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A few weeks ago a colleague and I travelled to Changsha, the capital of central China’s Hunan province to take a glimpse at the future of trucking and logistics.
Inside a new $3bn industrial park on the city’s outskirts Sany group, which is already China’s biggest producer of construction equipment, a highly automated factory is churning out tens of thousands of battery-powered trucks as well as solar-powered battery charging and swapping stations.
“We can see the trend of the future will be focused on decarbonisation,” Liang Linhe, who leads Sany’s electric trucking division, told us in his office adjacent to the factory.
Sany is among a clutch of Chinese groups overhauling the trucking industry at home and maybe elsewhere soon. Electric trucks in China are expected to outsell diesel trucks in the next three years and local companies are already investing in sales networks and manufacturing around the world.
It was clear from our visit and subsequent interviews with analysts that diesel trucks in China are heading down the same path that cars with internal combustion engines have gone down over the past few years. China’s state subsidies, a structural drop in battery prices and technological improvements in range and power output are set to lead to a rapid displacement of diesel trucks in the country.
Similar shifts are being seen across a panoply of sectors such as solar panels, wind turbines and batteries achieved via China’s market scale, innovation and state support.
In turn, this is offering hope to many countries to reduce — perhaps one day eradicate — a reliance on oil, petroleum and diesel imports while giving China opportunities to deepen its geopolitical influence.
While US President Donald Trump calls climate change a con, China is offering new technology and products to countries to develop green energy and to prepare for increasingly frequent and intense storms, floods and droughts.
Two days after our Changsha trip I attended a meeting in Beijing of Chinese officials and representatives of climate-vulnerable nations, a group that includes 74 nations with more than 1.8bn people.
Liz Thompson, a former UN assistant secretary-general and now climate change ambassador for Barbados, said just as climate-vulnerable states are hit by more disasters, they are hampered in their response because of a lack of access to technology and financing. “These challenges provide compelling reasons to work more closely with China,” she said.
Chinese officials and business leaders are keen to oblige. Zhang Shiguo, executive director of China New Energy International Alliance, an organisation backed by government associations and renewable companies, said the country’s green products had already reached 170 countries. “The reason China’s new energy sector has done well is the determination to act,” Zhang added.
There have been warnings of dangerous macroeconomic outcomes for Beijing stemming from extensive subsidies and industrial overcapacity. And some countries worry their domestic manufacturing industries will not withstand Chinese competition.
However, large swaths of the developing world appear more focused on the immediate upside of partnering with China. Solar exports to Africa, just one narrow example, surged 60 per cent in the year to June, according to data from Ember, a UK think-tank.
China is also leveraging its experience in rapidly deploying renewable energy including working in extreme heat and cold, high and low wind speeds. For example, Bao Xiaoqian, an executive with Shanghai-headquartered Envision points to a large-scale wind project in Bangladesh, developed with his company despite months of both chronic low-wind-speed conditions and typhoons.
And Wang Rui, a senior official within the China Meteorological Administration, noted at the meeting with climate-vulnerable countries that China was “very willing” to provide early warning technology to developing nations. He said a 24-hour advance warning for an impending disaster could reduce the resulting damage by 30 per cent.
But will it only be climate-vulnerable or developing countries which deepen their partnerships with China? The US might seek to focus on domestic alternatives to Chinese products. For the rest of the world, partnering with the one country that controls the world’s clean-energy supply chains is hardly a choice.
