At a private lunch last year, China’s ambassador to the UK spent ten minutes answering my question about why China would not support global limits on greenhouse gas emissions. He is an excellent diplomat and it was a private meeting so I can’t point to anything he said that deviated at all from the official policy. However, he spent five minutes of the answer explaining the speed with which China can change industrial policy when it decides it wants to. All senior Chinese diplomats, he explained, have to do a couple of years in a provincial administration before they can be promoted to the top jobs. His couple of years had involved suddenly closing a whole cluster of heavily-polluting factory complexes. He said that his job would have been far more difficult under the systems of most European countries.
The ambassador’s answer confirmed the view of one of my Chinese colleagues: China’s plan is to dominate the green energy industries. Once it has done so, it may not agree to binding, Kyoto-style targets but it will agree to policies that effectively require its competitors to invest in green technologies, many of which will be produced in China. It will change its domestic policies to consolidate this advantage on the world stage.
Yesterday’s Der Spiegel suggests that this process may be accelerating under China’s new leadership. Environmental industries have now joined pharmaceuticals, biotechnology and steel as officially-designated, “key industries”. Spiegel thinks the shift came because of the unpopularity of last winter’s heavy smog although, in reality, it has been happening for much longer. Spiegel takes a positive view on this helping German industry and that may, indeed, have been the gist of the official briefings from both China and Germany that they were evidently given. However, both may be pushing this view after the EU’s humiliating climbdown on the import of heavily-subsidised solar panels from China (a climbdown largely forced by Germany). The , rather good, take on the story in PolicyMic (and, for example, in The Economist) says nothing about German economic advantage.