China’s rise as a global powerhouse for clean technology and green finance has long been felt across Southeast Asia, particularly through more affordable solar panels, batteries and electric vehicles.
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However, the country can do more to help its southern neighbours decarbonise their economies and transition to net zero emissions, suggested sustainable development economist and Columbia University professor Dr Jeffrey Sachs.
“Many developing countries that need electricity can’t pay for [it] upfront – they need long-term financing,” he told the Eco-Business Podcast. “China’s deep financial strength and affordable technology can greatly support the energy transition across the Global South.”
Not only can China tap into its large pool of savings and low interest rates, it can also leverage Hong Kong’s offshore renminbi markets to increase cross-border green finance, said Sachs, who is also president of the United Nations Sustainable Development Solutions Network (SDSN).
It is with this optimism in the regional collaboration that UN-SDSN launched the Greater Bay Area-Asean Initiative last October, a cross-border platform linking cooperation in trade, green finance, infrastructure and innovation. The Greater Bay Area (GBA) covers the most prominent trade, manufacturing and financial hubs in southern China, including Hong Kong, Shenzhen and Guangdong, among others.
Sachs was in Hong Kong and Shenzhen for the GBA-Asean Initiative conference weeks after the Asean summit in Kuala Lumpur, which had attracted world leaders including United States President Donald Trump and Chinese Premier Li Qiang.
Against this backdrop, he shared his perspectives on how China’s climate leadership must evolve and what Asean stands to gain as clean energy, trade and finance converge to shape Asia’s next phase of sustainable development.
Tune in as we discuss:
- How the GBA can help finance Asean’s energy transition
- Asean’s rise as a strategically important player
- How China can improve its climate leadership
- Why investing in climate action and data still matters
This transcript has been edited for clarity.
You have said that China is unequivocally the world’s climate power today. Given that the US has pulled out of the Paris Agreement, what are the implications?
The whole world should be moving together for climate safety. There are lots of parts to that. One is to change the energy system to a zero-emissions energy system so we’re not pumping up carbon dioxide in the atmosphere. Another part is strengthening resilience – we are already experiencing warming, droughts and the floods, forest fires, typhoons and hurricanes.
Sad to say, my own country is not playing a constructive role right now. For political reasons, or maybe it’s confusion, the US has stepped away from this agenda.
Fortunately, China has incredible capacity to help lead in this.
What has China done in the last 20 years? It has brought down the cost of green and digital technologies so that they are now competitive everywhere, often cheaper than coal. In other words, China’s made it possible to make the transformations we need to do. Take solar modules – China produces them at eight cents a watt. That’s unprecedented. Yet some in the US call this “overcapacity”.
The costs have come down because of the advances of productive technologies, one technology generation after the next. I want China to use all of its capacity to help other countries to absorb this technology.
Many developing countries that need electricity can’t pay for upfront. They need long-term financing. So China has a larger pool of savings than any other country in the world; its interest rates are also considerably lower than US interest rates.
Hong Kong’s offshore renminbi markets could be used to enable the flow of finance. In this case, China’s deep financial strength and affordable technology can greatly support the energy transition across the Global South.
Where does Asean fit into this picture? Are there sensitivities in deepening cooperation with China, especially given the US-China tensions?
Asean is no longer a talk shop – it is becoming increasingly united and integrated. With Timor-Leste joining, it is now an 11-country bloc of 700 million people, with nearly US$5 trillion in GDP, and growing fast.
So it is a strategic and important player, as well as a diplomatic one.
Who showed up at the Asean Summit this year? Donald Trump, the premier of China, the prime minister of Japan, the president of Brazil, the president of South Africa. Why did they come? Because it’s a very important, fast-growing, dynamic region now.
The Asean Summit’s success was Malaysian prime minister Anwar Ibrahim’s diplomatic and political hope – it should continue this way.
One thing must be said – while I hope the US remains competitive and engaged in the region, the US cannot tell Asean not to deal with China. This is absurd. Look at the map. China is Asean’s largest trading partner. The two-way trade in 2024 was almost US$1 trillion. Asean and China are naturally very close trading partners and physically interconnected – through power grids, rail, highways and supply chains.
So this is a very clear point, and I think that the relationship of Asean – and I heard it from many leaders – should be highly cooperative with all regions of the world, and if the rest of the world accepts that, allows that to happen, that will be actually how Asean comports itself.
In terms of that diplomacy, what role do you think China needs to play when it comes to climate leadership?
China’s diplomatic role needs to match its economic and technologies leadership. One thing I would like China to do is to raise its ambition – China has the goal of net zero by 2060, but I’d like it to be 2050.
Chinese leaders sometimes say this is unrealistic. I disagree.
China excels at large scale, infrastructure, building and transformation. If it accelerates domestic investment in clean energy, it can fully utilise its industrial capacity while strengthening global leadership.
China is already doing a lot for multilaterism. It supports the international system. It supports the UN Charter. It supports the Paris Agreement. The Belt and Road Initiative is becoming the Green Belt and Road Initiative. So that’s very, very important. The new institutions like Shanghai Cooperation Organisation Bank are emerging too to build new green digital infrastructure.
One idea I strongly support is for China to establish a major UN campus in China for the global energy transition. There is currently no global centre in the world focused on the energy transformation.
There’s a UN Energy Programme, the Sustainable Energy for All programme, and the UN Environment Programme. In fact, there are UN operations in the US, Europe and even in Africa, but no major headquartered institution in Asia. China should host one of those, because the UN is a worldwide organisation. As the world’s leading producer, financier and deployer of green technologies, China is uniquely positioned to host this effort. It would reflect the UN’s global, not Western, character.
Bill Gates recently said “climate change won’t be humanity’s demise”. He says we should focus on improving human welfare instead. Do you see that as a softening stance on his end? Or a market signal?
Well, I read that letter, and I scratched my head. Honestly, it made no sense to me. We don’t have to choose between climate and poverty reduction. In fact, you can’t choose if you’re going to focus on poverty reduction and let the climate run wild. The poor are going to be bearing the brunt of climate disasters.
Climate change is a huge danger because we’ve already reached 1.5°C of warming. The people right now in Jamaica that are trying to recover from a Category 5 hurricane, perhaps the strongest hurricane in the Caribbean region in decade or in modern history. These are not abstract risks. Climate disasters are accelerating, and the science is clear. I’d say the reality is with the lives dealing with the hurricane disaster, not with the letter.
On the subject of extreme weather and climate data, the US has been cutting funding for agencies collecting and ensuring public access to that data. How can other countries respond to this?
We can’t lose planetary data. If we don’t know what’s happening to the planet, we don’t know how to adapt, how to stay resilient. We don’t understand really what’s coming. Cutting off these measurements would be a huge disservice [to the world].
Donald Trump does not represent the interests of the American people nor their views. He represents the views of the oil lobby. This is corruption, not analysis. He’s trying to deflect from the fact that we need an energy transformation.
When we stop Earth system measurements, this would be tragic and absurd. Other countries are going to have to step in and take leadership, and ideally, it would be the UN [as an institution] that should take the lead.
The UN has an earth observation system, as well as a science-based data centre in Vienna. But it is severely underfunded and lacks the resources to put the buoys, satellites and the other observational [technologies] into place. But collectively the world does.
What is happening in the US is reminiscent of what happened in Brazil under former president Jair Bolsonaro. The lobby groups of the agro industry wanted to expand in the Amazon. Some years ago when the Brazilian Space Agency said there were fires were raging in the Amazon, Bolsonaro fired its director. As if you could hide the truth by firing the individual that delivered the message.
I would like a president of the US to act with professionalism. I don’t know if we’re going to have that for a while. If we don’t, then other countries are going to need to step up.
