Liang Jing: “China’s opportunity”

Guest post: Liang Jing argues that the Copenhagen conference now offers a rare historical opportunity for China to enhance its international standing and improve its long-term economic prospects. English translation by David Kelly.

Global climate change, humanity’s predicament and China’s opportunity

By Liang Jing

The global climate conference now underway in Copenhagen may become a major historical event impacting the destiny of in the 21st century.
Humanity has never previously taken collective action on such a scale to address a common crisis, and China is even more for the first time standing at the centre of the world stage playing a pivotal role as a great power. No wonder the 21st Century World Economic Herald of 14 December headlined the conference as China’s “‘coming of age’ as a great power.”

As the reporter said, in this “‘coming of age’ as a great powe
r,” China, fully aware of its importance, is no longer avoiding the limelight, and not only is no longer avoiding direct ‘confrontation’ with the US and other western countries, but is also actively expressing its own voice.” China has chosen such a gesture, not only out of deep pockets and domestic political considerations, but also because it sees the moral and domestic political those countries are in.

American and western leaders believe argue that if effective measures to significantly reduce greenhouse gas emissions are not taken immediately, it will be difficult for humanity to avoid unprecedented climatic disasters. They are however unable to convince their own people to make sacrifices and contributions satisfactory to other countries in order to avoid this disaster, but hope to persuade developing countries to make more concessions. The democratic political system itself is, ironically, a major factor making it difficult for their political leaders to do more, whereas China’s authoritarian rulers currently enjoy huge advantages
denied to the democracies. The political space China’s leaders have in terms both of emission reduction targets and funding contribution are the envy of western leaders.

The Economic Observer published interviews with EU chief climate negotiator Artur Runge-Metzger and Chinese negotiator Lu Du in a report of 14 December, intriguingly titled “Bicker, bicker, bicker, what’s getting in between us?” To Chinese, it subtly ridiculed China’s argument that the west is mean and “parsimonious.” In the EU’s view, raising the level of financial assistance from current US$5 billion to $10 billion to the future level of $500 million to $1 billion is already a huge effort, but this level is only equivalent to one-third to half of China’s average purchase of US bonds in peak months. The real problem is compared to the huge losses the EU believes that climate change might bring, the level of EU assistance is really too low.

So, has China fulfilled its due responsibility? Why is the west adopting an attitude of qualified welcome to China’s commitment? This is because China has not made a clear commitment to the total amount of emissions, leaving behind a considerable number of variables. First of all, China promised to reduce carbon emissions per unit of GDP by 40% to 45%, therefore, the total reduction in carbon emissions will depend on its future economic growth, and therefore, according to Runge-Metzger, if it continues rapid growth, the goal of keeping global temperature rise within two degrees cannot be guaranteed. Runge-Metzger did not dare express another, larger uncertainty, which is whether future Chinese leaders can deliver on the commitment of the current leadership. In general, reducing carbon emissions per unit GDP is harder the later it is done, while a common problem of China’s post-1989 political leaders is to give themselves the glory of good things, while passing on problems to their successors and future generations.

The controversies at the Copenhagen conference show that faced with a serious risk of global climate change, humanity seems to lack the political wisdom to take effective collective action. The developed and developing countries are likely to differ by only a few billions of dollars in their investment burdens, while greatly increasing the risk of encountering losses tens of thousands times greater in a few decades. In terms of humanity’s overall interests, this is clearly not rational, but in terms of the individual interests of each country and politicians, it is rational and difficult to choose differently.

In my view, this human predicament offers China a rare historical opportunity, namely of committing to provide financial support to address global climate change, which will not only enhance China’s international status, but also given in return for some kind of international arrangement to preserve China’s foreign exchange reserves. These huge foreign exchange reserves has become a heavy burden and face considerable risk of devaluation of the dollar. If China were to support developing countries respond to climate change impacts in return for international support hedging against inflation for part of its foreign exchange reserves, there should be considerable room for negotiation.

George Soros reportedly put forward a proposal on 10 December for developed countries to provide US$100 billion in the form of special drawing rights, as a
special green fund” for developing countries to develop low-carbon energy and deal with climate change and natural disasters.

In financial terms, China is fully capable of being the largest investor in this “special green fund”, and could thereby gain the right to negotiate to preserve its value.

Were Mao alive, I don’t think he would hesitate to seize this opportunity “to make greater contributions to humanity,” but will Hu Jintao?