Learning from China’s economic philosophy and policy — III

Highlighting the immense strides made by China in green energy, former US treasury secretary, Hank Paulson, while talking to Bloomberg in a programme titled ‘What China understands about AI and energy that the US doesn’t’ pointed out with regard to China’s significant rise in green energy that ‘…[China] are investing big time in renewables and solar and wind. They have more renewables than Europe, the U.K., and the U.S. combined. They’re going to have half their energy from renewables.’

In the same programme, Nick Burns, who is former US ambassador to China, indicated about China’s tremendous progression towards green technologies, including electric vehicles, pointing out the following: ‘The degree to which China is building transmission lines all across the country. …It’s staggering the degree to which they’re now controlling the global supply chain in electric vehicles [EVs], in lithium batteries, in solar panels, and wind power. They are world leaders in this…’

READ MORE: Learning from China’s economic philosophy and policy — II

Moreover, the same Bloomberg programme host indicated that ‘Over the next five years, China plans to add more than 3.4 terawatts of energy generation capacity.’ The programme also interviewed Elizabeth Economy, who is ‘China policy expert and senior fellow at the Hoover Institution.’ She pointed out with regard to China’s huge leap towards adopting green energy, as follows: ‘They’ve been developing their electric grid at the rate that is extraordinary. …It has more power generation capacity in clean energy than it does in fossil fuel energy. …they have spent a lot of time over the past several years investing very heavily in renewables. You know, last year, a trillion dollars in renewable investments. And as a result, they’ve seen their exports of EVs skyrocket, 80 percent increase in 2025, 40 percent for battery exports, 20 percent for solar panels. …One five-year plan after another, renewables have been part of the Chinese plan.’

It, therefore, makes a lot of sense that Pakistan must tackle its climate change- and energy concerns in a significant way by partnering with China in shifting as quickly as possible towards green energy; with likely positive impacts of the green economy for not just environment and health outcomes but also in terms of economic growth, macroeconomic stability, including enhancing foreign exchange reserves by cutting on the cost of externalities and imports, along with enhancing production capacities of EVs and solar panels. It is long overdue that such expanded partnership should have been forged, which requires a mission-oriented role of policy, including putting in place purpose-driven industrial policy, including first fixing the underlying pricing mechanism, and seeing a more meaningful role of government – on the non-neoliberal, non-austerity economic philosophical underpinnings adopted by China – resulting in overall improving the economic environment in terms of economic institutional quality, underlying organizations, and markets.

READ MORE: Learning from China’s economic philosophy and policy – I

This is needed to overall become much more conducive for much-needed better facilitation of investment, relocation of Chinese factories where possible, and taking advantage of technical assistance, and overall partnerships with, for example, e-commerce giants like ‘Alibaba’ in a much more effective way.

In addition, AI requires a lot of energy, and apart from the fact that clean energy is needed anyways to rein in climate change crisis, fossil fuel-based energy systems take longer time to build and, in the long run, are highly costly and prone to shocks like the ongoing Middle East (ME) conflict, creating oil supply shock, which is a significant source of electricity, for instance, for Pakistan.

Hence, it makes a lot of sense for Pakistan to forge deep partnerships with China to fast-track its shift toward green energy. This is especially true given that Pakistan is a top-ten climate-vulnerable country, suffers from severe smog with PM2.5 levels far above safe health standards, and faces a huge fiscal and productivity drag from expensive electricity.

Highlighting the phenomenal progress made by China in terms of shifting to green energy and, in turn, propelled its energy production by significant proportion, which is reaping benefits to the overall economy, including immensely supporting AI energy needs, the same Bloomberg programme pointed out: ‘Though China’s push into renewables may not have been intended for AI, that’s where it could matter the most. …China increasingly dominates, accounting for roughly 80 percent of global technology production in solar, and battery tech[nology] and more than 70 percent in wind.’

Moreover, in the same Bloomberg programme, Elizabeth Economy furthermore indicated, ‘…China’s exports were worth 76 billion dollars last year…’ Moreover, she underlined the point about greater role played by government, as being done in China, unlike lesser role being played by the US, for instance, in addition to the role played by private sector.

Non-neoliberal and non-austerity economic philosophies are being rewarded through a rapid shift toward green energy. This once again highlights that countries in general, including Pakistan, should learn from China’s example in this regard rather than following the neoliberal/austerity economic model. So, in the same Bloomberg programme when Elizabeth Economy was asked ‘Can the government giving subsidies or tax breaks, incentives on renewables, is it possible the market will take over and say it’s just cheaper to get energy from some of the renewables?’ she replied: ‘Well, I think there’s always a hurdle, right, when you’re introducing a new technology that… it has to… get over. And that is where the government subsidies, or incentives, you know, can play an important role. I mean, we see that now with rare earths. …you’re going to have to invest. You’re going to have to have a secure market, you know, for the new investment, for the new technology that you’re developing. Right? Because you have to get it over the hurdle, from the innovation to the manufacturing to the… deployment, and export. And I think that’s the… full lifecycle of new technologies that China has created its playbook.’

Here, it needs to be stated that China employs the use of mirrors in open spaces, like deserts, to produce significant amount of energy. A June 3, ‘ABC News’ electronic media report ‘China’s investment in renewable energy pays off’ pointed out in this regard the following: ‘This is China’s north-western Gansu province. For centuries, a harsh, unforgiving sun scorched… Once a punishing burden, today those blinding rays fuel rows of solar panels stretching to the horizon. A shimmering sea of glass and steel that is fast becoming one of Beijing’s most powerful buffers against global energy shocks. China is really making the most of this arid landscape. These solar panels, they stretch out for miles. You can see why this is known as China’s green power bank. …This is China’s first major solar thermal plant just outside of the desert oasis town of Don Huang. So proud of their milestone, it is now open to tourists. …A gigantic thermal power plant rising out of the desert. These massive structures use mirrors to concentrate sunlight onto central towers, producing heat that can be stored and converted into electricity around the clock.’ It indeed makes a lot of sense, both in terms of economy’s green transition, and huge energy needs, including those for advancing in the field of AI, that Pakistan should also build these solar thermal plants, which can be housed in huge spaces of arid land and deserts that the country possesses.

For decades, rather than relying solely on new technologies, China has used a greater role for government and public investments to steer its economy This state direction has helped maintain price predictability, boost productivity, and improve competitiveness across all sectors—from agriculture and traditional industry to high-tech fields and cleaner energy—as the country has progressed economically.

Copyright Business Recorder, 2026