Washington Can’t Sell Beijing on Climate Diplomacy

Welcome to Foreign Policy’s China Brief.

The highlights this week: U.S. Treasury Secretary Janet Yellen calls for climate cooperation during a visit to Beijing, U.S. think tank figure Gal Luft is indicted for acting as an unregistered foreign agent of China, and a map in the new Barbie film stirs controversy for supposedly bending to Beijing.

U.S. Treasury Secretary Janet Yellen’s China trip last week came as part of the Biden administration’s salvo of high-level visits aimed at an indifferent Beijing. Yellen’s dinner with six Chinese economists, all women, received plenty of publicity—and some predictable misogyny (neither promoted nor censored by the Chinese authorities). But one of her main talking points was a perennial one: the need to cooperate on climate change.

The climate crisis is on many people’s minds in China. This year, record global temperatures have hit the country hard, with brutal heatwaves in the north, including in Beijing, and floods yet again hammering the south, as scientists warn of more to come. The sheer range of China’s geography renders various natural disasters almost inevitable, but their frequency has increased in recent years.

One uniquely Chinese barrier to climate adaptation is the country’s rigidly mapped heating system. In the 1950s, China imitated Soviet-style district heating, whereby heat is generated in a central location and then distributed to individual buildings. But the leadership decided that only China’s northern, colder half would have heating installed, leaving hundreds of millions below the Qin-Huai line vulnerable to sudden cold in the south. Although there have been many calls to fix the system, it would be costly.

Fortunately, there is no such divide when it comes to air conditioning, which was left to the market instead of the state. In the 2000s, Chinese households rushed to embrace the technology, and now about 60 percent of homes have cooling. (In both India—much hotter than China—and the United Kingdom—much richer—that figure is around 5 percent.) Air conditioning is also responsible for around 10 percent of China’s annual electricity usage, straining overburdened power systems.

But when it comes to climate action, the Chinese government is in a bind. It acknowledges the reality of climate change, but it is keen to push the responsibility of addressing it and reducing emissions onto the biggest historical polluters.

In fact, China is the world’s biggest emitter of greenhouse gases by a very large margin, exceeding all developed countries put together. The historical emissions argument is starting to wear thin, especially since it is now the second-largest cumulative emitter, though still far behind the United States. Chinese diplomats argue, fairly, that the country’s per-capita emissions remain well below those of some Western countries. But while overall U.S. emissions peaked in 2007, China’s numbers continue to climb.

China has invested in the renewable energy transition, with considerable success in fields such as electric vehicles and solar panels. That only goes so far, and Chinese leaders are no more willing to ask the public to cut back to reduce emissions than those in the United States. As a result, climate cooperation—which U.S. diplomats once pinned their hopes on as a building block of better relations, and which the Biden administration continues to push—has largely proved to be a flop.

Americans wouldn’t embrace reduced consumption just because the Chinese agreed to it, or vice versa. The United States already broke climate promises during the Trump administration, and China has no reason to think it won’t happen again. China’s actual climate diplomacy is focused on nuclear energy sales and other clean technology, not mutual limits. And Yellen’s messaging seems in part aimed at showing the developing world that Washington is sincere about looking after its interests.

It’s true that China has more power to directly control its economy than the United States does. Nor is there a political party in Beijing made up of committed climate deniers, although they have an online presence. The country’s biggest emitters are state-owned companies, such as PetroChina. But while they must bow to Chinese Communist Party (CCP) leadership, they are also major lobbyists in a constrained political environment and have struggled with the lofty goals set by Chinese President Xi Jinping.

Another problem facing China is its weak economy. In many countries, a manufacturing slowdown would be good news for the planet; but in China, local governments tend to weaken environmental regulation when they need to boost GDP figures. Yellen might find more traction by trying to help with China’s economic recovery rather than by pushing the distant prospect of climate cooperation. But it seems that the idea of giving the Chinese economy a helping hand is a political impossibility in Washington right now.

Agents of influence. Gal Luft, the co-director of a U.S.-based think tank, was indicted on Monday for acting as an unregistered foreign agent for China, as well as for arms dealing and lying to federal officials. The indictment accuses Luft of attempting to recruit a former senior U.S. government official in 2016 on behalf of individuals based in China. Luft was arrested in Cyprus in February but fled when released on bail; his whereabouts are currently unknown.

Since his initial arrest, Luft has claimed to be a whistleblower on the family of U.S. President Joe Biden. Once a relatively mainstream figure, he also swung toward strongly pro-China views in recent years.

Taking advantage of the former president’s transactional approach to geopolitics, China attempted to influence the Trump administration through several vectors, including Republican lobbyist Elliott Broidy and Fugees member Pras Michel. The Luft indictment raises serious questions about the vulnerabilities created by Washington’s revolving doors.

Barbie girl in a Beijing world? Republican Rep. Mike Gallagher, the head of the congressional select committee on the CCP, this week accused the upcoming Barbie movie of pandering to Chinese censors. Gallagher took his lead from Vietnam, which banned the movie for supposedly depicting the nine-dash line, which marks China’s controversial claims in the South China Sea, on a map.

Hollywood has certainly bent to Chinese sensibilities in the past, and Beijing’s cartographical sensibilities run high, with authorities censoring content that shows supposedly incorrect maps. But from the available images of the Barbie movie, it seems like a simple mistake: Unless the nine-dash line has also moved to the Sea of Japan or Iceland, Vietnam’s censors mistook a trailing line showing the doll’s magical journey for a Chinese maritime claim.

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Credit hunt. China is in the midst of tackling one of the classic problems of a large autocracy— unreliable data—as it seeks to work out exactly how indebted local governments are. Although it seems no one knows the exact figures, the situation looks bad from the numbers that are available. A Rhodium Group analysis found that about half of Chinese cities are having trouble servicing their debt after the zero-COVID policy ravaged local finances.

Chinese economists have fretted about local debt for nearly two decades, but it may have now reached a crisis point. The central government investigation creates a dilemma for local governments. Do they play down their debt or come clean? If Beijing is planning a serious stimulus package, a larger debt burden could mean a bigger bailout. But if austerity is on the agenda, local governments won’t want to admit to a lack of fiscal prudence.

Property quagmire. China’s government is still trying to prop up the property market, but the situation is starting to resemble Weekend at Bernie’s. Economists predict that China’s real estate problems will last for years; after a few months of modest growth that followed the end of zero-COVID, June’s property sales figures looked dire. The slump is already affecting industries propped up China’s boom years; global digger sales, for example, have fallen sharply.

There may be other knock-on effects for U.S. firms. Many U.S. financial professionals bought into Chinese property in the late 2010s when it promised large (if risky) returns, and they’re now trying to sell those shares to naive U.S. institutional investors, including large pension funds. For now, the anti-Beijing mood in Washington has largely stymied those efforts, with big investors unwilling to be perceived as propping up China.