China has proven itself to be a serious contender in the clean economy. It continues to dominate the production of low carbon technologies such as electric vehicles, batteries and solar. Boosting supply chain resilience and innovation in clean economy sectors remain a priority in China’s 14th Five Year Plan.
The EU, on the other hand, has put forward a proactive agenda to sharpen its edge in the green economy in the last five years. The EU is unlikely to compete with China on the cost of manufacturing and research spending on clean technologies, but it remains more competitive on the capacity to innovate. It has made great strides in integrating the economic, social, and climate agendas with the European Green Deal and a suite of policies. They have built a good basis for Europe to pull ahead in competition on clean technologies.
While Beijing did not outline a national strategy to rapidly decarbonise China’s economy in the 14th Plan, Chinese ministries and provinces are now working to develop their respective 14th plans based on the principles laid out in the national plan. Beijing will be in a better position to revise the country’s emissions targets once these ministerial and sub-national plans are finalised in late 2021.
This paper assesses the climate, energy and industrial strategies proposed in China’s 14th Five Year Plan and their alignment to China’s climate ambition. It offers an account of China’s and the EU’s efforts in boosting their competitiveness in the clean economy in the last five years and highlights what the EU might do to engage China on raising climate ambition and increase its own competitiveness in the clean economy.