China faces huge climate and technical challenges as it seeks to assume global leadership

China faces huge climate and technical challenges as it seeks to assume global leadership
These years Two sessions meeting – The most important annual event on the Chinese political calendar – is especially noteworthy because Beijing will endorse its Fourteenth Five-Year Plan, which is a broad outline of goals until 2025 that policymakers set forth. I’ve been working on it for months. The meeting started last Thursday and will continue for the better part of this week.
After avoiding a recession last year, Beijing said on Friday that it expects the world’s second-largest economy to grow by more than 6% in 2021, which if achieved would keep China on track. Matches the GDP of the United States in early 2028. President Xi Jinping wants the economy to double by 2035.
But on the back of Painful trade war With the United States, China has already called for self-reliance and technological independence as the main goals. With the acceleration of climate change, President Xi Jinping Pledge Last September, China, which consumes large amounts of coal, will be carbon neutral by 2060

These are lofty ambitions, and so far it was not at all clear how Beijing planned to fulfill them. But the world got more clues last week when Premier Li Keqiang outlined some aspects of the country’s agenda, and Beijing released a draft of the five-year plan.

Get rid of dependence on foreign technology

One of the main goals Xi has already set is China’s desire Get rid of its dependence on the United States for key technology, Such as the parts that operate smartphones, computers, telecommunications equipment, and next-generation tools.

Li stressed the importance of technological development and innovation during his Friday speech. He said China will increase spending on research and development by more than 7% annually. The Chinese government has previously identified semiconductors, 5G networks, and cloud computing as sensitive areas, among others.

However, China still has a long way to go to end its dependence on foreign technology. In 2019, the country imported $ 306 billion worth of chipsOr 15% of the total value of its imports. Washington has severely hampered some of Beijing’s ambitions in recent months by imposing restrictions on Chinese companies, including the International Semiconductor Manufacturing Corporation (SMIC).

The state versus the private sector

State-owned enterprises such as SMIC are central to Beijing’s drive for self-sufficiency. But private companies also play a critical role. After all, tech giants from Ali Baba (Baba) to me Tencent (TCEHY) It has prompted a lot of Chinese innovations in this field in recent decades.

The government has made clear in recent months – and in its new five-year plan – that these companies are expected to stick to the CCP line if they are to succeed.

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“As Xi pursues the ambitions of China at the forefront of technology, Beijing realizes that the top-down approach has its limits,” Eurasia Group analysts wrote in a recent research report. But Beijing’s willingness to leave more to the market will be challenged by Xi’s sense of urgency and repeated preference for a strong hand. [Party] And the state. “

Beijing has been steadily expanding its control of technology companies in recent months. Not only did Chinese regulators force Alibaba’s financial subsidiary, Ant Group, to cancel their initial public offering in November, they also ordered the company to overhaul its business. Authorities have also launched an antitrust investigation in Alibaba, and have questioned Tencent executives Bindowdu (PDD), And new rules are on the table.
The government has also shown a desire to consolidate its influence over the economy by creating its own Digital currency And extend test version to major cities including Beijing and Shanghai.

The new five-year plan gave more insights into how the authorities would like to expand their reach. Technology companies are “encouraged” to share data related to research, e-commerce and social networks.

Reaching carbon neutrality

As China charts its economic course for the coming years, it will also have to balance those ambitions with the urgent need to tackle the climate crisis.

Xi unveiled a bold plan last year for China to become carbon neutral by 2060. It is a formidable goal for a country that burns more coal than the rest of the world combined, and a country that will require less than Economic revolution.

The country has spent decades pinning its rise on mega infrastructure projects and industrialization, building an economic engine that now relies heavily on dirty energy. Analysts said that the pressures caused by the Covid-19 virus and the tensions with the West are pushing China to increase spending on these energy sources, not less.

China needs an economic revolution to implement Xi's ambitious climate agenda

However, the country is finally starting to lay out some details about how it wants to work on climate coal.

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Even before the “two-session” meeting began, the state power grid had revealed plans to modernize its network, reduce coal power generation, and develop charging stations for electric vehicles.

The draft five-year plan contained more criteria. By the end of 2025, China aims to increase the use of non-fossil fuels to 20% of total energy consumption from the current level of 15%. This includes efforts to build more nuclear power plants and clean energy facilities.

Chinese Premier Li said Friday that China plans to reduce energy consumption per unit of GDP by 3% in 2021. It plans to do so by eliminating heavy air pollution and requiring about 70% of the heating in the northern part of the country to come from clean energy. Sources, among other methods.

“This should be the start of commitment to the target of net zero carbon emissions by 2060,” Iris Pang, chief economist of Greater China at ING, said in a report Friday.

China has identified other ways to access coal, including by building more clean energy facilities such as hydropower plants and wind farms.

But some climate experts argue that the five-year plan still lacks important details about how China will eventually move away from coal in a more meaningful way.

“As far as climate is concerned, initial indications from China’s 14th Five-Year Plan are disappointing,” said Swithin Lowe, a senior Chinese analyst with the Climate Action Tracking Program at the New Climet Institute, in a statement Friday. “While it is positive that this plan affirms its commitment to carbon neutrality by 2060, and for emissions to peak before 2030, there is little evidence of the change required to reach this goal.”

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Ivana Kotasova and Stephen Jiang contributed to this report.

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