A Win-Win Deal: China’s New Energy Capacity Bolsters African Green Development

2024-06-20 22:10

The recent years have seen rapid growth of the new energy sector in China. In 2023, its export of the New Trio products, namely new energy vehicles, lithium batteries and photo-voltaic products, exceeded one trillion RMB yuan (approximately 3.55 trillion Kwacha). It is leading the world in technology and production capacity in the sector, while the African market has shown a substantial demand. When it comes to cooperation in green transformation and development, China and Africa are natural partners, whose complementary strengths are cut out for each other. However, a so-called Chinese overcapacity in the new energy sector leading to unfair competition theory has been hyped recently by certain countries, with the allegations that China is producing more than 100 percent of global demand of new energy products, thus undermining competition and putting at risk livelihoods and businesses around the world. This narrative goes against economic laws and ignores Africa's urgent need for new energy development and hinders green transformation worldwide.

First, China's new energy industry brings development opportunities, not overcapacity, especially to the African Continent. African countries are rich in green energy resources and are eager to translate them into opportunities for development. Zambia, for example, is endowed with plenty of resources needed for hydro, wind and photo-voltaic power generation, and the Zambian government has introduced a series of policies to promote the development of the sector. Cooperation in the field of green energy between China and Zambia holds out great promise, as it will combine Zambia's resource advantage and China's capacity. The fallacy that global demand for new energy products has ceased to grow is turning a blind eye to the need, potential and determination of African countries, including Zambia, to develop their green energy industry.

Second, the comparative advantage of China’s new energy products lies in technological innovation, size of the Chinese market and a complete industrial chain, rather than government subsidies. Since its entry into the WTO, China has strictly complied with WTO rules on subsidies and conscientiously fulfilled its obligations to ensure transparency. The rapid growth in the exports of the Chinese New Trio offers more African countries access to affordable, reliable and sustainable clean energy, bridging the financial and technological gaps facing African countries as they strive to transition to green development. In essence, the hype of Chinese "overcapacity" are protectionist tricks to drive up prices of new energy products, in total disregard of the aspirations of African countries and their people for a better life through green development.

Third, the world is suffering from a shortage in new energy capacity, rather than overcapacity. Both the United Nations Conference on Trade and Development and the International Energy Agency have reported that in order to achieve global carbon neutrality, investment in new energy must be further accelerated. IEA statistics show that global demand for new energy vehicles will reach 45 million and the demand for newly installed photo-voltaic capacity will reach 820 GW by 2030. In 2023, China produced 9.587 million electric vehicles and sold 9.495 million. Both figures accounted for over 60% of that of the global total, making China the world's No.1 EV manufacturer and seller for 9 years in a row. In the same year, China contributed over half of the global increase in renewable energy capacity of 510 million kilowatts. China’s wind power and photo-voltaic products are exported to more than 200 countries and regions around the world, significantly contributing to global green transformation. Currently, southern African countries are suffering from energy shortages caused by the ongoing drought. China believes that green energy development holds the key to solving this problem and stands ready to provide African countries with world-leading technologies and quality products.

2024 is a year to celebrate 60 years of diplomatic relations between China and Zambia, the Year of Business Cooperation designated by the two Heads of State, and the next Summit of the Forum on China-Africa Cooperation (FOCAC) will also be held this year. Green energy cooperation is an increasingly important part of China-Zambia cooperation, as a way to help Zambia achieve green transformation and tackle climate change in the long run. Projects such as Kafue Gorge Lower Hydro Power Project and Itimpi Solar Plant constructed by Chinese businesses are best examples of China's capability and readiness to provide the best solutions in the field of pumped storage, photo-voltaic power generation and other renewable energy industry. China is ready to work with African countries, including Zambia, to create a win-win solution where China's new energy capacity helps bolster African green development.

(by Mr. Wang Sheng, Chargé d'Affaires of the Embassy in Zambia)

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