Evergrande problems signal basic shift in China's economic model
It is clear that the economic engines, such as property, that have fueled Chinese growth for at least two decades are sputtering. What is less clear is what kind of locomotives for growth can be found to take up the slack.
One, though, is obvious. Green technologies are being seen as a positive force to help save the planet and as the impetus to usher in a whole new era of Chinese growth and economic transformation.
The connection with Evergrande is direct. By suppressing the property market, China's authorities are hoping to free up trillions of dollars in future capital that can be put to better use financing solar farms, fields of wind power turbines, electric vehicles and new forms of clean energy.
This point was made with complete clarity by Zhang Xiaohui, dean of Tsinghua University's School of Finance, last month. She estimated that China's net-zero emissions strategy would require an investment of up to $46.6 trillion until 2060, the year by which Beijing has pledged it will reach carbon neutrality.
This investment, if achieved, will mean $1.2 trillion in investment each year from now until 2060, much of it earmarked for green infrastructure. For perspective, that is equivalent to investing Indonesia's entire current GDP each year for the next 39 years.
"China should follow its own pace when pushing for the carbon peak and carbon neutrality goals (and) strive to balance the economic development and carbon emission reduction," said Zhang, who is a former assistant governor of the People's Bank of China, the central bank.
https://asia.nikkei.com/Spotlight/Comment/Evergrande-problems-signal-basic-shift-in-China-s-economic-model