IS CHINA STILL A DEVELOPING COUNTRY?

On the right, Hei Yafei
By Ann Danylkiw - Dec 16th, 2009
Copenhagen, Denmark


China and the U.S. spent much of last week goading each other on impassible positions.

The Chinese, on behalf of developing country colleagues in the G77, want developed countries to live up to their “historic responsibility” for climate change and provide enough funding for adaptation and mitigation to help developing countries face the challenges posed by climate change.

The U.S., while offering money to developing countries, denied that China is still a developing country.

Over the course of the week’s press briefings, China’s lead negotiator, Su Wei, and Special Representative for Climate Change Yu Qingtai repeatedly berated the U.S. for not doing enough in terms of its emissions reduction targets or its financial commitments.

Last Tuesday, Su called the U.S. commitments “neither notable or remarkable” and said that the U.S. was fudging its numbers by making emissions reductions targets from 2005 levels. U.S. greenhouse gas emissions grew almost 17% from 1990 until 2007, he pointed out. Promising a 17% reduction by 2020 on 2005 numbers equates to little more than a 4% drop from 1990 levels. Most other countries are using 1990 as the baseline, which was agreed to at Kyoto.

In a press conference on Friday, He Yafei, vice minister of China’s Ministry of Foreign Affairs, clearly stipulated “China is a developing country.”

He acknowledged that while China’s aggregate GDP is very large, China still has 150 million people below the poverty line of a population of 1.3 billion. According to UN figures for 2007, mainland China's GDP per capita was just $2,604, lower than its emerging market compatriots Brazil and South Africa. Comparatively, India’s was $976 and the United States' was $45,047.

“I think China is still clearly a developing country, but it's a complex one with non-trivial wealth," said China expert and businessman Alexander Conrad.

"China's recent economic growth has been remarkable, millions have been lifted out of poverty and significant infrastructure has been put in place, yet millions remain in poverty and further investment as a developing country is needed. This is best viewed by looking at China's GDP or other metrics on a per capita basis, which validates the 'developing' status for the country.”

For the developing countries, who face the greatest threat from climate change, Copenhagen is about defending not only their right to industrialize in the longer term, but more so not losing ground they have gained already.
The U.S., noting China is the world’s fastest increasing emitter, has called for Beijing to commit to hard carbon caps.

Todd Stern, the U.S. special envoy for climate change, notes that “virtually all the growth in emissions going forward — nearly all of it — is going to come from developing countries. The IEA estimates 97 percent is going to come from developing countries between now and 2030. Fifty percent of it — 50 percent — from China alone over the next 20 years, of the growth in emissions.”

He Yafei says China is doing its part:
“China’s commitment is unconditional. What we have committed voluntarily is in full accord with Bali action plan. It has a full legal guarantee domestically. If you will compare what we are going to do with that of developed countries I would say proudly, is what we will be doing is no less than any developed country."

China’s reduction commitments will be passed in legislation and included in every forthcoming 5 year economic plan, plans around which China’s economy revolves and through which it delivers “the goods” to its people, He said.

Mark Griffin Smith, a professor of economics and business at Colorado College who spent the last year researching the business of climate change, notes that a key reason people agree to be governed is that government can "deliver the goods" and provide a better quality of life. "That is the legitimacy of the Chinese government," Smith said.

“They fundamentally cannot take a decision where its people perceive that they are not materially advancing. ... They see it as a question of political stability.”
“They’re looking for the creation of a climatic regime which allows them to continue to make economic progress and so they look at intensity targets, investment in renewable energy, investment in technology that continue them to maintain their economic progress,” Smith explained.

Sameel Huq of the IIED said: “China wishes to be seen as a developing country."
By Friday, Stern had intimated that the U.S. no longer considers China a developing country, saying that is not “in need” of financial assistance to adapt to climate change.

Also on Friday, He Yafei said that when China asks for financial adaptation and mitigation assistance, "It's not China asking, it is developing countries. It is the legal obligation of developed countries."
Indeed, China may not need significant financial assistance.

The largest number of CDM projects are located in China. According to Ecosecurities Indonesia Director Agus Sari, via a 2% tax on CDM transactions, China is already the largest contributor to the current form of the adaptation and mitigation fund.
A Climate Group report notes that China’s energy sector is dynamic, as 65% of all solar water heaters are in mainland China, which also manufactures 30% of all solar photovoltaic panels.

China’s wind power generation capacity has doubled each year for the past few. Last month at the Forum on China-Africa Cooperation meeting in Sharm el-Sheikh, Egypt, China and Africa concluded a bilateral aid agreement for technology demonstration centers, open market solutions, and loans for small to medium sized enterprises in Africa.

NYU estimates China’s development assistance, particularly to Latin America and Africa, has greatly increased in the last five years. China’s aid and investment activities in Africa alone totaled over $33 billion from 2002-2007.
That is why on Sunday, it was not at all surprising that He Yafei told the Financial Times that China would likely not take funds from a global adaptation and mitigation fund, having made clear on Friday that China’s reduction commitments for 2020 are not based on external assistance.

Even by Saturday evening, the tone from the Chinese had softened. A jovial Su Wei briefed the press on China’s position on the release of agreement draft texts that day, saying, “According to the negotiations and consultations in the last week, I believe that the consultations are positive and it is full of hope that we can achieve outcomes. ... The text show that we are moving forward and making positive progress.” Su added, "We emphasize that it is a party driven and inclusive process.”

In last night's press conference, the conciliatory language held, despite the fact that (as relayed by Ambassador Yu Qingtai) developed countries are insisting behind closed doors that “the Kyoto Protocol will not live beyond 2012.”
“We are ready to have exchanges, consultations, and negotiations with all the parties with a constructive attitude in the last days to work for success of the Copenhagen conference we are ready to make our utmost effort,” Yu said.

Earlier in the day, ministers of the four BASIC emerging market countries — Brazil, South Africa, India and China — made a coordinated statement of unity and commitment to the negotiating process. While there is little doubt that the BASICs are unified, China is the only one of the group able to fund it’s own green transition.

And China’s ability to cooperate so far, while the U.S. can barely offer a domestic legislative climate change guarantee, shows that Vice Minister’s He’s promise to the Financial Times that “China will not be an obstacle” to a deal at Copenhagen may be credible.