China faces major challenges for climate and technology in its pursuit of global leadership

China faces major challenges for climate and technology in its pursuit of global leadership

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This year’s “Two Sessions” meeting – the most important annual event on China’s political calendar – is particularly noteworthy as Beijing will ratify its 14th five-year plan, a broad outline of the 2025 goals that policymakers have been working on for months. The meeting kicked off last Thursday and will be presented through the better part of this week.
After Beijing escaped a recession last year, he said on Friday that the world’s second-largest economy would grow by more than 6% in 2021, which, if achieved, would keep China in tune with US GDP by 2028. fit. President Xi Jinping wants the economy. to double in size by 2035.
But in the wake of the crushing trade war with the United States, China has already cited independence and technological independence as important goals. And as climate change accelerates, President Xi Jinping promised last September that China would be carbon neutral by 2060.

These are high ambitions, and so far it has not been clear how Beijing intends to achieve them. But the world gained more clues last week when Prime Minister Li Keqiang outlined some aspects of the country’s agenda, and Beijing unveiled a draft of the five-year plan.

Dependent dependence on foreign technology

One key goal Xi has already outlined is a desire for China to cast its trust in the United States for key technologies, such as power supplies that power smartphones, computers, telecommunications devices and next-generation devices.
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Li emphasized the importance of technological development and innovation during his speech on Friday. He said China would increase its research and development spending by more than 7% annually. The Chinese government has previously identified semiconductors, 5G networks and cloud computing as critical areas.

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

State versus private sector

State-owned enterprises such as SMIC are central to Beijing’s pursuit of self-sufficiency. But private enterprises also play a critical role. Technical giants of Alibaba (BABY) on Tencent (TCEHY) has driven much of Chinese innovation in the field in recent decades.

The government has made it clear in recent months – and in its new five-year plan – that such companies will be expected to show the Chinese Communist Party line if they want to succeed.

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

Beijing has been gradually expanding its control over technology ventures over the past few months. Not only did Chinese regulators force Alibaba’s financial subsidiary, Ant Group, to divest its record listing in November, but they also ordered the company to revamp its business. Authorities also launch an antitrust inquiry into Alibaba, interviewing Tencent executives Pinduoduo (PDD), and drove new rules.
The government has also shown a desire to strengthen its influence on the economy by creating its own digital currency and extending a trial version to major cities, including Beijing and Shanghai.

The new five-year plan has provided more insight into how authorities want to increase their reach. Technical businesses are “encouraged” to share data related to research, e-commerce and social networks.

Achieve carbon neutrality

As China maps its economic trajectory for the coming years, it will also have to balance its ambitions with an urgent need to tackle the climate crisis.

Xi last year unveiled a daring plan for China to become carbon neutral by 2060. It is a major target for a country that burns more coal than the rest of the world combined, and a country that needs nothing more than an economic revolution.

The country has spent decades on massive infrastructure projects and manufacturing, and built an economic engine that is now heavily dependent on dirty energy. And analysts have said that pressure caused by Covid-19 and tensions with the West are prompting China to spend more on these energy sources, not less.

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Yet the country has finally begun to set out some details on how it wants to work on its climate coals.

Even before the meeting of the two sessions began, the state network announced plans to upgrade its network, reduce coal generation and develop charging stations for electric vehicles.

The draft five-year plan contained more criteria. By the end of 2025, China wants to increase the use of non-fossil fuels to 20% of total energy consumption compared to the current level of 15%. These include efforts to build more nuclear power stations and clean energy facilities.

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

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

China has outlined other ways to reach its coal, including by setting up more clean energy facilities such as hydropower plants and wind farms.

But some climate experts argue that the five-year plan does not yet have enough details on how China will eventually move away from coal more significantly.

“As for the climate, initial indications from China’s 14-year five-year plan are overwhelming,” Swithin Lui, China’s chief analyst for the Climate Action Tracker at NewClimate Institute, said in a statement on Friday. “While it is positive that this plan reiterates its commitment to carbon neutrality by 2060, and achieves emissions by 2030, there is little sign of the change needed to achieve the goal.”

– Ivana Kottasová and Steven Jiang contributed to this report.

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