China's green future: On the rise with greentech
In China, there are now various examples of green technologies of the future in which the country has caught up considerably in terms of production. The Chinese government has named three of these as the “new growth drivers”: E-mobility, battery technology and renewable energies. Politics also plays a key role in the economic success of the People's Republic, as many high offices are held by engineers. This is also reflected in the direction of funding. In 2022, the country spent the equivalent of around 400 billion euros on research and development. It was also recognized early on that the development of e-mobility technology takes time. The government has long been strategically united in China, stands for long-term planning and thus provides Chinese companies with investment security. The high number of patents underlines the country's efforts to massively boost its own economic performance in the sector.
China is exporting itself to the forefront
Battery technology and the electromobility industry also benefit considerably from the fact that China has numerous state incentive funds (GGF) that promote the country's own companies. In addition, the country has the great advantage of keeping the value chain for the construction of electric vehicles in its own hands: Six of the ten major battery manufacturers, for example, come from China, and 60% of all e-cars produced worldwide are now built there. This has made the country the largest exporter in the world. Germany was already overtaken two years ago in terms of exports of e-cars, and a few months ago Japan also joined in.
China is also making progress with electrification in Africa because the People's Republic recognized the strategic opportunities on the ground early on. In countries such as Morocco, Nigeria and Kenya in particular, the development towards e-mobility is progressing, especially in public transport. China has now overtaken both the EU and the USA as the most important economic player. With a turnover of around 261 billion euros, the country was Africa's second-largest trading partner last year.
However, one consequence of the high level of state subsidies and high production in China is overcapacity. This is leading to a tough price war in the country itself, while some exporting countries are expecting a strong wave of exports of cheap Chinese e-vehicles. In response to this, countries such as the USA and India have already imposed import restrictions because they want to keep developments under control.
Recycling considered early on
The goal of increasing investment in greentech in China has several purposes: creating industrial pillars for green technologies, serving the export market and combating local air pollution.
Parallel to the development steps, China is also not ignoring the important issue of recycling. Although there is still little need to recycle batteries at the moment, this is very likely to change in the next decade. According to analyses by McKinsey, around 100 million recyclable batteries could be collected worldwide by then. The Chinese government also has a plan for this: in recent months, it has issued new guidelines to ensure the expansion of the recycling industry. In addition to ecological reasons, the recycling business is a lucrative one and therefore once again a sector that China could pioneer.
Sources: handelsblatt.com, Dana Heide & Thomas Jahn, 26.02.2024
heise.de, Timo Daum, 18.02.2024
electrive.net, Domenico Sciurti, 10.02.2022, aktualisiert am 03.01.2024
Image: Unsplash
