The common interpretation of “crisis” in Chinese politics is a juxtaposition of two opposing forces: threat and opportunity. For China, the pudding lies in the latter.
Last week, the country launched its whole-of-government plan for decarbonisation, centred on the economic potential of the renewable technology revolution, infrastructure expansion and energy input transformation. In contrast to the administration of US President Joe BIden, which frames the crisis as an existential threat to life as we know it, China’s top leader, Xi Jinping, sees climate change as an economic opportunity.
China wants to achieve carbon neutrality, but under one condition. When decarbonisation comes into conflict with its economic growth objectives, the former must be subordinate to the latter. As US political consultant James Carville famously said, "It's the economy, stupid!"
The Chinese Communist Party's renowned economist Liu Wei affirmed this approach, albeit with a more subtle tone, at the Green Economy Forum. “China’s development goal is to achieve basic modernisation by 2035,” he said. To reach a GDP per capita of $20,000 by 2035, a vision commanded by Mr Xi, China must grow at a minimum speed of 4.8 per cent per year over the next 15 years. This economic target remains paramount and unwavering.
Twenty months after the first Covid-19 lockdowns, China is still painstakingly seeking growth momentum from within. But domestic consumption is lacklustre at present, meaning state efforts to pump spending into infrastructure is delivering diminishing returns. At the same time, the coffers are absorbing shocks from spiking global commodities inflation.
China’s long-term prosperity may yet arise from consumption. But for its leadership, China’s power can only be secured by its industrial manufacturing.
“Manufacturing is the lifeline of China’s National economy,” according to Mr Xi, who believes that without manufacturing might, China cannot achieve its national rejuvenation. This is even more true in this era of supply chain deglobalisation.
When China’s manufacturing was crippled by a recent electricity shortage, the country moved swiftly to expand domestic coal production to support the sector, despite the consequences to its carbon footprint.
So here comes China’s economic paradox in the current decade: the country's manufacturing sector causes more pollution. How can China strengthen the heavily polluting manufacturing industries to consolidate its industrial power while ensuring its green energy transition?
The reality is that this unbridled decade for carbon emissions will enable China to lay out renewable energy infrastructure, innovate in renewable energy technologies and complete its renewable energy supply chains.
We will therefore see a decade of dual-track development in China: the expansion of high-tech manufacturing ensured by fossil fuel inputs alongside the green energy revolution.
Over $10 billion worth of tax breaks have been offered to coal-fired power and heating companies as of August. Inside China, more coal has been mined and coal financing has been further secured by the Chinese Securities Regulator.
China is unabashed with its recent upgrade of coal output in order to save manufacturing. According to its Glasgow pledge, China has nine more years to expand its carbon footprint through 2030, its declared date for carbon peak.
The manufacturing industry consumes 57 per cent of China’s power but only produces slightly over a quarter of China’s GDP. Across the broad economy, manufacturing industries emit the highest amount of carbon per unit of GDP. If decarbonisation were the dominant priority, it would be compelling for China to reduce its manufacturing capacity first to align power consumption with economic output.
The high-carbon industrial emitters include not only the dirty steel and mining industries but also the technology-defining semiconductor manufacturers. Decarbonisation will add further cost to China’s already laborious drive to chip independence.
Carbon emissions will enable China to lay out renewable energy infrastructure
The country saw an accelerating reduction of its manufacturing capacity even before the carbon pledge. Manufacturing contributed about a third of economic output in 2016 and only about a quarter in 2020.
China's net-zero carbon pledge is sure to further encroach on China’s global manufacturing prowess, and that could actually be dangerous.
The services economy has increasingly replaced the industrial economy, representing over half of China’s economic output in the current decade. Decarbonisation will further bias the growth of services over manufacturing, raising the risk that the latter will become hollowed out.
Of the many valuable lessons China has learned from US economic development, this one is particularly alarming. A strong global power can simply not thrive without robust and comprehensive manufacturing supply chains at home.
Outsourced manufacturing has produced disenfranchised workers in the American Rust Belt states. It has fragmented social cohesion and brought populism to the fore of economic thinking. Once the manufacturing capacity leaves for more competitive global markets, it is virtually impossible to restore it at home again.
China must avoid the US manufacturing conundrum.
Still, decarbonisation is undoubtedly a major economic opportunity for China. The hydrogen industry will balloon to $157 billion, from virtual non-existence, by 2025, according to the national development plan. As the Chinese economy desperately seeks the next growth engine, decarbonisation will unleash a sustainable wave of infrastructure and tech-induced industrial revolution.
“We have a narrative problem with climate change. We don’t have a human enemy to build a catchy story," historian and author Yuval Noah Harari entertainingly told the New York Times this week. Tech explosion, economic growth and employment opportunities from the green energy revolution must be the catchy stories of our times. They are not only personal but alluring.
For the moment, we need to rethink the global narrative on climate change. Rather than a doom’s day threat, let it be the opportunity to fire up the global economy.
UK’s AI plan
- AI ambassadors such as MIT economist Simon Johnson, Monzo cofounder Tom Blomfield and Google DeepMind’s Raia Hadsell
- £10bn AI growth zone in South Wales to create 5,000 jobs
- £100m of government support for startups building AI hardware products
- £250m to train new AI models
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Skoda Superb Specs
Engine: 2-litre TSI petrol
Power: 190hp
Torque: 320Nm
Price: From Dh147,000
Available: Now
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Syria squad
Goalkeepers: Ibrahim Alma, Mahmoud Al Youssef, Ahmad Madania.
Defenders: Ahmad Al Salih, Moayad Ajan, Jehad Al Baour, Omar Midani, Amro Jenyat, Hussein Jwayed, Nadim Sabagh, Abdul Malek Anezan.
Midfielders: Mahmoud Al Mawas, Mohammed Osman, Osama Omari, Tamer Haj Mohamad, Ahmad Ashkar, Youssef Kalfa, Zaher Midani, Khaled Al Mobayed, Fahd Youssef.
Forwards: Omar Khribin, Omar Al Somah, Mardik Mardikian.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
MATCH INFO
Uefa Champions League semi-finals, second leg:
Liverpool (0) v Barcelona (3), Tuesday, 11pm UAE
Game is on BeIN Sports
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Mobile phone packages comparison
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Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
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More on Quran memorisation:
UAE central contracts
Full time contracts
Rohan Mustafa, Ahmed Raza, Mohammed Usman, Chirag Suri, Mohammed Boota, Sultan Ahmed, Zahoor Khan, Junaid Siddique, Waheed Ahmed, Zawar Farid
Part time contracts
Aryan Lakra, Ansh Tandon, Karthik Meiyappan, Rahul Bhatia, Alishan Sharafu, CP Rizwaan, Basil Hameed, Matiullah, Fahad Nawaz, Sanchit Sharma
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Basquiat in Abu Dhabi
One of Basquiat’s paintings, the vibrant Cabra (1981–82), now hangs in Louvre Abu Dhabi temporarily, on loan from the Guggenheim Abu Dhabi.
The latter museum is not open physically, but has assembled a collection and puts together a series of events called Talking Art, such as this discussion, moderated by writer Chaedria LaBouvier.
It's something of a Basquiat season in Abu Dhabi at the moment. Last week, The Radiant Child, a documentary on Basquiat was shown at Manarat Al Saadiyat, and tonight (April 18) the Guggenheim Abu Dhabi is throwing the re-creation of a party tonight, of the legendary Canal Zone party thrown in 1979, which epitomised the collaborative scene of the time. It was at Canal Zone that Basquiat met prominent members of the art world and moved from unknown graffiti artist into someone in the spotlight.
“We’ve invited local resident arists, we’ll have spray cans at the ready,” says curator Maisa Al Qassemi of the Guggenheim Abu Dhabi.
Guggenheim Abu Dhabi's Canal Zone Remix is at Manarat Al Saadiyat, Thursday April 18, from 8pm. Free entry to all. Basquiat's Cabra is on view at Louvre Abu Dhabi until October
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White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
SANCTIONED
- Kirill Shamalov, Russia's youngest billionaire and previously married to Putin's daughter Katarina
- Petr Fradkov, head of recently sanctioned Promsvyazbank and son of former head of Russian Foreign Intelligence, the FSB.
- Denis Bortnikov, Deputy President of Russia's largest bank VTB. He is the son of Alexander Bortnikov, head of the FSB which was responsible for the poisoning of political activist Alexey Navalny in August 2020 with banned chemical agent novichok.
- Yury Slyusar, director of United Aircraft Corporation, a major aircraft manufacturer for the Russian military.
- Elena Aleksandrovna Georgieva, chair of the board of Novikombank, a state-owned defence conglomerate.
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
Water waste
In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.
Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.
A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.
The Emirates is the world’s third largest per capita water consumer after the US and Canada.
Desert Warrior
Starring: Anthony Mackie, Aiysha Hart, Ben Kingsley
Director: Rupert Wyatt
Rating: 3/5
From Zero
Artist: Linkin Park
Label: Warner Records
Number of tracks: 11
Rating: 4/5
MATCH INFO
What: Brazil v South Korea
When: Tonight, 5.30pm
Where: Mohamed bin Zayed Stadium, Abu Dhabi
Tickets: www.ticketmaster.ae
Timeline
2012-2015
The company offers payments/bribes to win key contracts in the Middle East
May 2017
The UK SFO officially opens investigation into Petrofac’s use of agents, corruption, and potential bribery to secure contracts
September 2021
Petrofac pleads guilty to seven counts of failing to prevent bribery under the UK Bribery Act
October 2021
Court fines Petrofac £77 million for bribery. Former executive receives a two-year suspended sentence
December 2024
Petrofac enters into comprehensive restructuring to strengthen the financial position of the group
May 2025
The High Court of England and Wales approves the company’s restructuring plan
July 2025
The Court of Appeal issues a judgment challenging parts of the restructuring plan
August 2025
Petrofac issues a business update to execute the restructuring and confirms it will appeal the Court of Appeal decision
October 2025
Petrofac loses a major TenneT offshore wind contract worth €13 billion. Holding company files for administration in the UK. Petrofac delisted from the London Stock Exchange
November 2025
180 Petrofac employees laid off in the UAE
Full Party in the Park line-up
2pm – Andreah
3pm – Supernovas
4.30pm – The Boxtones
5.30pm – Lighthouse Family
7pm – Step On DJs
8pm – Richard Ashcroft
9.30pm – Chris Wright
10pm – Fatboy Slim
11pm – Hollaphonic
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
