Headline issue

China has grown rapidly – often at double-digit rates – for more than three decades
by following a strategy of high investment, strong export orientation and energy-intensive manufacturing. While this growth lifted hundreds of millions out of poverty, it also heightened problems of inequality – personal, regional and urban-rural – and intensified pollution, congestion and greenhouse gas (GHG) emissions.

Recognising these difficulties, as well as the maturation of China’s economy in terms of skills, productivity and rising wages, and slower growth in some of China’s traditional export markets, the economic strategy has changed. China has now entered a new phase of economic development – a “new normal” – focused on better quality growth. From structural changes in the economy to explicit policies on efficiency, air pollution and clean energy, China’s new development model is continuing to promote economic growth while driving down its GHG emissions.

Key findings

  • China is moving decisively to a “new normal” – a development model based on the notion of better quality growth.
  • Under China’s new development model, its GHG emissions are likely to peak by 2025, and could well peak earlier than that.
  • China’s transformation has profound implications for the global economy, and greatly increases the prospects for keeping global GHG emissions within relatively safe limits.
  • To reduce its emissions at a rapid rate, post-peak, China will need to deepen its planned reforms in cities and in the energy system, supported by a concerted approach to clean innovation, green finance and fiscal reforms.


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