China-UK green cooperation: a promising future
Published: May 29, 2024 05:23 PM
Illustration: Liu Rui/GT

Illustration: Liu Rui/GT

The green and sustainable development has become an irreversible trend amid rising global challenges such as climate change and biodiversity crisis. As major economies, China and the UK have significant influence in promoting green transition. Green cooperation between the two countries has huge potential in the eyes of industrial players and policymakers.

Green finance enables green transition

Recent years have witnessed much development in conservation-related financial services. Green finance has become an important area of cooperation between China and the UK, both major financial powers. Since 2015, Chinese financial institutions have issued green bonds and sustainable development bonds in the UK with a total value of over $12 billion, reflecting a strong demand for cooperation. During his visit to China in 2023, Nicholas Lyons, then Lord Mayor of the City of London, said that London, as an important global financial centre, would like to continue to strengthen UK-China green finance cooperation, accelerate global transition and work together to move toward a sustainable future. This year, Lord Mayor Michael Mainelli expressed during his China visit in March that the City of London will continue to actively participate in China's high-standard opening-up and push for more results in UK-China green finance and economic and trade cooperation.

At the same time, green finance cooperation with China has accelerated the green transition in the UK and other parts of Europe. In September 2023, Bank of China London successfully issued a three-year $600 million green bond, and for the first time, all the proceeds of the issuance will be used to fund new or existing green projects in the UK, France and the Netherlands, with project categories ranging from renewable energy to clean transport.

New energy and green tech cooperation gains momentum 

China is making genuine efforts to advance the energy revolution and promote green development. Non-fossil fuel power sources now account for 54.6 percent of China's total installed energy capacity. China also supplies 60 percent of the wind power and 80 percent of photovoltaic equipment worldwide. Its production and sales volume of new energy vehicles rank first in the world, and more than half of the world's electric cars run on its roads. These bring enormous opportunities for China and the UK to enhance cooperation.

China's NEVs companies are heading to the UK market, as they see huge complementarities. Today, people can easily see BYD electric buses and Geely taxis on the streets of London. "In terms of investment into the UK, we've seen Chinese companies set up research and development centers," said SMMT (Society of Motor Manufacturers and Traders) chief executive officer Mike Hawes, citing a list of Chinese firms which have invested in the country to develop double and single decker buses, including Geely, Changan, SAIC and BYD. 

Green technology cooperation is promising. Lord Grimstone, then UK minister of state at the Department for International Trade and Department for Business, Energy and Industrial Strategy, emphasized the broad prospects for cooperation between the UK and China in industrial green transformation and that Chinese investors have huge potential to play a major part in offshore wind energy, energy storage, electric vehicles, batteries and green finance industries.

John Edwards, then trade commissioner for China, also agreed that the UK and China have complementary needs and huge potential for green tech cooperation and industrial investment, and that there is great potential for R&D cooperation in hydrogen energy, floating offshore wind power and other new technologies.

Policy exchange creates enabling environment

Effective policy communication and an open, fair and non-discriminatory market environment are important facilitators for better cooperation. China and the UK held their first ever Industrial Cooperation Dialogue in 2022. China expressed its willingness to deepen policy coordination, standards alignment and technology cooperation with the UK in NEVs, digital economy and green manufacturing. China stands ready to jointly promote stable and unimpeded industrial chains and supply chains, and create an open, fair and non-discriminatory market environment to further reinforce bilateral industrial cooperation. Kwasi Kwarteng, then UK secretary of state for Business, Energy and Industrial Strategy, said that the Industrial Cooperation Dialogue is of great importance for both countries to realize targets of carbon and emission reduction, drive the development of NEVs, and promote digital industrialization. He also expressed hope for more pragmatic cooperation in the future.

At present, China is advancing the process of modernization of harmony between humanity and nature. China remains as determined as ever to pursue green development that prioritizes eco-environmental conservation and protection. There are broad prospects for green cooperation between China and the UK, and it is believed that with the support of both governments and the joint efforts of enterprises, the cooperation will flourish and strongly promote the green development of the two countries as well as the global green and low-carbon transition. 

The author is a researcher on global affairs. opinion@globaltimes.com.cn