What is at Stake in The APEC CEO Summit
The Asia-Pacific Economic Cooperation (APEC) CEO Summit set to take place November 12th-18th, in San Francisco is the most influential meeting of world leaders and business executives to convene, discuss vital issues, and collectively shape the trajectory of a region that holds immense importance for global prosperity, stability, and sustainability. The Summit program will highlight the potential of collaboration and fresh thinking to build the future through a focus on Sustainability, Inclusion, Resilience, and Innovation. This year’s Summit will also bring together 20+ leading CEO’s representing companies such as: Microsoft
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, Pfizer
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, Uber, Citibank, Fedex, Exxon Mobil Corp to name a few, many of which, have deep economic interests in the Asia Pacific region and China in particular.
China is installing about as many solar panels and wind turbines as the rest of the world combined, and is on track to meet its target for clean energy six years early according to Fitch Ratings. Renewable-power capacity additions in China reached 109 gigawatts (GW) in 1H23, equivalent to 71% of the total power capacity that was newly installed in 2022. To put things in perspective at the end of 2022, there was 110 GW of solar photovoltaic (PV) and over 144 GW of wind power total in America. Solar power in China contributed 78.42 (GW), as both large utilities-scale capacity and distributed solar capacity more than doubled.
However at the same time, China is also building new power plants that burn coal, the dirtiest of the fossil fuels, at a pace that dwarfs the rest of the world. In this regard, President Xi Jinping’s participation and address at the APEC CEO Summit bear significance, but also represents a conundrum in how best to reconcile China’s commitment to fostering a shared sustainable future, ensuring regional stability, and promoting global governance.
In his speech at the 2022 APEC CEO Summit, President Xi Jinping accentuated China’s commitment to promoting a shared future within the Asia-Pacific region. This commitment rests on peaceful development, openness, inclusiveness, and solidarity. President Xi laid out essential strategies to achieve these objectives, including prioritizing people-centered development, advancing higher-level opening-up, ensuring stable industrial and supply chains, and promoting economic upgrading. Such methods align with a vision of a harmonious, prosperous Asia-Pacific region, where the benefits of development are widely distributed and contribute to overall stability and growth.
Recalibrating US-Sino Relations
China, as the world’s largest developing country and a prominent member of APEC, has expressed a willingness to play a constructive role in ensuring the success of the APEC summit. This sentiment was strongly emphasized by Chinese Foreign Minister Wang Yi, highlighting China’s commitment to meeting international expectations and actively contributing to the prosperity and development of the region. The collaborative spirit demonstrated by China reinforces the importance of cooperation among nations within the Asia-Pacific, serving as a driving force for sustainable growth and shared benefits.
The prolonged absence of a meeting or dialogue between President Xi Jinping and U.S. President Joe Biden, spanning almost a year, has significantly contributed to escalated tensions between the two nations. However, the prospect of a potential meeting during the 2023 APEC summit offers hope for improved relations and a step toward stability, while also aiming to limit expectations. Such a dialogue holds immense importance in addressing bilateral disputes, fostering a better understanding of each other’s perspectives, and promoting a climate of cooperation and engagement rather than confrontation.
In November 2022, U.S. President Joe Biden and Chinese leader Xi Jinping held their first in-person meeting since Biden’s presidency on the sidelines of the G20 summit in Bali, Indonesia. Leaders convened to address urgent global concerns, including climate change, inflation, and repercussions from Russia’s actions in Ukraine. This meeting presented a rare chance for Biden and Xi to enhance communication and discuss critical “red lines” for both nations amidst escalating tensions. Similar conversations occurred during U.S. Secretary Blinken’s trip to China in June 2023 and Janet Yellen’s visit to Beijing in July 2023.
Why China’s Renewable Energy Sector Should be viewed as opportunity
In October, California Governor Gavin Newsom spent a week visiting Hong Kong, Beijing, Shanghai, Guangdong, and Jiangsu provinces and met with President Xi. Gavin visited the first Chinese city to deploy an all-electric bus fleet, tour an offshore wind facility and see Tesla’s
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Shanghai Gigafactory. The Governor also signed agreements with leaders of various Chinese provinces to set mutual commitments on a host of climate goals. These exchanges are important as the US can learn from China especially with respect to the Solar industry. China is estimated to have more than 80% of the worlds solar manufacturing capacity through 2026. It is an industry that multinationals and investors alike cannot afford to overlook.
The electronic vehicles (EV) industry and market in China is another sector that should be viewed as a great opportunity. However, much of the alarmist rhetoric in Washington, would prove otherwise. If China continues to succeed in developing the EV ecosystem then the world gets cleaner cars and non-Chinese automakers are required to compete to improve their own products and standards. Isn’t that good for consumers and innovation? But a more fundamental question is, does China’s current dominance in the EV market truly hurt the US economy? Deeper analysis shows that China has already been producing lower-priced, decent-quality cars such as BYD, NIO, and Li Auto which each posted record sales during the third quarter of 2023, while Tesla sales fell by 6.7%. This should be viewed as great for American and global consumers who, unlike Chinese citizens, aren’t bearing the costs of the subsidies holding up the industry. If anything, Americans should be upset that their access to these EVs is due to a 27.5% tariff on Chinese-made cars imposed by the Trump administration and maintained by President Joe Biden right? Not exactly. To be fair, The Chinese government is equally guilty of subsidies. Among 5,000 mainland Chinese listed companies, five of the top 10 recipients of government grants during the first half of 2023 were local manufacturers of EVs or the batteries that power them, according to data compiled by Chinese information provider Wind and a survey by Nikkei Asia. Contemporary Amperex Technology, or CATL, received 2.85 billion yuan ($391 million) in government subsidies for the six-month period, almost a threefold increase from 2022.
The main point here is that the US and China need to engage more, rather than less with leaders from both the private sector and government to explore collaboration as well as air grievances in the renewable energy sector. Like Governor Newsom’s visit to China, The APEC CEO Summit provides an opportune moment for China to further dialogue with Asia-Pacific and the U.S. on how best to raise “Green growth” standards particularly through public-private partnerships. It is clear that President Xi Jinping’s active participation and engagement at the APEC CEO Summit represent a pivotal moment in shaping the future of the Asia-Pacific region. China’s ability to promote a shared sustainable future, foster regional stability, and engaging in constructive dialogue can be amplified by working through public-private partnerships with the US and other APEC member countries. The APEC summit provides a critical platform for world leaders and business leaders to collectively create a brighter and more prosperous future for all stakeholders involved.
Special thanks to Lorena James for contributing research, editorial edits, pictures, and quantitative data for this article.
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