This article is part of a series for the Australia-UK Asia Dialogue, co-hosted by the Lowy Institute and Ditchley Foundation, and supported by the Department of Foreign Affairs and Trade and the Foreign and Commonwealth Office.
Xi Jinping had a good year in 2017. It began on the international stage at Davos, when the Chinese leader, in sober suit and tie, assured his nervous audience that China was a steady ally that stood by its treaty commitments, including the Paris Agreement, and was firm in its commitment to globalisation. The contrast with the US president was too obvious to need stating.
As the year drew to a close, Xi, in his domestic capacity as chairman of everything, appeared to consolidate his leadership of Party, army and state into an unassailable, long-term dominance. It is worth asking, then, what Xi Jinping means by his commitment to globalisation and to tackling climate change, and, in what way China, the world’s biggest emitter of greenhouse gases, might fill the leadership vacuum created by the absence of the United States.
Xi’s backing for the Paris Agreement is not in doubt. China’s climate policy is closely aligned with its long-term industrial and economic strategy in support of a necessary transition from low added value, high emitting industry to a higher value, more efficient, cleaner and more advanced economic model.
China has long identified low carbon technologies as the technologies of the future, and the development of its strengths in these areas figures largely in the 13th Five Year Plan. China’s ambition to dominate the global market in low carbon goods – renewable technologies for example – is well advanced. The battle for dominance in electric vehicles and in the next generation of batteries is underway. Unlike Donald Trump, China’s leaders see the energy transition as an important economic opportunity, and one in which they have invested considerable time, money and political muscle.
This does not, in itself, make for an outstanding record. In some sectors, China’s record is impressive, and its leaders can certainly claim credit. Its domestic mitigation, however, is patchy and there are large, problematic sectors where the legacy of previous choices makes a transition slow and erratic - the use of coal in primary energy generation being the most obvious example. China could demonstrate leadership by raising its domestic ambitions and encouraging others to do the same.
Nor does China’s position add up to global leadership, or indicate that China will become the mobilising force that the world requires to ensure that global average temperatures rise no more than 2 degrees. The positive dynamic generated by the 2014 US-China climate statement and the cooperation that was built around it has dissipated with the arrival of Trump in the White House. As yet, China shows few signs of going it alone and the fact is that China is not yet a global diplomatic leader and may never become one, despite Xi Jinping’s assertion of China’s power.
There are other negatives in any judgment of China’s climate leadership: its external investments include substantial amounts of new coal fired power stations in Southeast Asia, for example, and its investment practices and external trade favour towards high carbon sectors. Exporting dirty industries may help China meet its own national mitigation targets, but it does not help the world tackle climate change.
China’s climate leadership takes other forms: in its ability, for example, to direct its capacity to manufacture at scale into low carbon technologies and to focus its research and development firepower on the urgent challenges of decarbonisation. China’s success in lowering the costs of renewable technologies has the capacity to enable other emerging economics to bypass the development of high emitting energy sources and go straight to renewables – potentially an enormous contribution to global mitigation. China could demonstrate leadership by promoting renewables over coal overseas, and by conditioning its overseas investment and lending on climate compliance.
In international forums, China could use its weight to advance climate goals, something that, absent US pressure, it lamentably fails to do. In the G20 and World Trade Organisation it could throw its weight behind the speedy elimination of fossil fuel subsidies, instead of using its muscle, as at present, to obstruct such initiatives.
The contradictions in China’s assertion of responsible leadership and its commitment to globalisation were in evidence as the 11th WTO ministerial conference opened in Buenos Aires: China is in dispute with the United States and the European Union over its claim for recognition as a market economy, while both the US and the EU argue that China’s economy remains too closed to qualify. For its critics, China’s embrace of globalisation tends too much in one direction.
On the question of responsible resource stewardship and climate change, China has not shown any inclination to abolish the damaging fossil fuel subsidies that enable its fishing fleet to reach the territorial waters of Argentina, among others. Many countries subsidise their fishing fleets, including the US, Russia, South Korea, Japan and the EU; but according to an EU study, China’s subsidies are the largest, averaging some €5.6 billion a year between 2011-2013, most of it on ship fuel. The operations of China’s fleet, now the world’s largest and heavily implicated in illegal, unreported and unregulated fishing, would not be financially viable without these subsidies. The sinking of a Chinese vessel by Argentine coastguard in 2016 was a sign of growing frustration with the operations of the Chinese fleet.
How much influence can external powers like Australia and the United Kingdom have on China’s climate policies? As far as its industrial policy is concerned, China’s decisions are made and do not require external input.
China does seek, and could benefit from cooperation in cleaner urbanisation and in conservation. In finance and investment, in the development of green bonds and low carbon investment, there are substantial opportunities for the UK to exercise influence. Yet Australia’s opportunities to exercise influence on China’s climate policy are constrained by the ambivalence of its own commitment to climate leadership.