When Rishi Sunak announced that the 2030 ban on new petrol and diesel cars would be delayed by five years, he framed it as a common-sense move. What he didn’t say is that he had been advised that, had the original deadline stuck, Britain’s electric vehicle (EV) market would have been handed over to China. Going green, Sunak was told, would mean going Chinese.
At the COP climate summit in Dubai starting this weekend, other leaders will have reached the same conclusion. They’re all a bit late. With little fanfare and a lot of state help, Chinese companies are now world leaders in wind, solar, hydro, lithium batteries and electric cars – dominating either the sectors or the supply chains that support them. The world’s greatest polluter, which emits twice as much greenhouse gas as the United States, has become the engine of the green revolution. COP’s emission-reduction targets may be good for the planet. They will be even better for the Chinese economy.
Xi Jinping spotted the business opportunity long ago. ‘Clear waters and green mountains are mountains of silver and gold,’ he said two years ago at another COP summit. The gold is pouring in. Chinese companies produced more than three-quarters of the world’s solar panels last year (and half of Britain’s). They also made three–quarters of the world’s lithium-ion batteries, essential for electric cars. Within a decade, Chinese companies are set to own half of all the lithium-ion battery factories in Europe. A third of EVs sold in Britain are made in China: a figure expected to rise quickly as marques such as MG, BYD and Nio become more popular. They’re sold at prices that European and American rivals struggle to compete with.
Solar, batteries and EVs form what Chinese state media calls ‘the new three’, or xinsanyang, replacing the three manufactured goods that used to drive the economy (clothing, furniture and home electronics).