Xi Thinks China Can Slow Climate Change. What if He’s Right?

"At first glance, Xi Jinping seems to have lost the plot.

China’s president appears to be smothering the entrepreneurial dynamism that allowed his country to crawl out of poverty and become the factory of the world. He has brushed aside Deng Xiaoping’s maxim “To get rich is glorious” in favor of centralized planning and Communist-sounding slogans like “ecological civilization” and “new, quality productive forces,” which have prompted predictions of the end of China’s economic miracle.

But Mr. Xi is, in fact, making a decades-long bet that China can dominate the global transition to green energy, with his one-party state acting as the driving force in a way that free markets cannot or will not. His ultimate goal is not just to address one of humanity’s most urgent problems — climate change — but also to position China as the global savior in the process.

It has already begun. In recent years, the transition away from fossil fuels has become Mr. Xi’s mantra and the common thread in China’s industrial policies. It’s yielding results: China is now the world’s leading manufacturer of climate-friendly technologies, such as solar panels, batteries and electric vehicles. Last year the energy transition was China’s single biggest driver of overall investment and economic growth, making it the first large economy to achieve that.

This raises an important question for the United States and all of humanity: Is Mr. Xi right? Is a state-directed system like China’s better positioned to solve a generational crisis like climate change, or is a decentralized market approach — i.e., the American way — the answer?

How this plays out could have serious implications for American power and influence.

Look at what happened in the early 20th century, when fascism posed a global threat. America entered the fight late, but with its industrial power — the arsenal of democracy — it emerged on top. Whoever unlocks the door inherits the kingdom, and the United States set about building a new architecture of trade and international relations. The era of American dominance began.

Climate change is, similarly, a global problem, one that threatens our species and the world’s biodiversity. Where do Brazil, Pakistan, Indonesia and other large developing nations that are already grappling with the effects of climate change find their solutions? It will be in technologies that offer an affordable path to decarbonization, and so far, it’s China that is providing most of the solar panels, electric cars and more. China’s exports, increasingly led by green technology, are booming, and much of the growth involves exports to developing countries.

From the American neoliberal economic viewpoint, a state-led push like this might seem illegitimate or even unfair. The state, with its subsidies and political directives, is making decisions that are better left to the markets, the thinking goes.

But China’s leaders have their own calculations, which prioritize stability decades from now over shareholder returns today. Chinese history is littered with dynasties that fell because of famines, floods or failures to adapt to new realities. The Chinese Communist Party’s centrally planned system values constant struggle for its own sake, and today’s struggle is against climate change. China received a frightening reminder of this in 2022, when vast areas of the country baked for weeks under a record heat wave that dried up rivers, withered crops and was blamed for several heatstroke deaths.

China’s government knows that it must make this green transition out of rational self-interest, and is actively positioning itself to do so. 

It is increasingly led by people with backgrounds in science, technology and environmental issues. Shanghai, the country’s largest city and its financial and industrial leading edge, is headed by Chen Jining, an environmental systems expert and China’s former minister of environmental protection. 

Across the country, money is being poured into developing and bringing to market new advances in things like rechargeable batteries and into creating corporate champions in renewable energy.

To be clear, for Mr. Xi, this green agenda is not purely an environmental endeavor. It also helps him tighten his grip on power. In 2015, for instance, the Central Environmental Inspection Team was formed to investigate whether provincial leaders and even agencies of the central government were adhering to his green push, giving him another tool with which to exert his already considerable power and authority.

At the same time, locking in renewable energy sources is a national security issue for Mr. Xi; unlike the United States, China imports almost all of its oil, which could be disrupted by the U.S. Navy in choke points like the Malacca Strait in the event of war.

Mr. Xi’s plan — call it his Green Leap Forward — has serious deficiencies. China continues to build coal-fired power plants, and its annual greenhouse-gas emissions remain far greater than those of the United States, though American emissions are higher on a per-capita basis. China’s electric vehicle industry was built on subsidies, and the country may be using forced labor to produce solar panels. Those are serious concerns, but they fade into the background when Pakistan floods or Brazil wants to build an E.V. factory or South Africa desperately needs solar panels for a faltering energy grid.

American politics may be inadvertently helping China gobble up global market share in renewable energy products. When the United States — whether for national security or protectionist reasons — keeps Chinese companies like Huawei out of the American market or rolls up the welcome mat for electric vehicle makers like BYD or companies involved in artificial intelligence or self-driving cars, those businesses must look elsewhere.

President Biden’s Inflation Reduction Act, aimed at tackling climate change, has put the United States on a solid path toward carbon neutrality. But America’s decentralization and focus on private innovation means government policy cannot have quite the same impact that it can in China.

So it is crucial for Americans to recognize that, for most of the world, perhaps for all of us, China’s ability to provide low-cost green technology is, on balance, great news. All of humanity needs to move toward renewables at a huge scale — and fast. America still leads in innovation, while China excels in taking frontier science and making its application in the real world cost-effective. If American politicians, investors and businesses recognize that climate change is humanity’s biggest threat, that could open pathways for diplomacy, collaboration and constructive competition with China that benefit us all.

Together, China and the United States could decarbonize the world. But if Americans don’t get serious about it, the Chinese will do it without them.

And if the United States tries to obstruct China, by way of corporate blacklists, trade or technology bans or diplomatic pressure, it will end up looking like part of the climate problem. That happened earlier this month when Treasury Secretary Janet Yellen, during a visit to China, urged officials here to rein in green technology exports that the United States says are hurting American companies.

Mr. Xi won’t completely toss out the polluting manufacturing-for-export economic model that has served China so well, nor does he seem ready to halt construction of coal plants. Both are considered necessary for economic and energy security until the green transition is complete. But they are now only a means to an end. The endgame, it seems, is to reach carbon neutrality while dominating the industries making that possible.

Much like how the United States showed up late for World War II, China’s clean-tech companies are latecomers, piggybacking on technology developed elsewhere. But history rewards not necessarily who was there first but who was there last — when a problem was solved. Mr. Xi seems to discern the climate chaos on the horizon. Winning the race for solutions means winning the world that comes next.

Jacob Dreyer is an American editor and writer focused on the intersection of the Chinese political economy and science. He lives in Shanghai." [1]

1. Xi Thinks China Can Slow Climate Change. What if He’s Right?: Guest Essay. Dreyer, Jacob.  New York Times (Online)New York Times Company. Apr 19, 2024.