Chinese Firms' Role in Climate Action
To achieve climate and decarbonisation commitments, governments must be open to green technology and investment from world-leading Chinese firms.
An estimated $5 trillion of investment is needed annually to reach the Paris Agreement climate goals, raising the question of how to finance this investment.
- Countries with current account deficits can either import savings from countries with surpluses, such as China, or
- endure higher interest rates and less domestic consumption to generate domestic savings.
Countries that block Chinese foreign investment on political grounds are choosing the latter, along with inferior technology to that available anywhere else in the world.
Author's summary: Chinese firms can aid climate action with green technology and investment.