Above page content

    Site map  Cookie policy

Features

China and the US find agreement difficult on net zero

The US stands accused by Beijing of menacing China with worsening military threats, economic and technology blockades, attacks on its financial system and attempts at political and diplomatic isolation.

The US stands accused by Beijing of menacing China with worsening military threats, economic and technology blockades, attacks on its financial system and attempts at political and diplomatic isolation.

by
Charles Stanley

in Features

13.09.2021

When John Kerry arrived in Tianjin to talk to the Chinese Foreign Secretary and other high-ranking political figures about a joint approach to fighting climate change, they did so by video link with the senior Chinese staying in Beijing.

As some remarked, this was a contrast with a friendly reception for the Taliban representative who met the Chinese Foreign Secretary in person on his recent visit. The video talk and the other negotiations with more junior officials did not go well for Mr Kerry. Whilst the US assures us it made strong representations about the growing numbers of new coal power stations China is building, the Chinese tell us they used the opportunity to highlight wide-ranging disagreements.

Climate entwined with wider politics

China’s view was there could no special relationship with the US and the West on climate change all the time China was subject to what she sees as provocations over Taiwan, the South China Sea, technology trade and other matters.

The West had hoped that November’s COP26 United Nations climate conference in Glasgow would see a great breakthrough with the world’s two largest generators of CO2 – China and the US – committing to large reductions to change the world outlook. Between them, China with 28% of the world’s carbon output and the US with 15% account for 42%. Add in the EU and you have more than half. Instead, China declined to make a good offer and seemed to be happy with COP26 falling well short of ambitions – with the world’s largest generator of CO2 declining to help much all the time the West took a tough stance on a range of other issues.

An important immediate aim of the forthcoming UN conference was to be the elimination of coal as soon as possible from power generation and wider use. China generates around two-thirds of its massive electricity output from coal. Germany is still at a quarter and is only willing to agree to the total phase-out of coal as late as 2038. The decision to go ahead with a large expansion of coal strip mining in Rhineland Westphalia, the homeland of the new CDU leader, has become a contentious issue in their election.

In recent days, light winds and overcast skies in various locations have placed strains on power generation. Some western countries have had to rely more on coal as wind power drops off, which has not been helpful for the development of the argument in favour of the complete elimination of coal-fired power.

As the leading countries look forward to an electrical revolution, they need to be thinking about more overall power generation, and to settle on green ways of generating enough reliable power. They are going to need new nuclear, nuclear replacement, more hydro, more biomass and other dependable sources of power. They are also looking at the possible role of hydrogen in the wider future energy supply. Wind and solar can let you down just when you need them most.

Frosty dialogue

The US President decided on a direct call to President Xi Jinping of China on 9 September to see if he could improve the rocky relationship. The short statement from the US side implies it was a difficult call. The best the US could conclude was how they discussed: “The responsibility of both nations to ensure competition does not veer into conflict”. Doubtless, Mr Biden found a newly invigorated and tough China. China despises weakness and will have seen the blow to US power and prestige from the Afghanistan retreat. The Taliban may have given them useful information about the last days of the US in Kabul. As the independent Chinese blogger who is allowed by the Chinese authorities put it:

“The USA menaces China with worsening military threats, economic and technology blockade, attacks on our financial system, and attempts at political and diplomatic isolation”.

Many other worrying statements in the blog can be seen unfolding in official policy, from the criticism of so-called non-masculine men appearing on TV through to the attack on “get rich capitalists” and anyone pursuing their own cult of personality.

China intends to press the US harder arguing that Washington has made a “major strategic miscalculation” in its approach. It means little co-operation over climate change, the West’s favourite cause. China plans to keep on burning fossil fuels and undercutting western goods in world markets.

China also plans to consolidate her alliances with those countries and movements which dislike the US most. Hence the warm reception for Mullah Baradar from Afghanistan. The continuing tensions between the US and China are not helpful for either the green revolution – or for the good spirits of equity markets.

Nothing on this website should be construed as personal advice based on your circumstances. No news or research item is a personal recommendation to deal.

Get in touch

Find out more

Our focus on clients has endured since the foundation of Charles Stanley in 1792 and has helped make us one of the UK's leading wealth management firms. Your interests give shape to everything we do.

Please call us to talk about your circumstances or complete the enquiry form.

020 3797 1783

Make an enquiry

If you have some questions we'd be happy to help.

Get in touch

Coronavirus (COVID-19)

Our latest information

Stay updated

Subscribe to our weekly email newsletter.

Subscribe here

Local Office

Your local office

Your local Charles Stanley office can help advise you on a wide range of investment management services.

Select an office

Share

Newsletter banner signup