The Role of Business in Driving and Shaping Renewable Energy Policies in China

Abstract

This report investigates the role of business actors in shaping China’s renewable energy policy process and governance. It finds that with the tremendous growth of renewable industry over the past two decades, a new government–business coalition is taking shape in China. Business actors such as the manufacturers of wind turbine or solar PV and investors in renewable energy projects play a key role in this coalition. The coalition has been exerting notable influence successfully at both the policymaking and policy implementation stages to advance its strategic preference for the continuous expansion of renewable industries, mainly by accommodating conflicts or scepticism from actors outside the coalition and integrating other major social actors’ interests both at national and local level, namely the grid companies and local state officers. Consequently, its influence has generated profound impact on the speed, scale and quality of China’s renewable energy development. The study reveals a rather different political economy of China’s policymaking process in the climate governance domain, compared to a traditional description of ‘top-down’ or ‘command-and-control’ mode of governance where Chinese central government is often believed to be the only crucial actor to steer climate-related policy. Rather, it is argued in this report that central government’s autonomy in the policy process is largely constrained by the rising business interest groups who possess considerable material and institutional power to change policy orientation.