De-risking and decarbonising: a green tech partnership to reduce reliance on China
26 October 2023
4 Mapping the risks of over-concentrated supply chains Our analysis of the high reliance of the EU and the rest of the world on China for clean tech shows clearly why it is so difficult to reduce reliance on Chinese supply chains. [...] For example, in the summer of 2021, severe drought in Taiwan disrupted the delivery of 9 García-Herrero and Kaellenius (2023) present different scenarios for China’s energy demand and clean-tech production, with consequences for the rest of the world in terms of the ability to import the necessary amounts of renewables for decarbonisation. [...] This could lead to EU countries with limited industrial exposure to permanent magnets to object to the EU retaliating to these measures, and to argue for giving in to Beijing’s demands in the hope of sustaining other lines of trade and economic interests. [...] This type of partnership should focus on greater security of supply of green tech to cut emissions, with the key objective of aligning objectives in a way that each member has a clear sense of its role and the net gains from participating in the club. [...] Even if the intention was to expand the partnership from the G7 to a larger group, the choice of the G7 as founding members could put developed countries in a central role, with countries of the Global South remaining on the periphery as providers of critical raw materials and low wage manufacturing.