Guide
China's strength in clean energy leads the world, causing concern in Europe and the United States. They have tried to suppress China with sanctions and additional taxes, but they have not been able to contain China's rise. China has strengthened innovation-driven, adhered to green and high-quality development, and successfully carried out "creative destruction" of the old global economic and industrial system, which is in line with the historical law of "replacing old things with new things" and setting an example for other developing countries in terms of innovation and development.
作者:马尔科斯·科尔德伊罗·皮雷斯 (Marcos Cordeiro Pires),巴西圣保罗州立大学国际政治经济学教授
In the fourth quarter of 2023, Chinese automaker BYD surpassed Tesla for the first time to become the world's No. 1 seller of pure electric passenger vehicles, and continued to lead the global new energy vehicle market with annual sales of more than 3.02 million new energy vehicles. This is a major achievement for BYD. In addition, the blade batteries produced by BYD have superior performance, with smarter automaticity and higher safety. It is worth mentioning that other Chinese automakers such as Great Wall, Chery and Geely have also made rapid progress in the global EV market.
China is also leading the way in other sectors related to the energy transition, such as photovoltaic panels and wind turbines. Last year, Chinese wind turbine manufacturer Goldwind ranked first in the world in terms of new installed capacity, and almost all of the world's major PV companies are from China.
China's high capacity to produce clean and renewable energy, which allows it to provide high-quality products at low prices, is now helping other countries develop their own clean energy production. But the strong competitiveness of Chinese companies has led to complaints from many European solar cell makers that they are cornering. As a result, the EU has imposed high "double anti-dumping" taxes on Chinese companies since 2013. However, these measures have not only failed to curb the rise of China's photovoltaic industry, but on the contrary, Europe's own green transformation process has been affected due to the lack of high-quality and affordable Chinese products, and new energy power generation has been struggling. As a result, the EU had to revoke these measures in 2018.
The US has taken a different approach to Chinese PV companies than the EU, which is "sanctions + additional taxes" to try to defeat Chinese competitors.
Image source: Xinhua News Agency
China's role in the global energy transition market can be seen in Brazil's renewable energy production. Brazil's renewable energy production, which mainly uses Chinese-made tools, has increased its solar capacity 13-fold between 2017 and 2022 and now ranks eighth in the global PV capacity rankings, followed by China, the United States and Japan. Brazil also excels in wind energy, being the world's sixth-largest producer of wind power. In 2024, Chinese company Goldwind will open its first factory in Bahia, Brazil.
It will be interesting to see how a developing country like China can replace an old industrial power and spark a revolution in the field of renewable energy. As Chinese companies make progress in the field of electric vehicles, large automakers in the United States and Europe are finding it increasingly difficult to cope with the new competition from China. This reminds us of the famous political economist Joseph Schumpeter's theory of "creative destruction" – that new ideas always surpass old ideas, and that this is a "historical normality".
According to Schumpeter, the economic system is not static. It develops through the productivity growth that innovation brings, whether it's creating new products, new energy sources, new production processes, new capital goods, or opening up new markets. This process of innovation and creativity destroys the old industrial system.
Take the photography industry, for example. Thirty years ago, the global market was divided between companies such as Kodak, Fujifilm, Agfa and Polaroid. The industry involves cameras, films, developing paper, chemicals, pan-sales, web development, and even album production to protect and display photographs. This huge chain was eventually destroyed by five innovations: increased computer capacity, the Internet, digital photography, smartphones, and social networks. As a result, thousands of businesses and jobs around the world have disappeared, but the number of photos has grown exponentially.
Image source: Visual China
The same process is now playing out in several other industry sectors and will be further accelerated with the development of AI. It is inevitable that China will achieve a unique position in today's industrial production because, in addition to its huge production capacity, China is constantly improving in terms of product quality and innovation. At present, China is pursuing high-quality development, shifting from "quantity priority" to "quality priority". From this point of view, attempts to contain China's progress in the world economic system are doomed to failure.
We might as well recall Schumpeter's idea that when the economic environment is competitive and challenging, there is a wave of innovation, because a system of competition and uncertainty requires the producer to act. The quest for profit and survival will lead entrepreneurs to seek more efficient equipment, innovative processes, new products, or machines instead of labor to increase productivity. Now, a new wave of technology, climate change, and global warming are prompting innovative practices. As a result, new products are being born related to the green economy and the digital revolution.
China's success has set a model for other developing countries such as Brazil. Without the development of productive forces and innovative capabilities, it will be impossible to provide a more solid life for the people. In this regard, the development of high-quality education and effective public policies are indispensable, and this is what China has always adhered to.
Image source: China Daily
Producer: China Daily, China Watch Think Tank
Editor-in-charge: Song Ping Xin Xin
Editor: Zhang Zhao
Intern Li Jingwei also contributed
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