[JCA] China’s Climate Policy: Transition, Governance, and Market
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Source: Journal of Contemporary Asia | Published: 2026-09-19
Category: 아시아 정치경제 | Keywords: china, governance, policy, transition
China's climate policy has moved from the periphery of global environmental governance to its very center, and understanding how Beijing manages the triad of economic transition, institutional governance, and market mechanisms has become indispensable for anyone tracking the future of global decarbonization. As the world's largest emitter and largest manufacturer of renewable energy technology simultaneously, China occupies a uniquely contradictory position: it is both the country whose domestic choices will most determine whether the Paris Agreement's temperature targets remain achievable, and the country whose clean-energy exports are reshaping industrial policy debates from Brussels to Jakarta. Against this backdrop, a study appearing in the Journal of Contemporary Asia examining China's climate policy through the interlocking lenses of transition, governance, and market offers a timely contribution to a field that too often treats these three dimensions in isolation—analyzing carbon markets as technical instruments, governance as an administrative footnote, and energy transition as a purely engineering problem, rather than as parts of a single evolving political economy.
The analytical value of situating China's climate policy at the intersection of transition, governance, and market lies in how it forces attention to the frictions between central mandates and local implementation, between state planning and market signals, and between domestic industrial strategy and international climate commitments. China's approach to decarbonization has never been a simple linear progression toward liberalized carbon pricing; instead, it reflects a distinctly state-guided model in which the national emissions trading scheme, provincial energy-intensity targets, and five-year plan cycles coexist with—and often constrain—the price signals that market mechanisms are theoretically meant to generate. Research in this vein typically highlights how China's governance architecture, characterized by fragmented authoritarianism and negotiated compliance between central ministries and provincial governments, shapes the pace and unevenness of the energy transition far more than any single top-down decree could. This matters because it complicates the common Western assumption that China's climate governance is monolithic; in practice, coal-dependent provinces, heavy-industry-reliant local economies, and renewable-rich regions each negotiate distinct bargains with Beijing, producing a transition that is simultaneously ambitious in aggregate targets and highly variegated in local execution.
Placed within the broader literature on Asian political economy, this line of inquiry connects to longstanding debates about the developmental state and its adaptation to environmental imperatives. Just as earlier scholarship examined how East Asian states like Japan and South Korea directed capital toward strategic industries through a blend of market incentives and administrative guidance, China's climate governance can be read as a twenty-first-century iteration of that model, now applied to solar manufacturing, battery supply chains, and grid infrastructure rather than steel or semiconductors. This reframing has significant implications for how the region's other economies calibrate their own climate and industrial strategies. Southeast Asian and South Asian governments increasingly view China not only as a source of climate finance and technology transfer through mechanisms like the Belt and Road Initiative's greener iterations, but also as a competitor whose subsidized clean-tech exports can undercut nascent domestic industries. The governance dimension is equally consequential for the global South more broadly, since many developing countries look to China's experience—rather than to Western liberal market models—as a template for how state capacity can be marshaled to accelerate energy transitions without waiting for carbon markets alone to deliver results.
For the ODA and development finance community, these dynamics carry direct policy relevance. Traditional donors calibrating their own climate finance and technical assistance programs must reckon with the reality that China's blended model of governance and market-building is increasingly the reference point for many recipient governments, particularly where state-owned enterprises and centralized planning already dominate the energy sector. This has implications for how multilateral development banks and bilateral agencies design conditionality around carbon pricing, given that China's own emissions trading system deliberately eschews the kind of stringent price floors and hard caps favored in European models, opting instead for intensity-based allocation that preserves growth flexibility. Understanding this design choice is essential for practitioners advising partner governments on carbon market architecture, since a one-size-fits-all transplantation of European Union Emissions Trading System principles is likely to misread the political economy realities that Chinese-style, and increasingly China-influenced, governance models represent. It also bears on debates within civil society organizations monitoring just transition outcomes, since the governance question—who bears the cost of phasing out coal jobs, and how compensation and retraining are structured—is handled very differently under China's state-mediated approach than under market-driven transitions elsewhere.
Looking ahead, researchers and practitioners alike would do well to treat China's climate policy not as a fixed endpoint but as an ongoing experiment whose governance innovations and market failures alike will continue to generate lessons exportable well beyond its borders. The coming years will likely see intensified scrutiny of whether China's emissions trading scheme can mature into a genuine price-discovery mechanism or will remain primarily an administrative tool for signaling intent, and whether the country's renewable overcapacity translates into durable global decarbonization gains or triggers protectionist backlash that fragments the very supply chains the transition depends upon. For scholars of comparative political economy, the enduring puzzle is whether China's blend of centralized governance and selectively liberalized markets constitutes a genuinely distinct developmental pathway or merely a transitional phase en route to more conventional market mechanisms. For policymakers and civil society actors across Asia and the wider developing world, the practical task is to draw selectively from China's institutional toolkit—its financing vehicles, its industrial coordination mechanisms, its provincial experimentation model—while remaining alert to the governance trade-offs, particularly around transparency, accountability, and local participation, that any adaptation of this model would need to address in different national contexts.