China's 14th Five-year plan: priority on secure, clean energy

In 2021, the 14th Five-Year Plan was ratified during the annual 'Two Sessions' (两会) — a political congress of two weeks during which the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC) meet to assess the policies of the past year and determine those of the coming year. High-priority themes included digital currency, economic reform, energy, and natural resources. These last two issues are particularly significant in the context of the race against climate change and increasingly intense competition over the planet's natural resources.

Ambitious Goals on Renewable Energy

The People's Republic of China — with its 1.4 billion-strong population and one of the fastest-growing economies of the last two decades — has become both the largest producer and the largest consumer of energy on the planet. This has created a paradoxical situation: China is simultaneously the world's largest user of coal (it has consumed more coal than the rest of the world combined since 2011), and the world's largest investor in sustainable energy, accounting for 23% of global renewable energy investment.

The energy transition is significantly more viable now than a decade ago — the price of producing one kilowatt-hour of solar energy has dropped by 89%, and wind energy by 70%, according to Our World in Data. In the 14th Five-Year Plan, the Chinese government aims to continue this transition by "cutting energy intensity by 13.5% and emissions intensity by 18% before 2025." In other words, China's GDP must grow faster than its carbon emissions and energy consumption. Some have applauded China's continued commitment to combating climate change, while others argue these stipulations are too vague to make a meaningful difference.

Renewables as a Path to Energy Independence

China's drive toward sustainable energy is not only environmentally motivated — it also stems from a desire to reduce dependence on energy imports. In 2019, China still relied on coal for 55.7% of its energy production, with 73% of that coal imported from abroad. This ambition for self-reliance is a recurring theme in the 14th Five-Year Plan: China seeks to boost domestic consumption to reduce reliance on exports and foreign product demand. The plan also aims to achieve "self-reliance in advanced technologies," targeting a major boost in domestic production of semiconductors and computer chips.

Increasing Focus on the Arctic

The Five-Year Plan did not only address the energy transition — it also mentioned the expansion of the so-called Polar Silk Road. This is a proposed shipping route China seeks to add to its already extensive Belt and Road Initiative, running through the Northern Sea Route which, due to climate change, is expected to be completely ice-free in summer months. A further motivation is the Arctic's enormous untapped potential in natural resources.

Chinese interest in the Arctic is not new. As early as 2018, China branded itself a "near-Arctic Nation" and announced plans to integrate a northern shipping route into the Belt and Road Initiative. According to the Clingendael Institute, China is also eager to help develop the Russian Arctic, which would benefit the Chinese economy through equipment production while providing better access to Russian natural gas and oil.

The Arctic holds enormous estimated quantities of oil and gas. As climate change gradually melts the ice sheets, more countries are eyeing the region for economic development. Other nations, such as Sweden, have protested extensive Arctic economic development and instead prioritise its preservation.

The Future of Climate and Energy

In the fight against climate change, China's industrial development, its consumer markets, and its significant capacity for developing and manufacturing clean energy technology will all shape the global energy transition. Understanding these developments requires a careful and continuous eye on China's economy, science, and industry.