Highlights

China and Japan to further open up bilateral industrial cooperation

The Regional Comprehensive Economic Partnership (RCEP) trade agreement will take effect as of January 1, 2022. In light of the changing regional economic landscape, on November 4, 2021, China Development Institute (CDI) and the Pangoal Institution co-organized a webinar themed Sino-Japan industrial development and bilateral cooperation under RCEP where scholars from both countries shared insights on how China-Japan economic cooperation and trade should respond to global economic uncertainties and how to bring China-Japan industrial cooperation to a higher level.

Dr. Guo Wanda, Executive Vice President of CDI, proposed that China and Japan bilateral cooperation should further open up in order to achieve win-win outcomes under the framework of the RCEP against the suffering global economy, while fully accommodating market demands and complementarily building on each party’s respective strengths.

Yi Peng, Chairman of Pangoal Institution, suggested that China and Japan should explore cooperation in finding solutions to key issues such as the aging population and climate change. In addition, China can learn from Japan’s rich and valuable experience in medical and recreational industries and clean energy technology development. Once RCEP comes into force, the rest of RCEP signing members will be motivated to accelerate their rectification process and attracted by the huge regional potential unleashed by it. The global economic recovery will undoubtedly benefit from it as well.

Global supply chain has been largely affected by Sino-U.S. trade frictions and the COVID-19 pandemic. Li Wei, professor at School of International Studies, Renmin University of China, suggested that since Japan and the United States share strong interests in reshaping the supply chain, industrial transfer is likely to occur among Japanese companies, namely the China-based Japanese enterprises that operate internationally, especially those in the manufacturing sector. Although it’s less likely to see obvious industrial transfer among Japanese multinationals with China as their main consumer market.

Chi Hung Kwan, senior fellow at Nomura Institute of Capital Markets Research, said that China's "dual circulation" strategy will have impacts on the global economy as well as Sino-Japan cooperation. On one hand, China's growing domestic production will lead to reduced imports of intermediate products such as parts and components, and Japanese and Korean enterprises will face greater competitive pressure from their Chinese counterparts. On the other hand, with the continuous upgrading of China's domestic industries, more commodities originally produced for exports will be sold domestically, providing opportunities for emerging economies such as ASEAN to expand their share of labor-intensive products in the global market.

Pang Zhongying, distinguished professor at Ocean University of China, advised that under the impact of the pandemic, countries around the world have tightened their trade policies, posing a significant challenge to the multilateral trading system. Once RCEP takes effect, free trade among East Asian economies will be enhanced. As two major economies in East Asia and important members of RCEP, China and Japan should establish a more resilient industrial chain and supply chain in a bid to alleviate the adverse effects of unilateralism and anti-globalization on regional economic development.

He Jun, researcher at the Institute of Industrial Economics of Chinese Academy of Social Sciences, offered that there is still huge potential for Sino-Japan cooperation. On one hand, China needs to further open-up its market while improving the intellectual property protection mechanism. On the other hand, Japan derives its industrial advantages from a closed supply chain; its opening-up to China is critical to the qualitative improvement of Sino-Japan cooperation. Moving forward, Sino-Japan industrial cooperation lies in industries where one has a lot to offer to the other, such as Japan’s elderly care and medical device industries and China’s mobile communication terminals and system equipment industries.

Cao Zhongxiong, Director of New Economy Research Institute at CDI, proposed that in order to cope with the challenges brought about by a changing global industrial chain, China-Japan cooperation should seize four major opportunities, namely, 1) consumption upgrade in China's market; 2) transformation of China's industrial structure; 3) China’s efforts to make up for missing links in its industrial chain and supply chain; 4) China's efforts to participate in depth in global industrial operations. China-Japan future cooperation will need to give consideration on higher level industrial chain and supply chain, and digital technology applications.

Liu Qingbin, professor at Institute for Advanced Study, Yokohama National University, suggested that as a leader in analog technology, Japan is highly dependent on fax for daily information exchange within and between its government authorities and enterprises, with digital reform slowly progressing. Thus, there are broad prospects for cooperation between China and Japan in digital technology platform and digital business platform among other fields of digital economy in the future. In addition, China and Japan future cooperation should lean towards industries like prefabricated construction which is a well-developed industry in Japan but not in China.

Program

Opening Remarks

• YI Peng, Chairman of Pangoal Institution, China
• GUO Wanda, Executive Vice President of China Development Institute

Panelists

• Chi Hung KWAN, Senior Fellow at Nomura Institute of Capital Markets Research, Japan
• HE Jun, Researcher at the Institute of Industrial Economics of Chinese Academy of Social Sciences
• PANG Zhongying, Distinguished Professor at Ocean University of China, Senior Fellow at Pangoal Institution, China
• Liu Qingbin, Professor at Institute for Advanced Study, Yokohama National University, Japan
• LI Wei, Professor at School of International Studies, Renmin University of China
• CAO Zhongxiong, Director of New Economy Research Institute, China Development Institute

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Program

Opening Remarks

Moderator: Dr. GUO Wanda, Executive Vice President of China Development Institute

Speakers:

• Prof. FAN Gang, President of China Development Institute
• Prof. LI Junfeng, Director of Chinese Renewable Energy Industries Association
• Mr. David MORRIS, Vice President of the United Nations Sustainable Business Network for Asia Pacific

Session One: Green Economy and Carbon Neutrality

Moderator: Dr. GUO Wanda, Executive Vice President of China Development Institute

Speakers:

• Prof. TANG Jie, Professor of School of Economics and Management, Harbin Institute of Technology, Shenzhen; Former Deputy Mayor of Shenzhen Municipal Government, China
• Dr. LI Lailai, Affiliated Researcher of Stockholm Environment Institute, Sweden
• Prof. YANG Lei, Deputy President of Energy Institute at Peking University, China

Session Two: Energy Transition and Carbon Emission Reduction

Moderator: Dr. LI Lailai, Affiliated Researcher of Stockholm Environment Institute, Sweden

Speakers:

• Dr. Louise VAN SCHAIK, Head of Unit EU & Global Affairs, the Netherlands Institute of International Relations
• Prof. Joachim VON BRAUN, Director of Center for Development Research (ZEF) University of Bonn, Germany
• Mr. LIU Qiang, Director of Programmes (China) of Children's Investment Fund Foundation
• Ms. Margaret CHEN, BP China Chief Economist

Highlights

China to promote international collaboration on climate change to achieve peak emissions and carbon neutrality goals

Firstly, enterprises and local governments need to have a better understanding of the rationale behind China’s peak emissions and carbon neutrality goals. This will require extensive education regarding these goals and carbon transition. Secondly, scientific and policy research is essential, especially in dealing with the relationship between the government and the market, and the government and the private sector. Thirdly, the emphasis should be shifted from total energy consumption to total carbon emissions to avoid unhelpful restrictions being placed on renewable energy generation as we endeavour to reduce the consumption of fossil fuels. Fourthly, carbon lock-in should be prevented, building new coal power plants should be prohibited and R&D and application of carbon caption and sequestration technologies should be undertaken.

• Prof. FAN Gang, President of CDI 

The core of “carbon neutrality” action is to advance the transition from the resource-dependent development model to the technology-driven development model across both the economic and social planes. This transition manifests in three areas: growth model, energy system and lifestyle. It is important that carbon neutrality is approached without compromising energy or economic security. To better advance this energy transition, it is important to first, complete the policy transition from total energy consumption control to total fossil fuel consumption control; second, promote an earlier carbon peak of coal consumption with appropriate control of coal power plant development; third, control the development of non-fossil fuel energy such as wind power and solar power; fourth, create systematic safeguarding of the advancement of this energy transition.

• Prof. LI Junfeng, Director of Chinese Renewable Energy Industries Association

Climate change poses great challenges for all mankind. It is crucial for all nations to avoid zero-sum thinking and to instead keep an open mind and work collaboratively towards realising the common goal of advancing green development and climate change action while reserving differences and allowing competition. The Asia-Pacific region could explore the establishment of a regional cooperation framework to better facilitate energy transition, green infrastructure construction, green finance implementation and green BRI development.

• Mr David MORRIS, Vice President of the United Nations Sustainable Business Network for the Asia-Pacific

The structural reform of the supply side of business is vital to achieving peak emissions and carbon neutrality. Taking Shenzhen as an example, the city’s structural upgrade of its industries, energy and technologies in recent years has successfully shifted its economic growth pattern while meeting air quality standards and reaching peak carbon emissions. The Shenzhen experience proves the close correlation between advancing manufacturing and reaching peak carbon emissions.

• Prof. TANG Jie, Professor of the School of Economics and Management, Harbin Institute of Technology, Shenzhen; Former Deputy Mayor of Shenzhen Municipal Government, China

The sixth IPCC assessment more accurately observed that the Earth’s climate system is undergoing a significant change characterised by warming at an unprecedented speed. The heavy rainfall seen in China and many countries around the world in 2021 is an example of the danger of global warming. These grim facts warn all mankind to take immediate action to mobilise the necessary resources to adapt to climate change, thereby reducing the impact of natural disasters. The advantage of appropriate adaptation measures is three-fold: they avoid future losses, encourage economic growth through innovation and offer wide-ranging social and environmental benefits.

• Dr LI Lailai, Affiliated Researcher at the Stockholm Environment Institute, Sweden

Firstly, carbon neutrality and energy transition is a comprehensive project; the approach to which varies, as illustrated by the different methods employed in developed countries. It is important to find a route that is appropriate for China’s economic development. Secondly, a healthy and functional energy market is fundamental to the advancement of energy transition and the achievement of carbon neutrality. Thirdly, it has been proven in many instances that carbon neutrality is viable. We need to have faith in ourselves and settle our minds on success. The general public needs to be informed and motivated as well.

• Prof. YANG Lei, Deputy President of the Energy Institute at Peking University, China

The European Union has been aware of the severity of climate change since the 90’s. In the following decade, related policies and legislations were introduced. In 2005, carbon exchange was set in motion, as well as a corresponding standards and policy system. Recently, the European economy has suffered a major blow from the Covid-19 pandemic. The green economy and digital economy will be the driving forces behind the region’s post-pandemic economic recovery. The European Green Deal has proposed even stricter goals for carbon neutrality. In the future, the EU will further improve energy foreign policy to facilitate a synergic energy transition. Here, there is great potential for China and the EU to collaborate to create standards for environmental protection, energy transition and R&D for green technology.

• Dr Louise VAN SCHAIK, Head of Unit EU & Global Affairs, the Netherlands Institute of International Relations

Firstly, China and the EU both play important roles in setting the global climate policy agenda and coordinating initiatives for the implementation of the Paris Agreement. They are thus able to collaboratively mobilise resources for the Green Climate Fund and work towards building the global carbon market and strengthening the link between climate policy and development. Secondly, China and the EU should enhance trade coordination to minimise the negative environmental impact that trade activities can have on other nations. Thirdly, considering China’s extraordinary success in reforesting, China and the EU could potentially collaborate in sustainable agriculture policymaking. Fourthly, China and the EU could initiate joint cooperation activities with African nations for sustainable land use, food security, forest protection and energy innovation.

• Prof. Joachim VON BRAUN, Director of the Center for Development Research (ZEF) University of Bonn, Germany

Firstly, it is important to focus on coordinating the energy transition and economic development, especially the balance between costs and benefits, as well as between short term and long-term goals. Secondly, the road map for reaching peak carbon emissions and carbon neutrality needs to be clarified to avoid carbon lock-in. Thirdly, coordinated planning at the regional level should be explored taking into account regional variations and local needs. Fourthly, international cooperation and exchange should be strengthened to seek mutual benefits.

• Mr LIU Qiang, Director of Programmes (China) of Children's Investment Fund Foundation

Firstly, the decline in total primary energy consumption in 2020 was significant, nearly 5%, with carbon emissions falling by about 6%, the largest annual decline since World War II. However, the huge reduction in oil consumption in the transportation sector was caused by Covid-19 prevention measures, which are unsustainable. Secondly, the world's energy structure is still moving towards cleaner energy and low carbon. The use of coal and oil has been decreasing while the use of natural gas and renewable energy has been increasing. However, the level of oil consumption in China is bucking global trends and continues to grow. Thirdly, last year, despite the world being in the grip of the Covid-19 pandemic, global power generation and electricity consumption did not see dramatic reductions and instead remained roughly the same thanks to China. The global increase in renewable energy has mainly come from China as well. Fourthly, the leading global trend in primary energy structure change is the continuing decline in the use of fossil fuels.

• Ms Margaret CHEN, BP China Chief Economist

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Program

Welcom Remarks

• Fan Gang, President of CDI
• Ye Xiaowen, Acting Chairman of CDI

Moderator: Li Jinkui, Senior Research Fellow of CDI

Session One - China and the shifting global industrial chain

Moderator: Xu Lin, Chairman of China-U.S. Green Fund

• Wang Changlin, Director of Macroeconomic Research Institute, NDRC, China
• Tang Jie, Professor of School of Economics and Management, Harbin Institute of Technology, Shenzhen, China; Former Deputy Mayor of Shenzhen Municipal Government, China
• Huang Qunhui, Director of Institute of Economic, Chinese Academy of Social Sciences
• Yu Miaojie, Deputy Director of National School of Development, Peking University, China
• Wang Guowen, Director of Research Center for Logistics and SCM, CDI

Session Two - Systematic innovation and industrial development

Moderator: Li Jinkui, Senior Research Fellow of CDI

• Ma Mingjie, Director of Research Department of Innovation Development, The Development Research Center of the State Council, China
• Mu Rongping, Dean of School of Public Policy and Management, University of Chinese Academy of Sciences
• Wu Jinxi, Director of Center of Emerging Industry Research, School of Social Sciences, Tsinghua University, China
• Zheng Zhibin, Vice President of Strategy Department, Huawei

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Program

Welcome Remarks

• Eva Cheng, President, OHKF

Opening Remarks

• Paul Chan Mo-po, Financial Secretary, Government of the HKSAR
• Zhang Xiaoqiang, Executive Vice Chairman, China Center for International Economic Exchanges
• Lu Wenpeng, Deputy Secretary-General of Shenzhen Municipal Committee of CPC, Director General of the Policy Research Office of Shenzhen Municipal Committee of CPC

Panel Discussion

Panelists:

• Wang Xiang, Deputy Director, Department of Innovation and High-Tech Development, NDRC, China
• Liu Zhongpu, Full-time Member of Consultation Commission for Shenzhen Municipal Committee of CPC
• Tsui Lap-chee, President of The Hong Kong Academy of Sciences
• Lo Yuk Ming, Associate Dean (Research), Faculty of Medicine, The Chinese University of Hong Kong
• Zhao Xinli, Academician, China Science Center of International Eurasian Academy of Sciences
• W. John Kao, Head of the Biomedical Technology Cluster at HKSTP

Invited speakers:

• Sit Wing-hang, Secretary for Innovation & Technology, Government of the HKSAR
• Guo Wanda, Executive Vice President of CDI

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Program

15:30 -15:35(GMT+8)

Welcome And Housekeeping:

Mike Wardle, Z/Yen Group

15:35-15:45(GMT+8)

Setting The Scene: 

Professor Michael Mainelli, Z/Yen Group

Simon Mills, Z/Yen Group

15:45-16:50(GMT+8)

Round Table Discussion

Turks & Caicos Islands

Shenzhen  

Luxembourg  

Dublin  

Hong Kong

Abu Dhabi

Nur-Sultan

Xi'an

Mauritius

GIFT City-Gujarat

Dubai

Moscow

Ho Chi Minh City

Nairobi

Guangzhou

Guernsey

Kigali

Busan

Frankfurt

16:50

Open Discussion

17:20

Summary & Close:

Professor Michael Mainelli, Z/Yen Group