China Briefing 10 July 2025: New sector targets; Overcapacity dressing-down; Adaptation scorecard
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§ Key developments
New sector targets in renewable portfolio standard
NEW QUOTAS: China has published the 2025-2026 provincial quotas for renewable energy consumption, which for the first time included sectoral targets for iron and steel, cement, polysilicon and certain types of data centres, industry news outlet BJX News reported, as well as updates to the aluminium sector targets established last year. Bloomberg said that the steel, cement and polysilicon sectors will need to use low-carbon energy to “meet between 25% and 70% of their demand” under the policy. Energy news outlet International Energy Net noted that Sichuan, Yunnan and Qinghai provinces faced the “highest quotas”, at 70%. (For comparison, the average provincial quota is 38%, Carbon Brief calculated. A separate quota for these three provinces that does not include hydropower is much closer to the national average.)
POWER RUSH: In contrast to expectations that renewable installations in China would slow for the rest of 2025, the state-run thinktank State Grid Energy Research Institute estimated that 380 gigawatts (GW) of solar, 140GW of wind power and 120GW of thermal power (likely mostly coal) will be added this year, Bloomberg reported. It noted that the solar figure is “more than 50% higher than forecasts from the leading solar industrial group”. According to NEA data, the estimate implies China will add 182GW in solar, 94GW in wind and 102GW in thermal power between June and December.
MANAGING THE INCREASE: Li Chao, spokesperson for the National Development and Reform Commission (NDRC), told reporters that “large-scale xiaona (消纳) consumption of renewable energy is critical” given rapid capacity growth, according to industry outlet China Energy News, adding that consumption rates continue to exceed 90% – meaning no more than 10% of potential output is being wasted, according to government calculations. However, separate outlet China Energy Net reported that wind and solar utilisation rates (利用率) in some provinces fell below the government-set red line of 90%, due to rapid growth. Dr Muyi Yang, senior energy analyst for Asia at thinktank Ember, told Carbon Brief: “The recent dip in utilisation rates in the western regions is an early warning that [investment in the grid] needs to speed up.”
OPEN ARMS?: Coal power still has “room to grow” during the fifteenth five-year plan period (2026-2030) despite market challenges, China Electricity Council chief expert Chen Zongfa told BJX News. Chen said this was due to the changing “attitude of the government”, which “no longer demonises coal”. The influential State-owned Assets Supervision and Administration Commission of the State Council (SASAC) pledged to “speed up the construction of thermal power projects” and “ensure the safe and stable supply of coal”, according to China Energy News. Another China Energy News article quoted an NDRC official saying China needed to “ensure the stability of coal supply”. Meanwhile, in a visit to Shanxi, President Xi Jinping told local policymakers to transform the coal industry “from low-end to high-end” while also developing clean-energy, Xinhua said.
Floods and heatwaves
‘INTENSE’ RAINS: Several regions in China, including the southern Henan, Guizhou and Hubei provinces, were hit by “intense rainfall” throughout late June and early July, causing “severe flooding” and several deaths, Bloomberg reported, in an article noting that climate change is “fuelling” extreme weather events. Meanwhile, high temperatures “enveloped China’s eastern seaboard…raising fears of droughts and economic losses”, Reuters said, adding that “extreme heat, which meteorologists link to climate change, has emerged as a major challenge for Chinese policymakers”.
NEW WARNINGS: At the launch of the China Blue Book on Climate Change 2025 – a document outlining global and China-specific impacts of climate change – National Climate Center deputy director Xiao Chan stated that the “national average temperature in June was 21.1C”, marking the hottest June since records began, according to business news outlet 21st Century Business Herald. State news agency Xinhua quoted Chen Min, vice-minister of the Ministry of Water Resources, telling reporters that 329 rivers had flooded “above warning levels” as of 4 July. Meanwhile, the government established a new heat-health warning system, which “aims to strengthen public health preparedness amid growing climate challenges”, the state-run newspaper China Daily said.
GRID PRESSURES: Linked to high temperatures along the east coast, the National Energy Administration (NEA) revealed that China’s maximum power demand reached a “record high” of 1,465GW on 4 July, finance news outlet Yicai reported, adding that air-conditioning load “accounted for about 37%” of the peak power grid load in eastern China. Bloomberg said that the grid is “in better shape to take on peak summer demand this year”, following preparations to avoid previous blackouts.
Setting the tone on ‘overcapacity’
MIIT HAUL-UP: In a meeting with solar industry representatives, Ministry of Industry and Information Technology (MIIT) head Li Lecheng said MIIT “will further increase macro-guidance and governance of the industry” in the face of “low-price disorderly competition”, BJX News reported. The Hong Kong-based South China Morning Post (SCMP) noted that Li also said companies should be “guided” to phase out “outdated production capacity”. In its coverage, Bloomberg noted that it was “unclear” what impact the meeting would have, but that it “highlight[ed] the seriousness with which Beijing views” the issue.
CLEAR SIGNALS: The meeting followed days of signalling from China on the need to crack down on industrial overcapacity, which has been blamed for “flood[ing trading] partners’ markets with artificially low-cost goods”, according to the Financial Times. In late June, the front page of the party-affiliated newspaper People’s Daily carried an article under the byline Jin Sheping – used to signal the thoughts of party leadership on economic matters – stating that “rat race competition”, a term linked to overcapacity, would “destroy” industries such as solar, lithium-ion batteries and new-energy vehicles (NEVs). At an economic policy meeting, Xi said China must “govern low-price and disorderly competition…and promote the orderly withdrawal of outdated production capacity”, BJX News said. (He also noted the need to develop more “offshore wind power” and a “unified national market”.) On the same day, ideological journal Qiushi also published an article criticising “rat race competition”. Meanwhile, the Associated Press reported, China also “shows signs of tackling” similar overcapacity issues in the NEV industry.
EUROPE UNHAPPY: European policymakers appear unconvinced, however, with top EU diplomat Kaja Kallas telling her Chinese counterpart Wang Yi that China must “put an end to its distortive practices…which pose significant risks to European companies and endanger the reliability of global supply chains”, according to Reuters. It added that the remarks came during meetings aiming to “lay the groundwork for a summit between EU and Chinese leaders” set to take place on 24 July. Meanwhile, the EU is refusing to consider publishing a joint EU-China climate declaration at the leaders’ summit “unless China pledged greater efforts to cut its greenhouse gas emissions”, the Financial Times reported.
BRICS message on climate finance
MITIGATION FUND: The heads of the BRICS nations, a grouping of China and several other global south countries, “demand[ed] that wealthy nations fund mitigation of greenhouse gas emissions in poorer nations” at a leaders summit in early July, Reuters said. It added that, while Brazil “urged a global transition away from fossil fuels”, the resulting joint statement “argued that petroleum will continue to play an important role in the global energy mix, particularly in developing economies”. Reacting to the summit, the campaign group WWF said in a press release: “When it comes to climate, the message falls short.”
GLOBAL SOUTH VOICE: The Guardian noted that “Brazilian diplomats see the BRICS alliance as part of an emerging new world order”, noting that the summit featured “pushback against the EU” over “discriminatory protectionist measures under the pretext of environmental concerns”. Brazil also used the summit to ask “China and BRICS member states in the Middle East to be among the seed funders” for long-term financing for conservation, the newspaper said, adding that this did not seem to have been successful. The absence of Xi from the meeting, in a first at a BRICS leaders summit, sparked significant speculation around how valuable China saw the block as being.
§ Spotlight
Key takeaways from China’s latest climate adaptation progress report
China’s Ministry of Ecology and the Environment (MEE) recently published a report outlining China’s progress last year in adapting to climate change. In this issue, Carbon Brief outlines three key messages from the assessment.
Extreme weather events are becoming more severe
China’s climate was “relatively poor” (偏差) in 2024, the MEE report stated, with several “record-breaking or severely disastrous” extreme weather events.
These include extreme heat and cold, rainfall, typhoons, flooding and severe convective weather.
Weather events have generally worsened year-on-year, the report said. In 2024, China’s average temperature stood at 10.9C – the warmest since modern records began.
Similarly, national average rainfall totalled almost 698 millimetres, up 9% year-on-year. More typhoons made landfall in China in 2024 compared to 2023, of which several had “large disaster impacts”, according to the report.
It added that these events had “serious adverse” socio-economic impacts, noting that extreme weather led to at least 500 deaths or disappearances in 2024. (Statistics for deaths and disappearances were not included in the 2023 edition of the report.)
In 2024, the central government spent more than 2.5bn yuan ($350m) on “natural disaster relief funds”, covering flooding, drought and extreme cold.
Climate-resilient infrastructure still a main focus
Extreme weather is also increasingly damaging infrastructure, the report noted. For example, more than 29m users lost power due to extreme weather.
Much of the report is dedicated to describing China’s efforts to develop infrastructure that can resist or help mitigate the effects of extreme weather events.
Managing “water resources” and water conservation continued to receive a strong focus in the report, which added that, in 2024, “major water conservancy projects continued to be developed to a high quality”.
It also noted that this infrastructure buildout “played a key role” in mitigating the impact of floods in 2024, with thousands of reservoirs nationwide being used to store floodwater.
This, it said, “reduced” the impact of 26 floods on 2,300 cities and towns and 17m mu [slightly more than 1m hectares] of arable land”.
The country is also strengthening its ability to predict future extreme weather events, building more than 10,000 new monitoring and early-warning stations in 2024.
Cities are being encouraged to become more “climate resilient”, with 39 authorised to develop pilot programmes exploring possible solutions.
The report noted that, in 2024, 60 cities were developing “sponge city” projects, using nature-based solutions to absorb, collect or reuse floodwater.
Liu Junyan, project lead for the climate risk project at campaign group Greenpeace East Asia, told Carbon Brief that sponge-city solutions did seem to play a beneficial role during the deadly Henan floods in 2021, where floodwaters receded more quickly in Zhengzhou city than other areas.
“But sponge-city methods are not made to handle the extreme rainfall caused by climate change,” she added.
China’s response is relatively ‘holistic’, but disconnects remain
The MEE report emphasised that China’s overarching climate adaptation strategy covers a broad range of socio-economic impacts.
For example, it mentioned efforts in 2024 to prepare technical guidelines for assessing climate change impacts and risks. Carbon Brief understands that the aim of these efforts is to help provincial governments use more standardised, science-based assessments of climate risk, as well as how they should respond.
The report also noted efforts to develop climate-conscious behaviours, such as campaigns encouraging farmers to use “water-saving” irrigation technologies and guidelines to “enhance public awareness” of potential climate-related health risks.
Liu said China’s approach to adaptation is “holistic”, but added that it remains “top-down”, sometimes causing local needs to go unmet.
Furthermore, the report said China needs to further develop strategies for climate impacts on “urban and rural habitats” and “sensitive” industries such as finance, tourism and energy.
§ Watch, read, listen
HAWKS AND DOVES: The European Parliament broadcasted a debate on EU-China relations ahead of the upcoming leaders’ summit, in which European Commission president Ursula von der Leyen spoke on electric vehicles, rare earths and overcapacity.
DEFINING MOMENT: Shanghai-based news outlet the Paper interviewed former UN secretary-general Ban Ki-moon on China’s role in accelerating climate ambition this year.
CLIMATE PATH: Analysts at the Asia Society Policy Institute’s China climate hub spoke on Environment China about China’s latest emissions, clean-energy and climate diplomacy trends.
STUNTING GROWTH: The US-based National Public Radio explored how climate change is affecting China’s tea-growers, with crops “stunted” and farmers struggling with “changing rhythms”.
§ 6%
The electrification rate of China’s transport sector – well below the economy-wide figure of close to 30% – despite the rapid adoption of NEVs, Chen Ji, executive director at China International Capital Corporation, said at the China launch of the International Energy Agency’s World Energy Investment 2025 report, attended by Carbon Brief. Chen added that the low figure was due to the lack of progress in electrifying aviation and heavy-duty trucks.
§ New science
Increased socioeconomic impacts with future intensifying flash droughts in China
Geophysical Research Letters
A new paper found that “China will experience longer and more severe droughts, exposing 33% of the population and 35% of gross domestic product to risks under a medium-emission scenario”. The authors analysed economic and soil moisture data over 2000-22 to quantify past changes in “flash droughts”, using models to assess future changes under different climate scenarios. The paper found that “droughts are becoming more frequent in some areas, with a twofold increase in frequency in approximately 32% of these areas by the century’s end”. It added that wealthier regions will face greater economic losses due to flash droughts.
Communications Earth & Environment
Rice cultivation in China’s Sanjiang Plain has expanded northeast by more than two million hectares between 2000 and 2020, driving up irrigation demand by 6bn tonnes, according to a new study. The authors analysed data on “rice migration”, finding that rice expansion drove up irrigation by 122% over 2000-20, while an increase in rainfall due to climate change reduced irrigation demand by 22%. The authors said their findings “highlight the urgent need to make integrated strategies balancing crop migration [with] climate change and water resource conservation”.
Climate Change Research
The poorest counties in China are much more likely to experience record-breaking extreme weather events, which may push them “back to poverty”, according to new research published in a Chinese academic journal. The study combines more than twenty models with eight extreme weather indices to assess “patterns of extreme weather across 832 poverty-alleviated counties [as well as] other counties in China”. The authors recommend actions covering “water infrastructure; disaster mitigation; catastrophe insurance; and public awareness and education” to support climate adaptation in these areas.
China Briefing is compiled by Wanyuan Song and Anika Patel. It is edited by Wanyuan Song and Dr Simon Evans. Please send tips and feedback to [email protected]