Can Europe, China forge a climate connection?

Earlier this year, the Chinese firm CATL, the world’s largest battery-maker, unveiled an electric-vehicle (EV) battery capable of delivering a remarkable 520 kilometres (323 miles) of driving range after just five minutes of charging.

- EMMANUEL GUERIN BERNICE LEE

The announcement came a month after BYD, China's leading EV manufacturer, launched its own ultra-fast charging system. In solar, too, the numbers are staggering: Chinese firms can now produce over 1,200 gigawatts of solar panels annually.

These feats are a product of the global green-tech race, which China leads by a wide margin. Some frame this as a problem of Chinese oversupply. But another way of looking at it is that the rest of the world isn’t deploying these technologies fast enough. While China's green-manufacturing engine is running at high speed, others are idling.

Given this, Europe confronts a strategic choice. It can respond with defensive industrial policy: securing supply chains, raising tariffs, and futilely attempting to catch up. Or it could forge a shared competitiveness agenda, which would allow Europe to use its strengths — rulemaking, coalition-building, and norm-setting — to shape the deployment environment, define standards, and guide green investment frameworks.

Despite the breakdown in ties between the European Union and China in recent years, the idea of collaborating on clean trade and investment is not so far-fetched. The climate transition is the defining political and economic challenge of the twenty-first century. And on this front, the EU and China have become interdependent: if Europe pumps the breaks on decarbonisation, Chinese assets could be stranded, whereas China could face retaliation if it refuses to collaborate or align with global norms. The question now is whether they can constructively shape their interdependence.