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China's economic stimulus after COVID-19

  • Leader
    May 21
    China may struggle to meet its climate pledges this year as it turns
    to heavy industry and carbon-intensive projects to shore up its
    coronavirus-stricken economy, government researchers and analysts say.To
    get more Shanghai economy news, you can visit shine news official website.

    China
    pledged to cut "carbon intensity" – the amount of CO2 emissions it
    produces per unit of GDP - by 40 per cent to 45 per cent from 2005-2020
    as part of the global climate change pact it signed in Paris in 2015.
    The world's biggest greenhouse gas producing country had been on course
    to reach its target at the end of last year, prompting calls for Beijing
    to set more ambitious goals.

    But experts say the economic damage
    done by the pandemic - especially to the less carbon-intensive service
    sector - has made the target far harder to meet. "We had thought it
    wouldn't be a problem for China to meet the carbon targets if previous
    efforts continued to be carried out," said an expert at a think tank
    affiliated with China's state planning agency, the National Development
    and Reform Commission (NDRC). "But the coronavirus outbreak and the
    approaches to economic stimulus may bring uncertainties," said the
    expert, who declined to be named as he is not authorised to talk to the
    media.In its own five-year plan, China pledged to cut carbon intensity
    by 18 per cent from 2015 to 2020, and energy intensity - the amount
    consumed per unit of economic growth - by 15 per cent. By last year,
    energy intensity had fallen 13.2 per cent compared to 2015, according to
    Reuters calculations based on official data.China had also slashed
    carbon intensity by 18.4 per cent compared with 2015 and by more than 45
    per cent compared with 2005, putting it on course to meet its own
    target as well as its Paris pledge. The coronavirus outbreak caused
    China's carbon emissions to fall 25 per cent in February, according to
    one estimate, and another study published this week said CO2 emissions
    from fossil fuel sources fell by as much as 17 per cent a day worldwide
    in April.

    But there are already signs China is turning to "dirty"
    industries and investments to kickstart its economy, which slowed for
    the first time in decades in the first quarter.More heavy industrial
    output and infrastructure construction over the rest of the year,
    combined with a weakened service sector, will raise the amount of CO2
    produced per unit of GDP growth, analysts say. "The magnitude of the
    coronavirus risks turning things upside down... Much will depend on the
    economic recovery policies Beijing sets over the next few weeks," said
    Li Shuo, senior adviser with environment group Greenpeace. The
    Helsinki-based Centre for Research on Energy and Clean Air (CREA) warned
    on Monday that China has usually relied on carbon intensive sources of
    growth to recover from previous economic shocks - including SARS and the
    global financial crisis. Last month, steel production hit its highest
    daily rate since June 2019, while daily coal and cement production also
    surpassed last year's average. Air pollution rose for the first time
    this year. The NDRC last week announced plans to expand domestic demand
    and boost investment in traditional infrastructure projects such as
    railways and water treatment.

    It is also pushing for more new
    high-tech infrastructure, including more efficient ultra-high voltage
    (UHV) power transmission lines. Beijing also approved five coal-fired
    power plants in March, with a combined capacity of 7.96 gigawatts, to
    provide power for two UHV lines, and analysts say more coal power
    construction could go ahead this year. "Projects are kings," said an
    official with a government think tank in Shanxi province, a top
    coal-producing region. "All officials in Shanxi have been told to push
    forward projects in the pipeline and attract new projects to bolster
    economic growth." "Local authorities are facing increasing pressure to
    bring economy back on track in the coming months, albeit with risks of
    adding emissions," said an official at China's coal planning institute,
    speaking anonymously because he was not authorised to speak to the
    media.