PR CHINA

Today, climate protection is an integral part of German foreign policy. In this context, Germany considers China’s role in international climate policy to be particularly important. China is both the world’s largest emitter of CO2 and largest consumer of coal. On the other hand, China’s expansion of renewable energies is unrivalled anywhere else in the world. If China succeeds in rapidly driving forward the energy transition it has already initiated, this will not only directly impact the global CO2 balance sheet but will also have a signal effect on other countries. Cooperation with China on environmental and climate policy thus helps protect global public assets.

Germany itself is pursuing an ambitious climate policy and has assumed a leading role among industrialised nations in recent decades in the research and development field for energy, climate and environmental technology (green technologies). Building on this role, and in most cases in close cooperation with the corporate research landscape, separate economic sectors have developed, each with start-ups, small and medium-sized enterprises, and large corporations, which in addition to the domestic market now contribute significantly to Germany’s export economy. China is the world’s second largest economy and Germany’s largest trading partner, making it of particular economic importance in this regard. For German industry, China is an important sales market for green technologies. Thanks to China, these technologies can be introduced and scaled up comparatively quickly, making it possible to lower their costs. 

China has the good fortune of being able to rely on domestic raw materials, for example in rare earths, for the expansion of its renewable energies. And beyond its borders as well, China is investing in securing raw materials such as cobalt and lithium. Germany has few domestic raw material deposits, which are, however, necessary for the production of renewable energy technologies. Due to this shortcoming, Germany has also become a leader in the development of resource efficiency technologies and the improvement of material efficiency, along with the required infrastructures, such as the circular economy. Germany is therefore interested in cooperating with China in terms of ​​raw material efficiency, in order to gain access to resources and to reduce its own dependencies.

China’s interest in climate cooperation with Germany is high. China is striving to become the leading nation for the development and production of green technologies. At the same time, the industrial production of goods is to be made more environmentally friendly and sustainable. This entails specific climate policy targets, such as achieving CO2 neutrality by 2060 and passing peak CO2 emissions before 2030. The energy, industrial, transport and circular economy sectors will all need to contribute to achieving these targets. In these areas, international exchange and cooperation for the development of environmentally friendly technologies, equipment, and services and infrastructures with China are possible. 

Great hope is placed in German technologies for aiding in the achievement of these goals. China no longer wants to be merely the global workbench here, but is increasingly expanding its own domestic value chains, as is already the case to some extent in the solar cell and battery industries. This means above all promoting innovation at home and developing the country’s own green technologies. Strategies such as “Made in China 2025” are to play a role here. China places priority on benefiting from Germany’s experience in implementing climate protection measures and learning from the relevant technologies developed here in the energy and environmental sector. This also includes cooperation and exchange in further advancing national emissions trading in China. 

China’s willingness to engage in climate cooperation with Germany is taking on an increasingly competitive tenor. In other words, China is now making considerable progress in many areas of green technology development and production and has thus become a rival for Germany. This circumstance is increasingly shaping the framework for Sino-German climate cooperation. The Chinese environmental industry wants to learn from Germany but also strives to overtake it as the leading location for green technologies. Competition is particularly fierce in areas such as the development of electric vehicles, new manufacturing materials and hydrogen applications. China’s domestic raw materials and strategically well-positioned international sources of raw materials give it a strong economic foundation in this competition, factors on which Germany is also dependent.

In general, cooperation between Germany and China in the field of climate and environmental protection can be described as close. In addition to the Sino-German climate partnership, which has been relaunched several times, there are also various biodiversity and energy partnerships. Complementing these are numerous joint research programmes, climate policy dialogues, experience exchanges and advisory programmes, all implemented at a wide variety of levels. The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) is a key player in this process. In addition, the two countries have close economic ties in the field of energy and environmental technology, which, in view of China’s intensified climate policy objectives, are increasingly encompassing other industrial sectors that are particularly important for Germany, such as the automotive and chemical industries. This field of exchange also involves research collaborations between universities and non-university institutions that span broad parts of the sustainability spectrum. An expansion of climate cooperation is furthermore regularly discussed at the highest political levels.

The close Sino-German exchange in environmental and climate policy is increasingly being influenced by competition from global systems. The trusting cooperation in this area that has grown over decades could be impaired as a result. In particular, the combination of environmental and climate policy with other more contentious issues could make cooperation more difficult. This may complicate the Sino-German environmental and climate dialogue, which is one of a dwindling number of areas of common interest, while also affecting economic cooperation, which increasingly relies on green technologies.

The Sino-German climate partnership offers plenty of room for stepped-up cooperation and new approaches on both the multilateral and bilateral levels. Current political concepts such as the Climate Club; improving energy security through renewable energies; developing strategies for adapting to climate change, especially in agriculture; and agreeing on common standards in the energy, climate and environmental industries provide extensive opportunities for intensifying existing collaborations and building new ones. The two countries’ divergent viewpoints, realities and intentions certainly clash in these areas, but if both sides are willing to compromise, new opportunities can arise for cooperation. What’s more, there are also numerous potential areas for economic cooperation, such as the development and exchange of circular economy systems, accelerating the introduction of green technologies, enhancing energy efficiency, and cooperating in the field of emissions trading, especially with regard to its financial dimensions. German companies wish to benefit from the transformation of the Chinese economy toward greater sustainability and are willing to invest in China. China, on the other hand, is open to international exchange and cooperation to help it achieve its own ambitious climate goals. 

What is necessary here is to overcome old political hurdles as well as newer ones, which are not getting any smaller in view of the heightened geopolitical tensions worldwide. As climate policy on both the German and Chinese sides is increasingly linked to other policy areas, this may make it more difficult for any partnership in this area. Climate and trade policies, for example, increasingly go hand in hand. This circumstance is particularly evident in the planned European Carbon Border Adjustment Mechanism (CBAM). The growing rivalry between Germany and China in the field of green technology development presents an opportunity to minimise global costs for climate change mitigation. But for that to happen, an environment must be created with which both sides are willing to comply, enabling fair trade based on common standards.

German foreign policy by all means perceives climate policy as an important partnership issue, but one that is increasingly taking on a competitive character. This competition is healthy because it leads to the development of market forces that tend to reduce CO2 emissions. However, such competition (in other economic sectors as well) requires commonly accepted rules and standards that prevent any one country from obtaining an unfair advantage. For German companies, these common rules of the game are of central importance if they are to participate in the growing sustainability economy in China. This competition also includes international competition for resources. 

Dr. Christian Hübner heads the KAS regional programme Energy Security and Climate Change Asia and Pacific.