China’s rise as world’s green factory has put West on the back foot
- China’s growing dominance in solar panels, electric cars and batteries is putting US and European manufacturers at a disadvantage and is attracting defensive hostility
This antipathy has a history of incredulity and indignation on the part of Western powers that China could have made the great leap forward it has since abandoning the excesses of Maoism. China is promising another great leap now.
I must admit that when I was asked to speak at a Shanghai conference on economic development several decades go, I suggested that China should focus on exports of simple consumer goods to mass markets in the developing world. Such patronising attitudes were common even at that time.
The global market for such products is vast as developing and advanced economies alike strive to meet climate and other green targets. As such, the products are likely to be welcomed by consumers at the relative low prices China can offer.
Products from these new productive forces account for some 11 per cent of China’s gross domestic product and are capable of a significant expansion, according to Tran, formerly a senior economist at the Institute of International Finance.
The Energy Intelligence Group estimates that the new sectors will account for 18 per cent of China’s GDP by 2027 while the property sector shrinks to a smaller but more sustainable 15 per cent, from a peak of 25 per cent.
China’s EV lead is unassailable – the Global North simply can’t compete
With much of Europe having taken sides with the US, the Global South is an obvious new battleground for China to focus on, whether it be Asia, Africa, Latin America or the Middle East. And the outcome of the battle is far from clear.
As Tran observes, China’s offer of moderately priced EVs and other products that enable a green revolution is likely to be a strong lure for Global South consumers and governments alike.
Rich nations won’t meet energy transition goals by shunning Chinese firms
For now, China is on the back foot as it grapples with problems in its property sector and local government finances, in addition to a barrage of criticism from piqued Western sources that has diverted both foreign business investments and portfolio investment from its shores.
But these attacks seem to stem more from a defensive weakness than self-confidence, and the competitive weaknesses of Anglo-Saxon countries coupled with a possible stock-market-induced financial crisis could tip the balance before long. He who laughs last laughs longest.
Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs