Germany’s new China Strategy – A roadmap for climate foreign policy
Germany’s new China Strategy – A roadmap for climate foreign policy
WRITTEN BY BELINDA SCHÄPE
18 August 2023
After months of consultations between the different arms of the German government (which often hold opposing views), the country finally published its inaugural Strategy on China in July 2023. Prominently outlined in this document is a vision for a new approach to the bilateral relationship and climate change — a key challenge of this century. “It will not be possible to overcome the climate crisis without China”, the strategy states, with climate change remaining one of the few areas in which Germany still sees China as a partner.
Some analysts have criticised the envisaged climate cooperation in the strategy as naïve, arguing that Beijing's one-party rule will make the desired open scientific and civil society exchange impossible. In addition, there has been ambiguity on how climate cooperation can be successful within an increasingly tense relationship, and if cooperation in this area should be sought at the risk of undermining other objectives.
However, this is exactly what the strategy tries to avoid. Instead, it envisages climate engagement with China becoming more strategic and outcome-focused in holding China to higher levels of accountability and aligned with targets in related policy areas, such as trade, green tech, and multilateral finance. The new German China Strategy sets an example of what an effective climate foreign policy could look like.
Calling on China to live up to its global responsibilities
China wants to portray itself as a responsible major power and has set itself a number of ambitious climate targets. In its China Strategy, Germany appeals to that ambition and calls on Beijing to live up to its responsibility as the world’s largest emitter and economic powerhouse.
Germany calls China out for “continuing to expand its coal-fired power generation capacities”. In the past year, despite Xi Jinping's pledge to "strictly control" coal power, Beijing has permitted a record number of new coal power plants. Half of the world’s coal power plants are based in China and it now accounts for 72 per cent of global coal pipelines.
This recent expansion sits in stark contrast with Xi’s pledge, as well as the global trend of phasing out the 'dirtiest' of fossil fuels. Germany’s intention “to conduct an intensive dialogue with China on phasing out coal” is an important step in the right direction. However, it remains to be seen to what extent a new dialogue would be able to change Beijing’s calculations regarding its energy security concerns.
Germany’s China Strategy is a first attempt to address climate change in a key foreign policy strategy, encapsulating all related areas, and going beyond empty cooperation rhetoric.
The strategy also sets out expectations for China’s role in financing the global green transition and adaptation to climate impacts. With China being the second-largest economy globally, Germany expects Beijing “to contribute to climate action in accordance with its means and responsibility”. While Beijing has no formal responsibility to contribute to international climate finance under the Paris Agreement, it has yet to meet its own pledges on climate finance.
Despite Xi’s pledge to green the Belt and Road Initiative, Chinese financing of climate-related projects represents less than 2 per cent of the hundreds of billions of dollars spent overseas per year. Moreover, China has only delivered 10 per cent of the USD 3.1 billion it pledged for a dedicated South-South Climate Cooperation Fund since its launch in 2015. As China’s wealth and emissions grow, there are growing expectations for Beijing to financially support developing countries in addressing climate change.
Germany also wants China to play “a bigger role in supporting multilateral funds for overcoming global challenges in the future”. Reforming the multilateral financial system is central to responding to emerging debt crises in several developing countries and tackling climate change.
As one of the world’s largest creditors, China should play a constructive role in implementing the road map that was agreed on at the recent Paris Summit for a New Global Financing Pact in June 2023. China and Germany participated in this summit and have the potential to make a difference in terms of carrying the agenda forward. The two countries can also work together in negotiations aimed at reforming multilateral development banks and restructuring debt in the G20 and at the annual meetings of the World Bank and IMF.
Mainstreaming climate into foreign policy and economic agendas
As climate action becomes more material to economic interests, Europe and China will both need to compete and cooperate with each other. This means that climate change will need to be integrated across domestic and foreign policy agendas. Extreme weather events across the world and global trade disputes over green tech supply chains have illustrated that climate change can no longer be separated from these wider issues. Germany’s China Strategy is a first attempt to address climate change in a key foreign policy strategy, encapsulating all related areas, and going beyond empty cooperation rhetoric.
By integrating climate across its China Strategy, Germany sends a clear signal that it will not allow for climate to be a standalone issue shielded from the broader geopolitics or for climate cooperation to become a (geo)political tool. China maintains that climate cooperation cannot remain an ‘oasis in the desert’ amid tensions in the wider relationship and that it cannot be divorced from overall relations. This was illustrated when Beijing unilaterally suspended climate cooperation with the US in reaction to Speaker Pelosi’s visit to Taiwan last summer.
In Europe, China watchers were critical of letting China dictate the terms of climate cooperation and potentially making concessions in other areas, such as human rights. By mainstreaming climate into its overarching foreign policy towards China, Berlin makes clear that there will be no trade-offs in other areas in order to keep climate cooperation going.
Connecting competition and de-risking of green technologies to the climate agenda is a key case in point. China dominates global supply chains on green technologies from sourcing and processing critical raw materials to producing solar panels. About 95 per cent of solar panels deployed in Germany are manufactured in China, creating vulnerabilities for products that will be crucial for Germany’s energy supply and transition in the future.
The International Energy Agency (IEA) has called upon countries to diversify their clean energy supply chain to manage these vulnerabilities. In its China Strategy, Germany acknowledges that China’s “market and technological dominance […] has already created unilateral dependencies in critical areas”, and it in response aims to “strengthen European innovativeness and production” while “diversifying sources of supply”.
The new strategy links Germany’s climate, economic, and security interests. This is evident in Germany affirming its support for the EU’s Carbon Border Adjustment Mechanism (CBAM), which has been criticised by China as being a unilateral and discriminatory measure.
The proof will be in the pudding
A whole-of-government China Strategy is a significant achievement for Germany in which responsibilities are divided across ministries with the three coalition parties holding diverging positions on China. However, as always with a strategy, the real work has only just begun. The strategy provides a map to navigate the challenging journey ahead but does not guarantee that the journey will be successful. The real impact will come from its implementation. In order to call the strategy a success, there are a few benchmarks to look out for.
First, as the strategy now links a range of issues together, coordination across different ministries and across the EU will be central. The new high-level Climate and Transformation Dialogue and working group on industrial decarbonisation, add to a number of working groups already in place. This makes good coordination among the different implementing agencies even more important to achieve the strategy’s overarching targets and prevent contradicting signals.
Germany should speak with one voice and clarify the purpose of the new dialogue and working group vis-à-vis existing formats. Similarly, the German government should ensure coherence and synergies with the National Security Strategy and the planned climate foreign policy strategy. While EU policies are referenced strongly across the document, this also needs to translate into working-level coordination with other member states, as well as Brussels.
Second, climate engagement with China needs to deliver tangible results. Technical cooperation remains a key pillar of Germany’s engagement with China, which is a good strategy in times when political dialogue is increasingly difficult. However, any climate cooperation projects with China should follow a strategic approach with clear deliverables.
To justify climate cooperation with China in times of heightened competition and geopolitical tensions, Germany needs to deliver concrete results which the Climate and Transformation Dialogue aims for. So far, there is little detail in the strategy or the recent Germany-China Memorandum of Understanding on what the concrete policy measures for a more outcome-focused approach will be.
These could come in the form of partnership-owned demonstration projects with high emission reduction impacts or agreed international standards for industrial decarbonisation and carbon accounting. They should result in China stepping up its responsibility regarding climate change by supporting the global transition as a leading green tech power and sharing lessons learned on how it got there.
Finally, to credibly hold China accountable, Germany needs to do its homework regarding its own climate policy pledges and communicate this clearly. For example, Berlin’s mixed signals in response to the energy crisis created misconceptions in China about the country’s commitment to its coal phase-out targets. Germany needs to send a clear message to China that the energy crisis following Russia’s invasion of Ukraine has resulted in an accelerated energy transition with renewables at the centre of Europe’s energy security strategy. This would put credibility behind Germany’s call on China to step up its game.
Germany’s new China Strategy provides a good example of what climate foreign policy can look like. Now it is time to make it happen.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Belinda Schäpe works as a Policy Advisor on China and EU-China relations at the globally renowned climate-change think tank E3G. In her role, she advises policymakers and civil society on their diplomatic engagement with China on climate-related topics, facilitates dialogue between Chinese and European stakeholders, and regularly comments in international media outlets. Before joining E3G, she worked as a Blue Book Trainee at the European Commission. Previously, she also worked with China Dialogue, the Centre for Multilateral Negotiations, the China International Investment Promotion Agency of the Chinese Ministry of Commerce, and the German Trade Office in Taipei. Belinda Schäpe holds a double master’s degree in International Affairs from the London School of Economics and Peking University and a bachelor’s degree in Chinese Studies and Business Administration from Tübingen University. Image credit: Flickr/Asian Development Bank.