Green economy will power China’s economic growth

Editor’s note: Chen Jiahe is the chief investment officer at Novem Arcae Technologies. The article reflects the author’s opinions and not necessarily the views of CGTN.

China has achieved incredible economic progress in the past four and half decades since the introducton of the economic reform and opening up policy in 1978. Looking into the future, the green economy that aims at reducing carbon emission and increasing the quality of GDP will become another growth engine for China’s economic development.

In the past four and half decades, China’s economic driver has changed from sector to sector. In the 1980s, the marketization of the economy was the most important engine for China. The production power unleashed by a market system brought double-digit growth for the country’s GDP. In the 1990s and 2000s, integration into the global trading system brought significant growth to the country’s economy. In the 2000s and 2010s, the development of the real estate industry and the building of massive infrastructure strongly supported the country’s economic growth.

At the end of 2023, these economic engines while strong, are not enough to offer much increment to economic growth. At this critical moment, China has adopted the green economy as a new direction for growth.

In the world today, excessive carbon emission has become a problem threatening the world. Global carbon emission has significantly increased since the industrial revolution, and rising global temperature has reached a level that is never before seen.

When discussing the consequence of global warming, the most frequent predictions are rising sea level and threats to low altitude areas, instability of global weather, the rising numbers of typhoons and hurricanes, etc. 

However, the global ecological system is too complicated to be accurately predicted by even the strongest computer in the world. The real answer to the consequences of excessive carbon dioxide emission and global warming is that we don’t know all the consequences, just like how we didn’t predict the catastrophic global financial crisis in 2008, which was a total meltdown of a financial system that was purely artificial and much less complicated compared with a massive global ecological system.

Given the gravity of potential consequences, China is taking up the responsibility that should be taken by the world’s second largest economy to counter carbon emission and slowdown global warming. The green economy is now a strategically important sector of the Chinese economy and can lead the country’s growth in the coming future.

One of the most important sub-sectors of China’s green economy is new energy vehicles. According to Bloomberg estimations, new energy vehicles sold in China will make up around 60 percent of the global sales in 2023. According to data published by the China Passenger Car Association, in the first 11 months of 2023, China had exported 1.6 million new energy vehicles, 87 percent more than a year ago. The Chinese companies that are specialized at producing new energy vehicles, such as BYD, Guangzhou Automobile and SAIC Motor, are also well known in the global market.

Besides new energy vehicles, China is also developing strong industries in other sectors of green energy, such as solar power, wind power, nuclear power and hydro power.

Take solar power as an example. According to data provided by the GCL System Integration Technology, a leading solar panel producer in China, solar panels produced by China in 2023 have taken up around 80 to 90 percent of the global market share. As the production of solar panel requires massive industrial capacity, China’s unique advantage in industrial production has been very well leveraged in this area, and has therefore, supported the reduction of global carbon emission by a massive extent.

In the nuclear power industry, China’s technology in building safe and lasting nuclear plants has been rapidly utilized. According to “The Report on the Development of China’s Nuclear Energy (2023)”, there are now 54 nuclear power plants operating in China, as well as 24 more plants under construction. China is now ranked the first place in the world, in terms of nuclear power capacity under construction. The massive increase in the use of nuclear power can make significant contributions to the reduction of global carbon emission. Currently, China’s nuclear power industry is leading with the fourth generation of nuclear power plants, which provides greater safety.

With the development of these green energy industries, China has not only reduced world carbon emission, but has also developed a massive green economy. With the scale of the green economy and the efficiency of China’s industrial system, we are positioned for greater confidence in China’s economic growth in the future.

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