At China’s annual National People’s Congress meeting this month, Prime Minister Li Qiang announced plans to build more solar and wind farms as well as hydropower projects.
China is already the world’s largest producer of renewable energy and holds a near-monopoly in the global renewable energy manufacturing and supply chain. Last year alone, China produced more solar panels than the United States has ever produced.
China’s dominance of electric vehicle battery components and solar panels has unsettled Western governments including the European Union and the United States, which accuse Beijing of “huge” state subsidies. The United States has responded with its own subsidies and incentives to boost U.S. production.
China is also the world’s largest consumer of fossil fuels and the world’s largest emitter of carbon dioxide. But analysts say it puts Beijing in a good position to cooperate on renewable energy growth with somewhat surprising groups such as Persian Gulf oil producers.
Gulf countries including Saudi Arabia, the United Arab Emirates, Iran, Kuwait and Iraq will account for about one-third of world crude oil production by 2022, according to the U.S. Energy Information Administration. But analysts say they are also diversifying away from these industries, with help from China.
Eli Rettig, an energy and geopolitics researcher at Bar-Ilan University in Israel, told VOA that this is a mutually beneficial investment because the shift to green energy will free up oil for sale to major consumers in the Gulf region of Asia. , especially China.
“Oil is cheaper than water in this region,” Rettig noted. “The more you invest in the Gulf, the more you can trust that even under sanctions they will see that you have access to oil. China is the world’s largest oil importer and needs to make sure that if there is a conflict with China, there is someone to They sell cheap oil. America”
But this is not the Gulf countries’ love for China, but Beijing’s ability to implement large projects at lower costs, said Li-Chen Sim, a non-resident fellow at the Middle East Institute in Washington.
“China can produce low-priced polysilicon for solar panels because labor costs are cheaper and therefore the products are cheaper. Chinese solar model assembly is 50% cheaper than in Europe,” she told VOA.
Western countries have raised tariffs on Chinese imports and provided new subsidies to encourage domestic competition. The European Union this month approved import taxes on Chinese electric vehicles and is considering import duties on solar panels.
The European Union this month moved closer to banning products made using forced labor, which is expected to include polysilicon modules for solar panels produced in China’s western Xinjiang region, which supplies nearly half of global demand.
The United States stopped all imports from the region in 2022 as part of a crackdown on forced labor by the region’s Uighur Muslim minority, which China denies.
Despite resistance from the West, plummeting solar prices have made it more difficult to compete with Chinese manufacturers.
Still, Sim said there is some competition from China in renewable energy in the Gulf countries.
“China plays a role [in the Gulf] In the area of financing, contractors and equipment – they are important when it comes to financing. But in reality, it’s not as important as Japan,” she said. “Japan’s role in financing green energy in the Gulf is huge. “
Japanese Prime Minister Fumio Kishida signed 23 agreements with the UAE to strengthen cooperation and existing partnerships during his July 2023 trip to the Middle East aimed at promoting green technology and regional economic ties in Japan.
Japan became the first country in the world to formulate a national hydrogen strategy in 2017, planning to become the first “hydrogen society.”
But it must compete with China, which is already the world’s largest producer and consumer of hydrogen, even though most hydrogen is produced from carbon-emitting fossil fuels such as coal.
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