{"id":119456,"date":"2024-03-05T11:20:56","date_gmt":"2024-03-05T11:20:56","guid":{"rendered":"https:\/\/chinadialogue.net\/?p=119456"},"modified":"2024-04-11T11:55:05","modified_gmt":"2024-04-11T11:55:05","slug":"two-sessions-evs-dominate-chinese-provincial-plans","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/two-sessions-evs-dominate-chinese-provincial-plans\/","title":{"rendered":"Two Sessions: EVs dominate Chinese provincial plans"},"content":{"rendered":"\n

Editor\u2019s note: The research and writing of this article took place before the central government released its work report<\/a> on 5 March.<\/em><\/p>\n\n\n\n

\u201cNew energy vehicles\u201d (NEVs) is the big buzz phrase for China\u2019s provincial leaders and political advisers as they plan their work for 2024 in the energy sector, China Dialogue found ahead of the country\u2019s top annual political and legislative meetings.<\/p>\n\n\n\n

The Two Sessions are the annual plenary sessions of China\u2019s top legislature \u2013 the National People\u2019s Congress \u2013 and political advisory body \u2013 the Chinese People\u2019s Political Consultative Conference (CPPCC).<\/p>\n\n\n\n

Our analysis of work reports and political proposals released in January at the provincial versions of the Two Sessions showed that four-fifths of provincial-level jurisdictions intend to spur their NEV industry this year. Scholars, entrepreneurs and public servants alike are also keen to share their views on how to accelerate local NEV sectors.<\/p>\n\n\n\n

Attention on solar and wind power has dipped compared to recent years, but enthusiasm for hydrogen energy remains high.<\/p>\n\n\n\n

On the ecological front, biodiversity, waterway protection and national parks are some of the keywords in a year when China is still chairing the UN Biodiversity Conference COP15.<\/p>\n\n\n\n

As a prelude to the national Two Sessions, which started on 4 March<\/a> in Beijing, the provincial two sessions normally focus on key instructions given by the central government in the preceding year. The plans, proposals and opinions emerging from those local-level meetings can indicate the main talking points of the national events.<\/p>\n\n\n\n

NEVs in the fast lane<\/h2>\n\n\n\n

Twenty-six of the 31 provinces in mainland China plan to drive NEV growth in 2024, either by expanding manufacturing capacity or stipulating purchase.<\/p>\n\n\n\n

For example, Sichuan said<\/a> it would step up the construction of charging and battery-swapping facilities, and further promote the rollout of NEVs in a provincial campaign called Electrifying Sichuan.<\/p>\n\n\n\n

The south-western province, already a national battery-making hub, intends to take the local EV battery industry to a new level. It aims to turn Yibin, a relatively small city of 5.5 million people, into \u201cthe capital of power batteries<\/a>\u201d. The plan is to work with leading battery manufacturers including CATL, which is building a massive plant there.<\/p>\n\n\n\n

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A technician installs batteries onto a new-energy vehicle at the production line of Kaiyi Auto in Sanjiang New Area of Yibin, Sichuan province (Image: Wang Xi \/ Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

It also plans to establish an industry chain for fuel cell vehicles, particularly those using hydrogen, in its capital Chengdu and nearby municipality Chongqing.<\/p>\n\n\n\n

Up in China\u2019s north-east, the Jilin government has thrown its weight<\/a> behind helping Hongqi, an auto brand beloved by many Chinese leaders, launch EV models. A newly commissioned factory will make auto company BYD\u2019s signature fast-charging blade batteries for FAW Group, which owns Hongqi, according to a government press release<\/a>.<\/p>\n\n\n\n

Political aides are also calling on their respective governments to seize emerging opportunities within the industry.<\/p>\n\n\n\n

Cheng Di, chairperson of Kelong Group, a Henan-based conglomerate, suggested that the provincial government spearhead the making of sodium-ion batteries, which do not use lithium, a metal greatly in demand for clean energy tech. Cheng, who is a member of the Henan Provincial Committee for the CPPCC, told Dahe News<\/a> that the move could help the province find a new economic growth point.<\/p>\n\n\n\n

Wang Lin, a university professor and member of CPPCC\u2019s Chongqing municipal committee, underscored<\/a> the need for the mega-city to work with nearby Chengdu to start building an industry cluster for so-called \u201cintelligent and connected new energy vehicles\u201d. The concept refers to a future generation<\/a> of cars that can exchange information with other vehicles, individuals, roads and the cloud.<\/p>\n\n\n\n

An \u2018important lever\u2019 for economic growth<\/h2>\n\n\n\n

The collective passion for NEVs echoes the fact that the industry has become a pillar of regional growth for many Chinese regions as the country faces an economic downturn, reported Shanghai-based financial outlet Yicai<\/a> in November. <\/p>\n\n\n\n

The NEV industry is one of China\u2019s nine strategic emerging industries, and has become an \u201cimportant lever\u201d for various local governments to achieve industrial upgrades and accelerate economic growth, Feng Lei, deputy director of Hangzhou-based research institute Firestone, told Yicai. <\/p>\n\n\n\n

\u201cChina\u2019s NEV industry has gone past the tipping point that marks the end of slow initial growth and entered a phase of exponential growth,\u201d Liu Daizong, a transport policy expert, tells China Dialogue.<\/p>\n\n\n\n

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Many provinces want to take advantage of this period of rapid expansion and are, accordingly, making further plans in the NEV sector, notes Liu, who is East Asia director at the Institute for Transportation and Development Policy, an international NGO focusing on sustainable public transport solutions.<\/p>\n\n\n\n

But some officials worry about saturation. Xin Guobin, deputy head of China\u2019s Ministry of Industry and Information Technology (MIIT), warned<\/a> in January that some regions and companies had been \u201cblindly\u201d launching NEV projects. Xin pointed to the lack of \u201cexternal\u201d \u2013 or overseas \u2013 demand, and the fact that many NEV makers had yet to break even. <\/p>\n\n\n\n

NEVs\u2019 penetration rate \u2013 meaning their share of all cars sold \u2013 exceeded 30% in China last year, and could increase by 10% each year for the next five years or so, Liu believes.<\/p>\n\n\n\n

\u201cWe could see a 50% penetration rate in 2025, 10 years ahead of the government\u2019s target, and an 80-90% penetration rate in a decade or so,\u201d he says. This means that by the time NEV production lines are up and running, they could face large risks of overcapacity, he adds.<\/p>\n\n\n\n

Pushing for greater NEV consumption<\/h2>\n\n\n\n

Late last year, Beijing took a series of actions to drive up NEV sales. In September, MIIT and six other central-level agencies released an action plan<\/a> to stabilise the growth of the auto industry. The expansion of NEV consumption was the number one measure on it. In December, an economic-planning meeting<\/a> presided by Xi Jinping also identified spurring NEV sales as a task for the country this year.<\/p>\n\n\n\n

It\u2019s no surprise that 21 provincial-level regions \u2013 from the capital, Beijing, to Gansu on the edge of the Gobi Desert \u2013 plan to drive the sales and rollout of NEVs this year.<\/p>\n\n\n\n

\u201cThe industry chain of NEVs is very long. This means driving consumption can create a lot of jobs,\u201d Liu notes.<\/p>\n\n\n\n

Various measures are in the pipeline to stimulate the market. Zhejiang, for example, said<\/a> this year it would build 20,000 public charging pillars, including 10,000 in rural areas. Meanwhile, Hainan \u2013 the first Chinese province to ban the sale of fossil-fuel-powered vehicles \u2013 wants to launch an NEV renting system<\/a>.<\/p>\n\n\n\n

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A new energy vehicle with wireless charging capability is charged at a wireless charging facility at the Asian Games Village charging station in Hangzhou, Zhejiang\u00a0(Image: Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

More NEVs are expected to appear in an increasing number of smaller cities, towns and villages in the year to come. Eight provinces, from Guangxi to Gansu, expressed their intention to take \u201cbig-ticket items\u201d including NEVs to rural areas, a campaign the central government launched in 2020 and sped up<\/a> last year.<\/p>\n\n\n\n

\u201cWe expect the penetration rate [of NEVs] to exceed 30% in third- or fourth-tier cities in China this year,\u201d Liu Xiaoshi, executive deputy secretary general of China EV100, a Beijing-based think-tank, tells China Dialogue. \u201cThis will provide more market scope and opportunities.\u201d<\/p>\n\n\n\n

The hydrogen race<\/h2>\n\n\n\n

In contrast to the red-hot NEV sector, wind and solar power \u2013 two sectors that had been garnering great attention in recent years \u2013 have seen provincial interest wane.<\/p>\n\n\n\n

More than a dozen provinces included in their work reports plans to build large wind and solar plants, particularly offshore wind farms, but few talked about further scaling up manufacturing chains.<\/p>\n\n\n\n

\u201cThe wind and solar power sectors have seen 15 years of breakneck development. Developers have already secured enough resources, and it\u2019s hard for regional governments to offer new resources,\u201d an industry insider who requested anonymity tells China Dialogue.<\/p>\n\n\n\n

\u201cBesides, wind and solar power generators no longer get subsidies while selling their electricity, so they can\u2019t secure resources from the local government by investing in new factories,\u201d notes the source, a manager at a consulting firm focused on renewable power projects.<\/p>\n\n\n\n

Using green hydrogen to produce green methanol and green ammonia are popular directions for the industry<\/blockquote>Ran Ze, director of Environmental Defense Fund<\/cite><\/div><\/div>\n\n\n\n

But hydrogen energy, a budding technology, is having its moment. In Xinjiang, three cities, including the regional capital Urumqi, and a prefecture are turning themselves into hydrogen energy \u201cdemonstration zones<\/a>\u201d. Meanwhile, China\u2019s coal heartland Shanxi<\/a> is mulling a \u201cfull industry chain\u201d covering the production, storing, transport, processing and utilisation of hydrogen energy. In total, 13 provinces have written plans for the alternative fuel into their work reports.<\/p>\n\n\n\n

\u201cUsing green hydrogen [hydrogen made using renewable energy] to produce green methanol and green ammonia are popular directions for the industry at the moment,\u201d says Ran Ze, director of technical innovation at the Beijing Representative Office of the Environmental Defense Fund, an international NGO.<\/p>\n\n\n\n

The costs of producing and transporting hydrogen are \u201crelatively high\u201d right now, and actions need to be taken to slash costs and, particularly, reduce hydrogen leaks during production and transport, Ran tells China Dialogue.<\/p>\n\n\n\n

\u201cThe advantage of hydrogen is that it can be used in those hard-to-abate sectors where cutting emissions is difficult, such as industry and long-distance transport,\u201d Ran notes, adding that there is great enthusiasm for hydrogen not just in China, but globally, too. <\/p>\n\n\n\n

Reigniting interest in new energy tech<\/h2>\n\n\n\n

It isn\u2019t just regional officials who are thinking big. Shanghai should strive to become a \u201cworld-class hydrogen energy city\u201d and help the wider Yangtze River Delta region get a head start in the global race of the \u201chydrogen economy\u201d, suggested Li Guohua, a Shanghai member of the CPPCC and of a Chinese minority party, according to Wenhui Daily<\/a>.<\/p>\n\n\n\n

Wang Zhenxin, a chemist and member of the Jilin Provincial Committee of the CPPCC, called on the province to hasten becoming a \u201cgreen hydrogen valley of the north\u201d, reported People\u2019s Daily<\/a>. Similar voices were also heard in Beijing<\/a>, Shandong<\/a> and Wuhan<\/a>.<\/p>\n\n\n\n

The success of the renewable energy and NEV sectors over the past few years has \u201cgreatly ignited\u201d regional governments\u2019 enthusiasm in investing in emerging energy technologies, Wu Wei, an associate professor at Xiamen University\u2019s China Institute for Studies in Energy Policy, tells China Dialogue.<\/p>\n\n\n\n

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\u201cSome regions have proposed to build industrial clusters for hydrogen energy because they wanted to plan their moves in advance and get an upper hand [given] the upcoming competition,\u201d Wu notes.<\/p>\n\n\n\n

Provinces including Jiangsu<\/a>, Liaoning<\/a>, Henan<\/a> are looking to develop hydrogen energy and energy storage technologies hand in hand. Excess wind and solar power will be used by factories to produce hydrogen for storage. When there is a power shortage, it can then be turned into electricity through burning or fuel cells.<\/p>\n\n\n\n

Wu notes that hydrogen can store energy for longer than other methods. But he points to roadblocks: the demand for hydrogen in energy storage is limited at present, and may not grow much in future. Similarly, high production costs could continue to drag down the competitiveness of green hydrogen, and its downstream products.<\/p>\n\n\n\n

Wu cautions: \u201cSome regions\u2019 passion to go big on hydrogen energy right now might lead to invalid investments \u2013 investments that do not have market demand \u2013 and, therefore, pile up fiscal pressure on regional governments.\u201d<\/p>\n\n\n\n

A boost for biodiversity<\/h2>\n\n\n\n

Nature conservation stands out as a key common topic among all provinces in China, which will hold the presidency of UN Biodiversity Conference COP15 until October.<\/p>\n\n\n\n

Most provincial two sessions took place after 18 January, the day a new national action plan<\/a> on biodiversity protection was released. The plan covers up until 2030 and is part of China\u2019s obligation under the Kunming-Montreal Global Biodiversity Framework, adopted at COP15<\/a> in December 2022.<\/p>\n\n\n\n

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The plan instructed \u201call regions and sectors\u201d to incorporate biodiversity conservation into their \u201cmid- to long-term\u201d development plans. This signifies that central government sees biodiversity as a national strategy that penetrates all levels of government functions, and goes hand in hand with economic development, says Huang Baorong, academic director of the Institute of Sustainable Development Strategies at the Institutes of Science and Development, Chinese Academy of Sciences.<\/p>\n\n\n\n

During this year\u2019s work reports, nine provinces pledged to enhance their biodiversity protection efforts, while 18 said they would start or speed up the building of national parks \u2013 a flagship campaign for China to enhance its biodiversity.<\/p>\n\n\n\n

For example, Jiangxi, a landlocked province in southern China, promised to fast-track its green transition through various measures, such as by setting up protected areas and following a developmental model \u201cled by the ecology\u201d.<\/p>\n\n\n\n

The province is currently building part of the Wuyishan National Park \u00ad\u00ad\u00ad\u2013 a vast mountainous area roughly equivalent in size to Hong Kong \u2013 home to nationally protected species<\/a> such as hairy-fronted muntjacs and Tibetan macaques.<\/p>\n\n\n\n

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Tibetan macaques in the Wuyishan National Park (Image: Jiang Kehong \/ Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

Qinghai intends to plant trees and carry out ecological restoration on at least 3,667 square kilometres \u2013 equivalent to about three Hong Kongs \u2013 of its higher-altitude areas.<\/p>\n\n\n\n

Billed as the \u201cWater Tower of China\u201d, Qinghai is the origin of three of China\u2019s major rivers: the Yangtze, Yellow and Lancang (which becomes the Mekong). The province pledged to protect and restore the ecosystem of Sanjiangyuan, where the headwaters of the three rivers meet, and speed up its work building a national park there.<\/p>\n\n\n\n

Provinces\u2019 plans reflect their determination to implement the high-level policy of turning China into an \u201cecological civilisation\u201d, according to Huang. <\/p>\n\n\n\n

At the same time, most areas with national parks are remote and have limited economic opportunities, so building such parks \u201ccan help regional governments develop various industries, such as natural education and eco-tourism, on top of protecting ecosystems and biodiversity\u201d, he tells China Dialogue.<\/p>\n\n\n\n

Growing societal interest in ecological issues<\/h2>\n\n\n\n

Huang notes that ecological issues have become a topic of common interest in society, leading scholars and business leaders to pay more attention to it in their proposals.<\/p>\n\n\n\n

For example, Liao Qinchang, a plant conservation researcher in Yunnan, suggested during this year\u2019s provincial two sessions that the local government should protect at-risk wild plants by cracking down on illegal online trading, reported Yunnan Net<\/a>. \u201cSome retailers sell rare and endangered wild plants openly through online platforms,\u201d Liao noted.<\/p>\n\n\n\n

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Dao Lei, who works at a nature reserve in Yunnan, called<\/a> for a concerted province-wide plan to promote daily-use items made with bamboo instead of plastic in order to cut down on waste.<\/p>\n\n\n\n

Both Liao and Dao were deputies at the Yunnan Provincial People\u2019s Congress this year.<\/p>\n\n\n\n

Voices from civil society \u201ccan help China establish and improve an ecological and environmental governance system with diverse participants,\u201d Huang says.<\/p>\n\n\n\n

Since China started to prepare for its COP15 presidency in 2018, regional governments have been exploring new ways to \u201cprotect and utilise\u201d biodiversity, and the level of enthusiasm from all walks of life for protecting biodiversity has also \u201creached a new high\u201d, wrote three experts from the Institute of Environmental Ecology at the Chinese Research Academy of Environmental Sciences.<\/p>\n\n\n\n

In a column for Guangming Daily<\/a>, they highlighted the lack of funding and consistent effort across regions as key challenges. Regional authorities must increase financial input, devise clearer roadmaps and create incentives to step up their efforts in the field, they said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Ahead of the country\u2019s most important annual political gatherings, local governments pledged to accelerate electric vehicle growth and protect biodiversity<\/p>\n","protected":false},"author":3988,"featured_media":119521,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758],"tags":[13444,18132,580,14061],"hashtags":[],"country":[20000110],"class_list":["post-119456","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-electric-vehicles","tag-hydrogen","tag-policy","tag-transport","country-china"],"acf":[],"yoast_head":"\nTwo Sessions: EVs dominate Chinese provincial plans | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"Ahead of the country\u2019s most important annual political gatherings, local governments pledged to accelerate electric vehicle growth and protect biodiversity\" \/>\n<meta name=\"robots\" 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