Beijing, China

March 26, 2007

Minister Wang [1^st tone], Vice Minister Qiu, honored guests and friends:

This is the third year of the Ministry of Construction’s Intelligent and Green Building Technologies and Products Conference & Expo, and also the third year of sponsorship of the event by United Technologies Corporation. Last year during the conference, UTC and MOC signed a memorandum of understanding pledging to work together to promote sustainable development of Chinese buildings and cities.

The purpose of this MOU is straightforward. We are passionate in our interest in making buildings smarter and reducing their negative impact on the environment, and we believe that China has an historic opportunity to be a leader in this effort. Simply put, we want to be a part of it.

The magnitude of the challenge China faces is daunting. Between 12 and 15 million people migrate to the cities from rural areas each year. No country has ever seen urbanization on that scale and, as a social & economic force, it cannot be stopped. China’s urban population consumes 3 to 3.5 times as much energy as its rural population. And two billon square meters of new construction each year is required to accommodate this growth.

If Chinese city dwellers are to live healthy and comfortable lives, reducing the environmental footprint of China’s cities is imperative. And an important component of this effort is cutting-down on the energy consumption, particularly in buildings.  

As stated in its 11th Five-Year Plan, China’s goal is to reduce energy consumption per RMB10,000 of GDP to 0.98 tons of standard coal, or by 20 percent. The central government is urging local governments at all levels to make energy saving a priority, and spare no effort to reduce energy consumption while improving energy efficiency.

The only way to reach these goals is through conservation and breakthrough technology.  And as the manufacturer of Otis elevators, escalators and people movers; Carrier heating, air conditioning and refrigeration systems; UTC Fire & Security fire protection and security services and UTC Power on-site power solution and fuel cell transportation, we know something about breakthrough technologies. 

Let me cite but one example. Otis recently announced its newest technological achievement, the OTIS REGEN DRIVE Technology to the China Market. This technology saves between 30 to 70 percent of an elevator’s energy consumption and can transmit it back into the building power supply or grid for reuse. This may not sound like much but if 80% of all elevators in China were energy efficient, the country would SAVE 7% of the annual energy output of the Three Gorges dam project.

Another example – using waste heat for cooling. We have supplied the Ritz-Carlton Hotel in San Francisco with a super-efficient PureComfort combined cooling, heating and power system that recycles exhaust heat. The PureComfort solution integrates microturbine technology fueled by natural gas with absorption chillers to deliver cooling, heating and power.

Conventional power delivery is only about 33 percent efficient, while the PureComfort solution achieves approximately 80 percent efficiency – considerable saving in energy usage that ultimately benefits the environment. Moreover, it reduces nitrous oxide emissions, equivalent to removing 169 cars from the road every year, reduces carbon levels, equivalent to planting 96 acres of forest, and it saves enough electricity to light 300 homes.

In China, Carrier is providing the Olympic “Water Cube”-National Swimming Center with high efficiency centrifugal chillers with a unique heat recovery option, which utilizes more than 50% of the exhaust heat to warm the swimming pool – aligning an innovative energy saving solution with the Olympic theme to be “green.”

A truly green approach focuses not only on how products are used, but also how they are made and disposed. Our approach at UTC is always to try to do the most with the least – minimizing waste, emissions and resource usage.  Over the last decade, our worldwide energy use is down 19 percent and our water usage id down 49 percent, while our revenues have doubled.  This is testament to the fact that we can conserve energy AND improve the environment without lowering our standard of living.

This is not something only UTC can do - it can, with resolve, be done across the board by others. Reducing the environmental footprint of our factories as well as our homes and offices also, will help China meet the aggressive goals I mentioned a moment ago.

As a friend of China for more than a century, as an active participant in the modernization of new China dating back to 1972, and as a domestic manufacturer that today employs more than 17,000 Chinese citizens in over 40 JVs and wholly owned enterprises, United Technologies stands with China, and stands with the Ministry of Construction, as it embraces the challenge.

We join you in a common effort to promote sustained, healthy and dynamic development of China’s cities. This effort will not only yield mutual benefits here in China, but to the rest of the world as well.

Thank you very much.