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, prompting the question of how to fund this effort.
- Countries with current account deficits have two options: import savings from countries with current account 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.
It is crucial to increase the speed and ambition of the green transition.
Author's summary: Chinese firms can aid climate action with green tech and investment.