A global green industrialisation initiative can have a ‘win-win-win’ outcome: Henry Huiyao Wang & Wang Zhi
Opinion: China’s green manufacturing capacity could be aligned with the West’s technological and capital strengths and the Global South’s development needs
Below is the latest opinion column of Henry Huiyao Wang in the South China Morning Post.
A global green industrialisation initiative can have a ‘win-win-win’ outcome
China’s green manufacturing capacity could be aligned with the West’s technological and capital strengths and the Global South’s development needs
The world stands at a crossroads, amid an accelerating climate crisis, geopolitical tensions reshaping global trade and the demand from Global South nations to exercise their right to industrialise without repeating the polluting mistakes of the past.
A new consensus is urgently needed that moves beyond zero-sum competition and towards collaborative solutions. The path to decarbonisation creates a trilemma of competing interests that threatens progress for all.
First, Western anxieties must be addressed. Some Western governments still believe in the green transition. However, others fear job losses in traditional industries and a decline in international competitiveness. Western countries need a transition that can secure their industrial base and retain jobs that many depend on.
Second is the Global South’s dilemma. These nations have a right to develop. However, many are trapped between a path reliant on fossil fuels that leads to climate vulnerability and a green path that often seems financially and technologically out of reach. They face prohibitive borrowing costs and lack access to financing.
Finally, there is China, which has gone through its painful “pollute first, clean up later” phase. Fortunately, Beijing now produces over 80 per cent of the world’s solar panels and around 60 per cent of wind power turbines. Its progress has reduced the costs of solar and wind power, making renewables more affordable worldwide. China can now help Global South nations build clean, modern industrial systems.
We propose a “Global Green Industrialisation Initiative” to align China’s unparalleled green manufacturing capacity with the technological and capital strengths of the West and the vast development needs of the Global South.
The core of this plan is already in motion. According to the think tank Ember, African markets imported 15,032 megawatts of solar panels from China in the 12 months up to June, a 60 per cent year-on-year increase. Once installed, these imports could add over 5 per cent to total power output in 16 nations. Sierra Leone could generate 61 per cent of its power output in 2023. In Nigeria, the savings from avoiding diesel could recoup the cost of the solar panels in six months. To scale this up, policymakers should consider a multipronged approach.
A Chinese “market-for-technology” deal with the West would be preferable to a zero-sum trade war over green tech. Imagine a strategic bargain where Chinese firms invest in manufacturing plants in the United States and Europe, creating jobs and strengthening supply chains.
In this model, Western partners gain access to advanced, cost-competitive Chinese green technology through joint ventures, accelerating their decarbonisation goals while sharing risks and benefits. This is a pragmatic alternative to protectionism, offering a pathway to securing supply chains and meeting climate targets.
Simultaneously, we must unlock capital for the Global South by treating countries as partners instead of aid recipients. We can break the innovation bottleneck through a three-pillar model.
The first pillar involves capital flow. Chinese banks can provide renminbi loans to domestic creditworthy green enterprises, including joint ventures, which then make direct investments in Global South projects. Data suggests that the credit risk of large Chinese green enterprises is quite low. Moreover, renminbi loans are cheaper than borrowing in US dollars and also help Global South countries avoid sovereign default risks.
Secondly, there’s localisation. Chinese banks can establish branches in Global South countries, absorbing local deposits to serve both Chinese and local businesses, fostering deeper financial integration and building local financial capacity.
The third pillar, multilateralism, incorporates green finance incentives into trade agreements to mobilise funds from the Asian Infrastructure Investment Bank, New Development Bank and Green Climate Fund that can supply the long-term capital required by large-scale infrastructure.
The goal is to help the Global South cultivate green industries by building ecosystems, not just exporting products. This requires moving to a model that transfers knowledge and builds capacity.
Joint ventures could serve as pioneers. Research from Tsinghua University’s Institute of Global Development shows that there were 95 electric vehicle joint ventures in China from Europe, Japan, the US and South Korea at the end of 2023, contributing 43 per cent of China’s EV production capacity. However, joint ventures face fierce competition in the Chinese market, resulting in overcapacity.
Japanese joint venture capacity utilisation is estimated to be only around 45 per cent, and Korean joint ventures below 20 per cent. This creates an incentive for them to leverage their unique position – with one foot in China’s supply chain and another in global brand networks – to explore other overseas markets, a “win-win-win” situation for everyone involved.
Industrial estates should be established in countries where joint ventures and large firms can form the backbone of a resilient industrial ecosystem, attracting a cluster of smaller businesses too.
Global standards can be set, while solutions are tailored for individual nations. This approach would integrate proven Chinese experience into the global standards system, ensuring interoperability. However, this is not a Chinese-led order, but a collaborative one. It will create a truly mutually beneficial paradigm for South-South and North-South cooperation.
For the West, it means building resilient supply chains and meeting climate goals. For the Global South, it offers a viable pathway out of the fossil fuel trap towards energy self-sufficiency, industrial development and job creation. For China, it represents the next phase of opening-up, transforming its successful domestic green transition into a platform for inclusive global cooperation.
The Global Green Industrialisation Initiative offers an economically sound and politically viable way forward.
Wang Huiyao is the founder of the Centre for China and Globalisation, a Beijing-based non-governmental think tank.
Zhi Wang is a research professor and distinguished senior fellow at the Schar School of Policy and Government, George Mason University, and a visiting professor at Tsinghua University.
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