This paper examines China’s domestic and foreign policymaking for the energy transition, and its role in promoting multilateralism and international collaboration on building a sustainable world.

China’s engagement in the climate agenda is usually viewed through a domestic policy lens. A different, at times overlooked, dimension is China’s role in international collaboration and coordination in climate action. This is becoming increasingly important, reflecting growing and intensifying economic ties between China and the rest of the world, particularly emerging markets and developing economies, including those of the Belt and Road Initiative. As these countries begin to chart their own paths to sustainable development, partnerships with China are poised to become more and more important.

The authors argue that there are now opportunities for China to demonstrate global leadership in relation to its support for the world’s transition to renewable energy; its role as provider of finance and one of the world’s biggest creditors; and as a pioneer in research and innovation for green technologies and solutions.

Summary of recommendations

On the transition to renewable energy, China should: expand its energy storage capacity; promote green hydrogen from electrolysis and upgrade the existing natural gas storage system to accommodate hydrogen; support further development of New Energy Vehicles (NEVs); increase distributed renewable generation in Central and Eastern China; and go further in reforming the electricity market.

As a provider of finance, China should: focus on promoting sustainable economic development in the countries to which it lends to minimise the risk of climate-related debt crises; engage with fellow creditors through multilateral arrangements; continue and step up its participation in multilateral climate and sustainability initiatives; look to join initiatives such as the Coalition of Finance Ministers for Climate Action; and encourage more of its private sector institutions to join the Glasgow Financial Alliance for Net Zero.

On fostering climate research, development and innovation, China should aim to influence world standards, supply chains and drive innovation in technologies that will help combat climate change.

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