China, South-South Cooperation and Supporting Green Development

By Jiaqi Lu

The exchange of knowledge, technology and resources among developing countries through South-South cooperation has been crucial in driving green development forward. Over the past two decades, China has emerged as a key player in South-South cooperation through its development initiatives, including development finance and recent support for renewable energy. 

A new special policy study published by the China Council for International Cooperation on Environment and Development (CCICED) examines China’s role in fostering sustainable development and South-South cooperation. The study finds that due to China’s own practical development experience and its role as a key contributor in overseas development finance, China is critical for the global effort to combat climate change. Furthermore, the study advises China to adjust its model of South-South cooperation from a country-oriented model to an issue-oriented one, with sustainability at its core.

In particular, the authors argue that South-South cooperation has the potential to reshape the international development landscape by empowering the Global South to independently pursue sustainable development. China’s experience in green development, coupled with its financial support for infrastructure through institutions like the New Development Bank and the Asian Infrastructure Investment Bank, is important for the Global South. These efforts are helping to close the infrastructure and financing gaps in many developing regions while promoting environmental sustainability.

Over the past two decades, China has deepened its engagement with the Global South countries. The Belt and Road Initiative (BRI) is a prime example of how these engagement efforts are being translated into large-scale infrastructure projects across Africa, Asia and Latin America. From the 2000s to the 2010s, however, Chinese developmental finance and investments faced widespread international criticism for their substantial focus on fossil fuel and carbon intensive projects. 

To incorporate the need for sustainable development, China took steps to integrating environmental considerations into its international cooperation strategies. In 2017, the BRI has incorporated green standards, promising that future Chinese-funded projects adhere to certain climate and environmental standards. This shift is consistent with China’s own domestic push towards green development over the past decade, as China has implemented measures such as large-scale reforestation projects and a rapid transition to clean energy. China’s experience in managing the trade-offs between economic growth and environmental protection could potentially position it as a valuable partner for other developing countries facing similar challenges. 

China’s green shift in South-South cooperation has already begun to show tangible results, particularly in the field of renewable energy. For instance, since 2019, China’s investments in Africa have shifted away from fossil fuel projects. Instead, Chinese development finance institutions (DFIs) are investing in clean electricity generation and grid system, helping to electrify industrial parks in Uganda and upgrade its industrial capacity and productivity. 

However, there are many challenges in the current framework of South-South cooperation. Historically, a significant portion of China’s investments in the Global South has been directed towards fossil fuel projects, which stands in stark contrast to the growing need for clean energy solutions. China must take steps to decarbonize its overseas energy profile as the goal of South-South cooperation evolves. 

The ongoing global demand for low-carbon technologies offers a unique opportunity for China to play a leading role in the green transition. In practice, China should also boost its decarbonization efforts, such as facilitating green technology transfer and early retirement of Chinese-owned coal-fired power plants, to ensure that future South-South cooperation is fully aligned with global sustainability goals. By sharing knowledge, financial resources and innovative technologies, countries in the Global South, with China’s support, can play a more prominent role in the global clean energy supply chain. 

With continued focus on clean technologies and green infrastructure, China can provide unique support for sustainable development and continued cooperation in the Global South.

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