the two Chinese companies won eight of them.

The design, manufacturing, installation and the supervision of the whole process were done completely by domestic companies, according to Yang.

"The whole process greatly enhanced the manufacturing capacity and quality of the two domestic companies," Yang said.

They even improved the flaws in the system created by their foreign teachers.

"These are what we call technology localization in its real sense," Yang said.

The last of the 26 turbine generators were put into operation in October last year, and all of them have been working smoothly.

The appraisal by about 40 experts shows that with all the generators passing the quality check, the overall level of generators on the south bank are "better" than those on the north bank, suggesting Chinese students have surpassed their foreign teachers, said Liu.

(China Daily June 6, 2009)