‘China knows that if it wants to remain a powerful civilisation for hundreds of years to come, it needs its natural resources’

China Talks #1: lecturer in political philosophy Bai Tongdong

‘Around 2011, widespread air pollution reached such catastrophic levels that it became a matter of social stability, something that is always of great importance to the Party. Due to the number of environmental protests on the streets of China or the mass discontent on the internet, the leaders realised they could not hide this problem or delay tackling it. That was the main motive for the new approach.’

‘The second driving force is that the central government saw tackling environmental problems as an opportunity. They realised that by setting very strict environmental standards, they could actually make industry more competitive. They had to develop clean technologies, and those technologies became something China could sell globally.’

‘This was most evident in some of the major industries in which China is now very strong, such as electric vehicles, solar panels, batteries and wind turbines. These were designated as strategically important industries around 2010. That was the moment when China really tried to work out what we needed to focus on if we wanted to develop in a “cleaner” way.’

‘De-industrialisation was never an option, because industry is too important a contributor to growth. So the question was: if you don’t want to focus on dirty steel or cement factories, what should you focus on instead? That’s how we arrived at ten emerging industries of the future.’

Is that the famous ‘Made in China 2025’?

Ma Tianjie: ‘No, this came even earlier. The decision to industrialise China further but in a cleaner way was made in 2010, following the Copenhagen Climate Summit. It was a choice to industrialise China further, but in a cleaner way.’

‘The government has pumped huge sums into those industries: through subsidies, incentives, investment in research and development, and by creating demand by obliging local authorities to purchase those green products at an early stage. By creating such favourable conditions, those investments have paid for themselves fifteen years later. Because these are precisely the industries in which China is strongest.’

‘Green growth’

It is impressive how quickly China became a world leader in these sectors. In the West, it is often claimed that China does not play by the rules of the market and is therefore so competitive.

Ma Tianjie: ‘I think scale is a very significant factor: because the Chinese domestic market is so large, it helps companies to reduce their costs. Fundamentally, it is mainly the domestic market that matters.’

‘Take solar panels: they really took off after the European Union and the United States imposed import tariffs. When exports of those products really struggled around 2012, the government took measures to ensure that all those products were absorbed by the domestic market. This is how a highly competitive domestic market emerged.’

‘It was only from then on that they became truly aggressive in technology development and cost reduction. Not by competing with European companies, but by competing with one another within China. And once that round of domestic competition was over, the strongest Chinese companies had become global champions, because they had been trained in the Chinese market alongside their peers. That made them so strong that it became difficult for manufacturers from other countries to compete with them.’

China wasn’t a rich country back then. How daring was that policy?

Ma Tianjie: ‘In a way, China was forced into this because the EU was hindering exports. To save all those companies, the government came up with a plan to help them domestically by encouraging the large-scale installation of solar panels or wind turbines. That’s how they became competitive.’

I mean: the state could also have opted for more coal. Or did the Chinese cultural tradition, which strives for harmony with nature, play a part? And what role did President Xi play?

Ma Tianjie: ‘The cultural element is more like the icing on the cake. You can certainly wrap the green approach in a layer of traditional Chinese culture, but the two factors mentioned were fundamental.’

‘Xi does have a personal commitment to green issues. Around 2000, he was governor of Fujian and Zhejiang, two provinces that were at the forefront of environmental policy and finding a new way to grow. That left a certain impression on him. He has always championed the idea of green growth, whether in his writings, speeches or policy.’

Environmental damage in figures

Pan Yue, a senior official at the Ministry of the Environment, proposed Green GDP in 2004, a green version of gross domestic product (GDP) that took into account the value of environmental damage. This showed that China had barely any growth once environmental damage was factored out. That was a stark revelation. That instrument has since been phased out.

Ma Tianjie: ‘Green GDP is no longer used as Pan had originally planned, but today they are trying to do something similar but under a different name. Within the government, there is a whole movement towards “ecological accounting”: this aims to calculate how many natural resources China still has and how many it has used. By expressing that in figures, they can hold local leaders accountable for their actions.’

‘This is really happening right now. Visionaries like Pan Yue have played a pioneering role in this. They popularised the idea of the environment as a kind of national treasure: China has all kinds of valuable natural resources, and we must not squander them for short-term economic gains. If you want China to remain a strong civilisation for hundreds of years to come, you need those strategic natural resources. You have to treat them more carefully.’

‘That kind of civilisational perspective became a fundamental driving force for thinkers like Pan or even for President Xi. We must become better stewards of our natural resources, because that makes China stronger.’

Xi put it as follows: ‘The Green Mountain can create mountains of gold, whilst mountains of gold cannot create green mountains.’

Ma Tianjie: ‘Indeed.’

China wants to be the ‘next generation’

Chinese five-year plans now determine how much water can be consumed.

Ma Tianjie: ‘Those are the ecological red lines that draw all sorts of boundaries around China’s natural resources: water, forests, ores… They want to manage them as strategic resources and use them in the long term, rather than squandering them for short-term growth.’

Is that a shift towards a different economic model?

Ma Tianjie: ‘I hope so. China is trying to figure that out, but hasn’t found the answer yet. It’s the start of rethinking how you manage those national resources as inputs for your economy and how you think about economic growth.’

‘In recent years, it has been accepted that lower economic growth can go hand in hand with a better quality of life. That is already a major shift compared to ten years ago, when growth of more than ten per cent was almost an obligation for the country.’

Xi introduced the term ‘ecological civilisation’. Does that have any real meaning?

Ma Tianjie: ‘Leaders such as Pan or Xi view this issue as a civilisational challenge. They are not thinking in terms of ten years, but of a hundred or even a thousand years. How do I ensure that what I do now has a positive impact on the future of Chinese civilisation? That is why they use that term.’

‘If you look at it that way, you’re seeking a system that ensures those resources are utilised in a strategic and wise manner, so that future generations of Chinese people still have them to remain strong and competitive as a nation. There’s certainly a nationalistic element to that.’

‘A very comprehensive system is needed to protect those resources. Some places are simply off-limits: you cannot use them to build roads or carry out projects for today’s needs. They are being preserved for the future. Ecological red lines must keep those resources in a healthy state.’

‘In addition, there is such a thing as green competitiveness. They have imposed a kind of green obligation on the development model, and that is intended to sustain China’s competitiveness in the long term. It must become a green civilisation that transcends industrial civilisation, which they believe the West was good at. China wants to be the next generation and show the way to the next paradigm.’

Benefits for other countries

With all its affordable clean technology, China has an enormously powerful tool at its disposal to help most other countries, the Global South in particular, to achieve this. Yet China remains relatively quiet on this subject.

Ma Tianjie: ‘You’re right. Especially over the past two or three years, it has been risky to talk too much about this, even though China intends to export its green technology or solutions to the rest of the world. China realises that countries do not want to become too dependent.’

‘Developing countries want to tackle the climate problem effectively. They want affordable green technology, but they also want to develop their own industry rather than just buying from China. Financially, many developing countries have also been struggling since the pandemic. Always importing only foreign products, even if they are green, is a legitimate concern.’

‘Chinese policymakers are certainly willing to discuss a mutually beneficial solution, rather than simply losing access to key markets.

‘Can China help them build their own green industry, rather than just selling? Can China help Indonesia to build more electric vehicles itself? And how do you balance that with the desire of Chinese car manufacturers to sell cars there?’

‘How do you share the profits and benefits? Even the EU is now asking not just for Chinese electric vehicles to be exported to it, but also for electric vehicles to be built jointly.’

The Europeans could copy China, which from the 1990s onwards required Western companies to set up joint ventures with Chinese firms. Through those partnerships, they were able to learn for themselves.

Ma Tianjie: ‘Exactly. That will be the next big debate: even though China has all the necessary products, it cannot simply dump everything everywhere. You have to find solutions that also offer benefits to others.’

In Europe

American multinationals built factories in Europe after 1945. Would China want to follow the same path?

Ma Tianjie: ‘Certainly. If you look at how China is handling the trade war over electric vehicles...’

‘The US took a very drastic stance: no imports of Chinese electric vehicles. The EU wants to negotiate further and seek a common approach. It wants China not to set prices too low, in order to protect European manufacturers to some extent. On the other hand, the EU is willing to accept some Chinese electric vehicles in exchange for a transfer of technology.’

‘Something is in the works. Perhaps they will come up with a solution that benefits both sides. Chinese policymakers are quite willing to talk if the alternative is that they would lose access to those important markets.’

Green energy and coal

We discussed the successes of Chinese environmental policy, but there are also downsides. Your book explains how incinerators, through intense lobbying, won out over waste prevention and recycling. As a result, there are now so many incinerators that they do not have enough waste.

Ma Tianjie: ‘Environmental policy is not like a switch that can be flipped in China to turn the green light on at a moment’s notice, even if there is a strong intention on the part of the central government. Many industries that have benefited from the old growth model want to remain part of China’s future.’

‘That is why greenhouse gas emissions are not so easy to reduce. Even though solar and wind power have grown immensely in recent years, coal-fired power stations are still being built today. They claim a new role as a back-up for when there is no wind or sun, as the backbone of the electricity grid. That argument resonates because China has experienced power cuts due to extreme droughts or heatwaves.’

‘They use all sorts of arguments: you need to keep us, we’re stable and local. This kind of debate is taking place across the country. They won’t openly contradict Xi’s green policies, but they’re quietly working against them.’

‘Classic Western environmental policy consists primarily of rules and regulations; China did not take that path because it is still a developing country and cannot afford deindustrialization.’

Does this mean that coal will disappear more slowly?

Ma Tianjie: ‘If you want to reduce greenhouse gas emissions, as the Paris Climate Agreement aims to do, coal-fired power stations should be phased out more quickly. But at the moment, new ones are still being built.’

‘It will be several years before we know how this will turn out. The renewable energy sector has now grown so large that it can also lobby.’

‘In the coming years, we will reach a point of no return, which will require major changes to the electricity grid. That also depends on State Grid (the Chinese state-owned company that manages the electricity grid, ed.). If they are convinced, they will also have to innovate. State Grid has not yet been very proactive in that regard.’

Are you saying the battle isn’t won yet?

Ma Tianjie: ‘Not yet. Currently, 25% of electricity comes from renewable energy sources. Pushing that up to 80% requires major upgrades to the power grid. And that hasn’t been sorted out yet. It’s still a work in progress.’

Greater control over industry

What are the differences between Western and Chinese environmental policy?

Ma Tianjie: ‘The biggest difference is the use of industrial policy. Traditional Western environmental policy consists mainly of rules and laws: you make environmental standards so strict that production becomes cleaner, and that some industries even move to other countries. China has not taken that route because it is still a developing country and cannot afford de-industrialisation. It came up with something different.’

‘Of course, Chinese leaders are also tightening standards, but they are also encouraging industry to operate differently. The state plays a major role in this. Western governments have so far played little or no part in this, until they perhaps now realise that industrial policy is a necessity if they want to compete with China.’

How ‘clean’ will China become?

Ma Tianjie: ‘Hard to say. It also depends on what you mean by clean. I’m fairly certain that China can combine economic prosperity with a decent environmental standard. I can’t predict the end result because so much is changing.’

‘AI is already complicating electricity consumption models. Three years ago, we thought electricity consumption would peak; now we think it might still skyrocket. How do you tackle that? Nobody knows.’

‘The promise of sensible environmental policy is still there, but the future is unpredictable? Partly because the geopolitical situation is so uncertain.’

This article was originally published in Dutch on may 15th. It was translated from Dutch by kompreno, which provides high-quality, distraction-free journalism in five languages. Partner of the European Press Prize, kompreno curates top stories from 30+ sources across 15 European countries. Join here to support independent journalism.

The translation is AI-assisted. The original article remains the final version. Despite our efforts to ensure accuracy, some nuances of the original text may not be fully reproduced.