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Heating Chinese cities while enhancing air quality

David Benazeraf

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China’s district heat network – which supplies heat from central locations – is the world’s largest: in 2015, it consumed more energy than all of the United Kingdom. But district heating is also major source of air pollution in many Chinese cities. The beginning of the winter season usually coincides with a surge in air pollution, mostly due to coal-fired boilers used in commercial heat production.

Heat in China is considered a public commodity that should be available and affordable, especially in the northern half of China, which needs heating up to six months per year. On an annual basis, pollutant emissions from coal-fired district heating represent between 3% and 5% of total energy-related pollutants nationwide. But northern cities are much more affected, as pollution from heating is concentrated there.

District energy systems are currently mostly fuelled by coal. In 2016, 33% of total floor area was heated by coal-fired boilers for commercial heat production, and co-generation (mostly coal) accounted for 51%, the rest coming from gas and other sources.

As part of the fight against air pollution, and more generally the goal of developing a less energy- and carbon-intensive economy, the Chinese government is strongly encouraging provinces and municipalities to clean up air quality through various measures. During the 19th National Congress of the Communist Party of China in October this year, President Xi pledged to build a “beautiful China” with a clean environment. Important impacts are expected with actions taken at the local level, including recent plans announced by the National Development and Reform Commission (NDRC) and other government departments aiming at cutting coal consumption for heating by 150 million tonnes in five years (2017-2022).

With the phase-out of coal-fired boilers progressing, China’s central heating fuel mix is already changing rapidly. China has ample resources to diversify the heating mix with cleaner coal use and alternative fuels, including excess heat from industry and better use of combined heat and power (CHP) capacity. Gas for heating is developing rapidly and reached 15% of surface covered by district heating in 2016 (including 3% for gas co-generation). For example, urban areas in Beijing are now entirely fuelled by four large gas co-generation plants. But around 80% of the natural gas consumed for district heating was concentrated in six provinces. More responsive supply and storage capacity are needed to cope with this significant increase in gas use for heating.

Renewables such as geothermal and biomass also have room to develop further: currently, renewable sources only contribute to about 1% of district heating, compared to 28% in the European Union. Establishing fuel supply chains for agricultural residues could contribute to scaling up biomass for district energy, especially in areas with local or nearby resources and limited supplies of coal or natural gas.

Urbanisation and greater demand for thermal comfort will continue to increase the need for heating in China. Integration between heat planning and urban planning is essential, as well as optimising the efficiency of existing systems through improved resource management and heat mapping. For instance, overheating and network losses represent around 20% of total heat production. Floor area in China is projected to increase another 40% by 2050, reaching more than 80 billion square meters, from 57 billion m² today.

The Chinese government laid out the main orientations for China’s urban development in 2013, including a plan to rebalance urban growth by limiting urban sprawl and increasing densification of cities. The building sector offers large room for greater efficiency, both for new construction and also from renovation of existing construction.

District energy systems are very dependent on local circumstances and resources. Locally based and tailored solutions associated with adequate market conditions can contribute to further decarbonise, optimise and diversify district energy systems in the Chinese context.

Source: IEA

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East Asia

Predicting the course of US-China relations in the post Covid-19 era

Ayush Banerjee

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Authors: Ayush Banerjee and Dhritiman Banerjee*

The coronavirus pandemic is a natural threat to the geopolitical order. And it is needless to state that this majorly affects the currently international paradigm in a manner that the world has not seen before. Although there have been a few instances where pandemics have shaken the mortality rates, no pandemic has spread this amount of sheer panic among the public at large. This is largely due to the growing interconnectedness and the advent of the cyberspace. Just as the internet has influenced the lives of the most privileged public, data has been influential in academics and politics alike. However, this argument has its own set of problems that continue to affect public-politic relations in ways more than one.

In the same regard, one of the most strained and keenly debated relations in international politics is that between the United States of America and the People’s Republic of China. In the context of the virus itself, the virus originated in Wuhan, a province in China while the most number of fatalities have resulted in the United States of America. This idea fuelled with the new world media at the public level created an atmosphere of tension on such platforms. On Twitter notably, there were several instances of a tweet naming Covid-19 as ‘Chinese Virus’ spread like wildfire. This sparked a major controversy even at the diplomatic level. Even Donald Trump momentarily subscribed to the idea and deliberately worded his speech to use the phrase ‘Chinese/China virus’ to refer to Covid-19 at least 20 times between March 16th and March 30th 2020. The US Secretary of State- Mike Pompeo went on to accuse China of its lack of transparency, even scrapping a joint G7 statement after its members refused to refer to the virus as the ‘Wuhan virus.’ China has remained apologetic ever since. Hence, it can be rightly inferred that the relationship shared between China and USA have strained ever since the Covid-19 outbreak.

However to predict how the outbreak might jeopardise the current paradigm of world politics we must look no further than the Phase One Trade deal signed between the two countries. This deal previously ended an 18-month long trade war between USA and China. Through this deal, China committed to purchasing $200 billion additional foreign goods and services in the sectors of agriculture, energy and manufacturing. However, it is evident that in the post-Covid19 era, it will be rather implausible for China to adhere to the terms of the deal due to reasons more than one. The IMF estimated the reality of an unprecedented economic slowdown in which China is expected to grow at only 1.2% this year. Several reports suggest that investors are planning to pull out their investments from Chinese industries to fit in with the Western bandwagon.

The outbreak turned pandemic coupled with the authoritarian nature of China’s response to the entire situation has had a detrimental effect on their domestic economy creating various tremors in the anticipation of demand for various products and services. For instance, the 12 most Covid-19 affected countries account for over 40% of the Chinese exports. Nations like India and Italy that also make that list of twelve may voluntarily pull out of importing to China as they are set to gain from deferring of investments. These nations are also top suppliers of intermediate goods for the Chinese economy. The Chinese economy is quite dependent on external demand stimuli from the US and most western European states such as the United Kingdom. Therefore, until the point in time the US and EU economies completely recover from this pandemic, Chinese policymakers are bound to hold back domestic stimulus efforts as it will only have little effect if the global economy is in shambles.

The Chinese economy has crippled down considerably due to the ongoing trade war that has led to a disproportionate ratio of debt to the annual Gross Domestic Product. This ratio reached an overwhelming 248.8% by the end of March 2019 and it has only increased ever since. China has also been forced to restructure the debts of the Belt and Road initiative (erstwhile OBOR). This restructuring meant that the capital owed to China as loans by the contributing states have been readjusted to affect the projected collection considerably. As Covid-19 nearly decimates the economy of most developing nations, it is becoming increasingly difficult for these states to pay their loan back to China within the stipulated timeframes. Thus adding to the stress on the Chinese economy at large.

There has already begun a region-specific boycott of Chinese goods and industries, especially in conservative parts of USA, among the southern districts. Instances of racial abuse against ethnic Chinese communities have been on an unfortunate rise. These are all deterministic factors of public consciousness, if not, public opinion for the future that lies ahead of us. This reaction has already seen international spillovers and investors have become more anxious about investing in Chinese companies.

According to Deepanshu Mohan, the world may experience radical shifts in the global political economy post-Covid19 based on two factors namely, the relative degree of economic recovery in the affected nations and the existing domestic political scenarios in such nations. He further states that in the post-Covid19 era, protectionist trade policies are likely to increase in the developed nations who in the name of ‘supply security’ may disentangle trade relations with China which will inversely affect the current geopolitical world order. Donald Trump could also make the pandemic a focal point in the 2020 election campaign and therefore aim to capitalise on the anti-China fervour in the US and thus strain relations even further. There lies evidence for this as well. Trump recently presented his anguish towards China being categorised as a ‘developing’ state under the World Trade Organisation list and due to the low contributions of China to the World Health Organisation. Although this may seemingly appear appropriate accusations, this is far from the whole truth. The USA, themselves have cut major proportions of its funding capacity towards the United Nations especially concerning peacekeeping and security operations.

Minxin Pei, on the other hand, stated that the Covid-19 outbreak has led the average American to view the Chinese political system with chronic scepticism as Americans blamed the repressive Chinese political system for the pandemic with the Harris poll indicating widespread American dissatisfaction with the alleged Chinese cover-up of the virus. This poll also showed overwhelming support for US punitive measures on China and the removal of US investments and businesses from China. These developments could lock the two countries into a cycle of escalation that could trigger another potential international diplomatic conflict leading to numerous security issues and economic degradation. USA and China remain the two largest economies in the world. Hence, it can be inferred that this fallout of diplomatic and economic ties between the two states might amount to significant damage in the entire global political order and the globalised system of economies and markets. In the US itself, the number of jobs created since the recession in 2008 has been washed away in two weeks.

The trade war between the two economic giants had already shaken the world before the outbreak. And the prevalent fault lines will only widen in the post-Covid19 era just as a global economic slowdown is expected. Thus, it is imperative for the world economy that this US-China relation remains amicable and stable. However, the available narratives indicate a significant detour from the ideal stability that USA and China should normatively maintain to protect the global economy from crumbling down like biscuits. The USA has resorted to legislations that are actively anti-China in terms of financial relations and international trade while China has strengthened its protectionist response system both politically and economically during this outbreak.

The Covid-19 outbreak has not acted as an impediment to Chinese aggression in the South China Sea region either. China has recently renamed 44 features in the disputed region, a decision that is considered illegal under international law. This has been time and again criticised by the US Secretary of State Mike Pompeo. With increasing US-China missile competition a reality in the region post the abrogation of the INF treaty, the post-Covid19 era will likely see more prominent conflicts in the South and the East China Sea regions which is a strategically important waterway for both the countries alongside other nations such as Japan, Vietnam, Philippines and India.

*Dhritiman Banerjee is an undergraduate student at the Department of International Relations at Jadavpur University, Kolkata, India. He has recently published for the Millenniumpost, a Kolkata based newspaper as well as contributed to publications like the Geopolitics and South Asia Monitor. His interests lie in International Relations in general and Strategic Studies in particular.

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East Asia

Political unrest in Hong Kong and Global Pandemic

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Things started from a murder of a girl in Taiwan ending up into an unseen scenario in Hong Kong. Rising tensions in the region of China and Hong Kong, situation is getting worse. First of all the episode of extradition bill and now becoming the series of different surprises, the advent of National Security Bill is not acceptable among the Hong Kong citizens. According to the 1984 Sino-British Joint Declaration, Hong Kong is ought to be the autonomous and free liberal region along china being constituted as a “one country, two systems.” As per this treaty, China is violating International law: which is a direct threat to its soft policy and international image.

 Secondly, the role of United States in Hong Kong is mainly concerned about the large number of U.S. Nationals working there especially at naval ports and their security. While on the national level the sustainability of democratic values and freedom in Hong Kong to whom these acts of China’s Communist party are challenging. United States being the global hegemon owns the responsibility to protect and keep the check on practice of international laws and its violation in any region of the world. Although the whole global community is concerned about the present situation of Hong Kong and its upcoming outcomes. States sign treaties and agreements on the basis of one’s predetermined political and social culture and works accordingly, so following the current scenario the Protest in Hong Kong is going to be game changing event. If the bill passed, Hong Kong will be a Chinese administered territory like another small city of Chinese Communist party but on the other hand if failed to pass this bill Hong Kong can have a victory to win the democracy and write the fate of their state in a new way.

Furthermore, the wave of global pandemic in the form of COVID 19 has already questioned the worth of human security. Millions of people are dying due to this disease originated from Wuhan, China. World is already questioning the Chinese role. Above all the differences, we all are human beings living in the world of chaos. Divisions led towards the more divisions. There is a dire need to fight collectively to this coronavirus. Being humans, we need to apply the only global value that is being human fellow. Social distancing is the new normal now but Hong Kong’s political situation is getting more anti distance campaign due to the political unrest. China needs to slow down the process. Human security needs to be the priority. Although to raise the voice of Hong Kong’s people social media can be a better platform. Let’s shake hands for peace rather than division.

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East Asia

All eyes on China’s post-lockdown Twin Sessions

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Even though parts of the country are still battling a minor rebound of Covid-19 cases, the general message is clear: China has emerged from the abysmal months of lockdown and is ready to resume business. This was made clear to the entire nation on 29 April with the announcement of new dates for the “Twin Sessions” meeting, the country’s most significant annual political and legislative affair, involving the National People’s Congress (NPC) and Chinese People’s Political Consultative Conference (CPPCC).

Starting from 21 May, thousands of legislators and political advisors will gather in Beijing’s Hall of the People to discuss and vote on pressing issues facing the country. The gathering, which should have happened in early March, was postponed for more than two months this year due to Covid-19. Now its restart, reportedly cut short from a two-week event to just one week, is widely considered a reflection of the top leadership’s confidence that a level of normalcy can be restored in Chinese society.

Despite the reassuring symbolic meaning of the Twin Sessions, the social and economic landscape is bleak as China begins its slow recovery from Covid-19. The country’s economy shrank 6.8% in the first quarter of 2020, and a full recovery is far from a certainty given the ongoing nature of the global pandemic. The unemployment rate has risen in the same period. The world will be watching how the Chinese government addresses these challenges through the outcomes of the annual conference. Measures will not just shape the trajectory of the Chinese economy but also global objectives of economic recovery, fighting climate change and achieving long-term sustainability. Here are a few key items to watch for at the Twin Sessions.

Economic growth target

At every year’s Twin Sessions, the Chinese premier will make a formal report to legislators about the government’s work in the past year and, more importantly, lay out key economic and social development targets for the coming year. These targets include rates of GDP growth, unemployment, Consumer Price Index (CPI) change reflecting inflation, and poverty reduction. By the end of the meeting, legislators will vote to adopt those targets to make them binding for the executive branch. That is the order of business in a normal year.

In a year of pandemic, the severe disruption to economic and political processes have made setting the 2020 targets a contentious business. Now all eyes are on Premier Li Keqiang’s Report on the Work of the Government as the country enters the last week of May without a clear idea how the central government plans to set the speed for the economic engine this year.

This is a year of paramount importance for the Party. By the end of 2020, the country’s GDP is supposed to achieve a doubling from 2010 levels, a key political commitment made by the Party to Chinese society. The growth rate needs to hit about 5.5% this year to secure the objective. But Covid-19 has knocked the economy off track by a wide margin.

Prominent Chinese economists have weighed in. Justin Lin, a top economic advisor and former Chief Economist at the World Bank, recommended a moderate target of 3% to avoid maxing out China’s monetary and fiscal policy tools. As the economy shrank in the first quarter and is only mildly recovering in the second, China needs to achieve a 15% growth rate in the second half of 2020 to maintain the 2020 “doubling” goal. Lin argues that even if China is able to stimulate economic expansion to that level, it should opt for a slightly lower target to save some ammunition for next year. “It is totally acceptable to defer the (doubling) goal to next year,” he told the audience of a Peking University webinar on 15 May.

On the other hand, Ma Jun, chairman of China Green Finance Committee and a member of the People’s Bank of China’s monetary policy committee, has advocated for an outright abandonment of any economic growth target for 2020, citing concerns that chasing unrealistic targets will lead to massive stimulus measures in debt-driven infrastructure building that is often short-sighted and ill-considered.

A 13 May article by He Lifeng, the head of the National Development and Reform Commission (NDRC), China’s top economic policymaking body, indicates that the government may still choose to adhere to its original economic goal. “We should make sure we complete the task of building a moderately prosperous society,” he wrote. Doubling GDP by 2020 is a key component of that vision.

Stimulus package

The growth rate target is closely linked with how China determines the size of its economic stimulus package. According to the 2015 Budget Law, key components of the fiscal toolbox, including quotas for central government and local government bond issuance, must be approved by the National People’s Congress.

Liu Yuanchun, vice president of Renmin University, told Caijing magazine that to create 1% GDP growth, fiscal spending should reach 1.2-1.4 trillion yuan (US$170-200 billion).

By the end of April, the Ministry of Finance had front-loaded the local government bond issuance quota to the tune of 2.29 trillion yuan (US$320 billion), and before total annual quotas could be approved at the Twin Sessions. The majority of local government special bonds go into infrastructure projects such as railway construction and public transportation, whose carbon footprints will have implications for global efforts to address climate change.

Green legislation and planning

Covid-19 has triggered a national conversation about the relationship between humans and nature, as scientists have linked the novel coronavirus to human contact with wild animals. The conversation was quickly followed by legislative actions. On 24 February, the NPC Standing Committee passed a decision banning consumption of wild animals for food, leaving only limited exemptions for certain species commonly bred in captivity. The national legislature is expected to revamp the Wildlife Protection Law following the decision. According to a legislative plan released by the NPC Standing Committee, the law revision process will likely culminate in 2021. Therefore, this year’s Twin Sessions probably won’t see definitive progress on the Wildlife Protection law, even though legislators may use the platform to submit proposals and recommendations.

Meanwhile, deliberations on the 14th Five Year Plan (2021-2025) will start in earnest this year, ready for its delivery to the next Twin Sessions in 2021 for final approval. According to schedules released by national authorities, draft versions of sectoral 14th Five Year Plans (such as for renewable energy) should be available for comment in late 2020.  

In a critical year for China’s political and economic calendar, the pandemic has created unprecedented disruption. The coming week will demonstrate how China plans to pull itself back on track, with outcomes that will have far-reaching global consequences.

From our partner chinadialogue

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