Current Affairs

There is an argument in China that there should be harmony between nature and industry. But the fossil fuel that has industrialised China has been coal. China to its credit has argued that by 2060 it should be carbon neutral, but that does not explain the investment in coal powered power stations and as such, China is the worlds leading polluter with emissions rising by five percent last year. About half of this figure is from the power sector, which is dominated by coal fired power plants. But China’s argument is that it has industrialised as the West has de-industrialised and that means that manufacturing has moved to China, where factories particularly steel foundries produce 1 billions tonnes of metals a year and pollute green house gases, which is catastrophic for the worlds climate aspirations. But a statistic that sticks in the mind is that China’s emissions per person is two thirds that of a US consumer, which has a quarter of the population of China. Yet for all the talk of harmony between nature and industry, China emits more greenhouse gases and carbon dioxide than any other country.

Most countries have signed up to the protocol argued at COP to lower green house emissions to two degrees Celsus. but  according to climate tracker the world is projected to reach 4degrees of warming compared to the pre-industrial average, which is the worst possible outcome. But China has also installed more renewable energy in its infrastructure and government subsidies encourage the manufacturer and consumer to be green. But to a degree China has completed the infrastructure projects, so the cement works and steel mills are no longer producing the high carbon intensive green house gases that they once were. In this sense, China is moving towards an industrialised cleaner argument with the production of renewables, but the emissions being emitted are expected to peak in the next few years. Climate Tracker argues that China’s industrial greening is coming at a cost and that the project that Li Qiang in his work report pointed out -was that China is a powerhouse for green technology, which is coming at a cost to the environment.

There are two sides to China, one is the environmental impact of wind turbines, solar power and EVs, but they also stand side by side with the polluters whose coal fired industrial factories, power stations and steel producers are dependent on the fossil fuels dug up from the ground. But there are other arguments and though China produces 90 percent of the solar panels, 6o percent of lithium batteries and over fifty percent of the EVs sold around the world, the Chinese government has incentavised their production through subsidies in the manufacture of green technology.

China took a bet twenty years ago and began subsidising the industrial green base and has ended up with the big three, which have come to dominate the world markets. Last year clean energy markets accounted for 40 percent of China’s growth and the three – EV’s solar and batteries accounted for 4.5 percent of China’s GDP.  China views EV’s as a pathway for sustainable transport because of the low emissions and high energy efficiency.  China is the biggest producer of EVs in the world and in 2021 produced 3.5 million units , with revenue of US$102.2 billion. Put into context, Chinese consumers will buy eight million EVs in 2023 compared to the 3.5 million in 2021. This compares to the 3 million in Europe and 2 million in the US.

Neill Beverage, an analyst with Bernstein in Hong Kong said that “seven out of ten EVs sold [worldwide] are now sold in China.” The pace of growth in the EV market in China means that China is on the edge of capturing 50 percent of the car market with EVs by the end of 2025, according to Bernstein’s forecast. While China’s push into all green sectors was initially pushed by subsidies and state policy, it now seems as though the issues are being pushed by the motivation of profit. The largest of state tech companies are accelerating the adoption of clean tech. These dynamics, with a political approach, provide a reason for optimism that  China will achieve installing 1,200 GW of solar and wind energy capacity by 2030, says Global Energy Monitor.

Though China leads the world in the big three, it plans to export more of its renewables to Europe. The European Commission said last year that China’s share of the EV market had risen from 8 percent and could reach 15 percent by 2025. Ursala Von Der Leyen, European Commission president argued that prices were “artificially low by huge state subsidies”.

An uncomfortable fact for the West is that China is responsible for the production of 90 percent of the worlds rare earth elements, at least 80 percent of all the stages of making solar panels and 60percent of wind turbines and electric car batteries.  This makes China a massive power in the clean tech industries and challenges western manufacturers, including legacy industries such as car making and energy giants. Nikhil Bhandari speaking to the Financial Times London, said that China’s grip on raw materials  is “more than it appears.” “This is thanks to equity investments in overseas mining operations by Chinese companies.” According ,to the US Department of Interior and the Geological Survey, China is the leading producer “of at least […] 35 of of the 54 mineral commodities considered critical to the US economy.  According to Goldman Sachs, China produces 20 percent of the graphic production but controls 70 percent of the processing.

According to Li Shuo, writing in the Guardian, “if anything, Chinese solar and electric vehicles manufacturers will become more efficient and supply ever cheaper solutions to reduce carbon emissions nationally and globally.” Meaning that China has taken the lead because its domestic market is so competitive and as the opportunities for the west to catch up are fading, because China exports more of their products on an accelerated scale.   

But for all China’s hard work in improving its green credentials, there is always the same argument and that is its reliance on the black stuff, especially coal. Overall China is burning more coal than before, Last year it added 47GW of new capacity from coal powered generators, which is up from the 22GW in 2022, meaning that there were two coal fired generators approved a week. But there are other problems and that is the sector supports 2.7 million workers and that is an enormous demographic to upset if you argue that coal should be slowly cut.  According to the Economist, coal provides China with security that it does not have with other minerals, it produces very little oil and gas and when Ukraine was invaded by Russia in 2022, gas and oil prices soared.

There are concerns for China’s exports and that is the EU are expected to begin taxing imports on how much carbon is emitted while they are being produced, which is bad news for high carbon sources such as aluminium, cement and steel. China, itself is expected to increase fines for polluters and according to Bloomberg, seven markets are expected to be added to the market by 2030.

China, is in a quandry, it wants to support the movement towards a green agenda, but the heavy industries that it is so dependent on challenges this argument. “We will advance the energy revolution, tighten control over fossil fuel consumption and work harder to develop a new energy system, “ said Mr Li. But in the next breath he argued that coal fired power will play a role in ensuring energy supply. It seems hard for China to wean itself off a primary industry that 2.7 million jobs are dependent on. The economy continues to grow and the bet that China made two decades ago is paying off.