The economic literacy among the Chinese high school students III.

Authors:  Wu Xintian, Wang Yanglitao and Lu Tongzhong

In today’s society, humanity is at a turning point in the context of the Fourth Industrial Revolution and the transformation of new technologies and production models. We desperately need a great society in order to progress sustainably in the future, and to bring forward the best way to turn our civilization to a greater position and even on a global civilization. Taking China as an example, the country has now surpassed the global level in technological growth and is fast-developing country. What is more, now we are also at the turning point of making our way to the future civilization for both China and the global world. It is essential to analyze the current situation for both China and the whole world towards future civilization. In this article we combined the book The Future of Humanity: Global Civilization and China’s Rejuvenation by Professor Jin Zhouying with relevant data, news reports, and literature. Through the study, we found the current literacy level of high school students, about the economy and the Fourth Industrial Revolution, in order to infer the future role of this group in promoting China’s sustainable development, the Fourth Industrial Revolution, and the future global civilization.

Chapter 5: China’s progress and challenges

China is a country with a long history, and the traditional Chinese culture, represented by Confucianism and Taoism, contains early thoughts on the relationship between human beings and nature, which is the source of contemporary green economic thinking.

To begin with, the concept of “unity of man and nature” is central to the Confucian thought theory. It is a philosophy that man is an indispensable part of nature, that represents the mutual unity between man and nature, and takes the harmonious development of man and nature as the highest ethical value goal, not advocating that man is the dominant force in nature, but also not advocating that man becomes the slave of nature, but that they should live together in peace as friends.

Lao Tzu depicts the ideal human nature and society in the Tao Te Ching, where individuals live in harmony with one another, society, and the state. The whole community encourages virtue and adheres to a superior state of mind, extolling the selfless nature of ‘one for all and all for one’, and as a result, the entire society is stable and people are in harmony. To establish this happy and ideal utopia, the general level of civic thought and moral values must be significantly raised, and when human society has developed to a high level of consensus on the ideal way of life, the existence of the state will be unnecessary, so we can begin to pursue a greater civilization – a global civilization.

On the road to realize the transformation of civilization, given that countries are in different stages of the industrialization process and their different historical and cultural backgrounds, all countries have problems that need to be solved by themselves. China is embarking on the long march to realize the great rejuvenation of the Chinese nation. The 18th National Congress of the Party of China planned a roadmap and timetable for this long march: by the 100th anniversary of the founding of the Communist Party of China (2021) a moderately prosperous society will be built; by the 100th anniversary of the founding of New China (2049), a prosperous, democratic, and a civilized and harmonious socialist modern country. The steps to achieve “global civilization”, “great civilization” and “sustainable development” are also the indispensable parts for that two major goals for China now. On the one hand, the establishment of a social system based on global civilization is the goal and principle of future reforms. On the other hand, China’s comprehensive deepening reform goals and contents are integrated into the way to sustainable development—developing the economy and promoting social progress. We should choose the system and governance model that adapts to sustainable development (reflecting Chinese characteristics), the development and recycling of resources, environmental protection and construction, innovative country construction, and the practice of building a soft and hard environment that advances with the times to promote the transformation of civilization and to build a Chinese road towards global civilization.

For sustainable development, we can check the progress in renewable energy that China made recently. With the preliminary data of the Chinese electricity system 2019 being available at China Energy Portal, we shed some light on the ongoing changes in China’s energy system transformation. The share of thermal generation (more than 90 percent of which is coal) fell to below 70 percent the first time as graph 1 shows. China’s electricity generation grew by 330 TWh during last year. This corresponds to more than half of the entire German electricity generation during 2019. The power plant fleet of China generated 7,325 TWh last year: more than twice the entire European generation. The graph also illustrates that almost one quarter of the electricity generation was renewable energy in 2019.

As we all know that the development of renewable energy plays the most important role in in sustainable economy. Out of the 330 TWh new generation 120 TWh came from thermal power plants, primarily coal, while renewables including hydro added almost 160 TWh. The remaining increase was provided by seven new nuclear plants that went fully online in China last year. This progress strongly supports China’s way to sustainable economy.

Graph 1: Electricity generation proportion in China in 2019

Data source:

Graph 2China’s spend on R&D

Chart of the Day: Another Record Year for China R&D Spending - Caixin Global

Data source: National Bureau of Statistics

For technological innovation, the fourth industry, and related R&D projects. China’s investment in R&D has also continued to increase. From the graph 2 above we can see that take 2017 as an example, China spent 1.76 trillion yuan ($254 billion) on research and development in 2017, a year-on-year increase of 12.3%, according to the National Bureau of Statistics (link in Chinese). China’s R&D spending has increased rapidly over the last decade or so as the country has tried to gain a competitive edge in emerging industries.

Sustainable development—Renewable energy:

Under the influence of climate and environmental pressures, advances in scientific and technological strength, and the initial development and innovative thinking of the Fourth Industrial Revolution, renewable energy is the core of today’s technological breakthroughs and social development. The scale of renewable energy development is growing rapidly globally. The graph 3 below illustrates that since 2020, the development of the global renewable energy industry has been accelerating and. The graph clearly shows that most of the world’s renewable energy today is hydropower, but the role of wind farms has grown rapidly in the last decade and the share of biomass power plants is also rising

Graph 3: Total installed capacity of different renewable energy systems globally

Data source: IEA, International Energy Agency

It is estimated that over the next three decades, two-thirds of global energy will come from renewable sources, so it can be said that the energy revolution has begun. In other words, in the previous industrial revolutions, original fossil energy was the main fuel, while in the 4th industrial, renewable energy will be the main fuel and the energy revolution itself is also a part of the 4th industrial revolution in the new era.

Graph 4Leading countries in installed renewable energy capacity worldwide in 2020

Data source: Statista 2021

China consumes 24% of global energy consumption and is the country with the most energy consumption in the world. At the same time, China’s installed renewable energy capacity is also the country with the largest proportion in the world with 895 gigawatts installed renewable energy capacity. China has taken substantial steps in the development of renewable energy. In 2020, China’s total installed renewable energy power generation capacity (mainly for hydropower, wind power, solar photovoltaic power and biomass power). According to the National Energy Administration of China,in the first quarter of 2021, China’s infrastructure construction added 23.51 million kilowatts of installed power generation capacity, which is larger than the total installed capacity of the Three Gorges Power Station of 22.5 million kilowatts, and 9.96 million kilowatts more than the same period last year. Among them, hydropower is 1.09 million kilowatts, thermal power is 10.6 million kilowatts, nuclear power is 1.15 million kilowatts, wind power is 5.26 million kilowatts, and solar power is 5.33 million kilowatts. The newly installed capacity of renewable energy power generation accounted for more than 50%, and the installed capacity of power generation continued the trend of green development.

How to better encounter other upcoming challenges?

China has taken a solid step in the development of renewable energy, but the challenges it faces are severe. First take the wind power and solar photovoltaic cell industries as examples. Although the wind power industry is growing rapidly and the cumulative installed capacity of wind power ranks first in the world which we can see from graph 4, plenty of wind power has not been rationally utilized. According to data from the National Energy Administration of China, generally the curtailment rate[1] of wind power has been estimated at this 11-17%, which caused the direct economic loss exceeded 18 billion yuan. The severity of wind curtailment in China is staggering when compared to other RE development leaders such as Germany, which usually has a curtailment rate of below 1%. The main reason for the idle wind power is the power market mechanism, the lack of coordination between the construction of power grids and the construction of power generation enterprises is also one of the reasons.

Secondly, China has become a major manufacturing country in the photovoltaic industry, and the situation where the market and raw materials are completely dependent on foreign countries has improved. Especially for solar polysilicon companies, more than 60% of raw materials rely on domestic supply. However, due to the continued decline in orders in the European and American markets, the renewable energy surplus situation has not been completely resolved. Since 2012, due to policy support, domestic photovoltaic power generation has developed rapidly. However, the entire industry is still facing an unhealthy situation with high curtailment rate and unsound production-demand connection.

The feasible measures for better utilize the renewable energy:

  • Strengthen the education of renewable energy-related industries, increase investment in related R&D, and achieve necessary technological breakthroughs.
  • Make full use of domestic and foreign markets and resources to form a reliable, safe and stable supply channel. First, China should actively integrate into the global energy industry chain and improve the renewable energy market. Ensure the seamless connection between raw materials, processing plants and the market for renewable energy projects. We should reduce or even eliminate the overcapacity (energy surplus) of renewable energy. Establish a renewable energy transportation network, such as solar power transportation, to ensure that power generation areas with sufficient power are transported to cities or industrial areas with large energy needs. We should seize the major opportunities of the “Belt and Road” construction to fully integrate the strategic interests of China’s energy cooperation with the economic development of resource countries and the needs of improving people’s livelihood, give full play to capital advantages, promote resource development, and actively participate in global energy governance.
  • Improving the relevant legal system, establishing a systematic incentive and restraint system, and providing institutional guarantees for the renewable energy industry and the green economy should be also a part of the strategy.
  • Guide the whole society to form an atmosphere that advocates green development. The energy consumption of China’s building operation accounts for about 30% of the total energy consumption of the whole society, indicating that in addition to technical energy saving, behavioral energy saving, that is, the education and cultural literacy of users is also extremely important.
  • Focusing on the development of advantageous renewable energy industries, China has advantages in hydropower resources, technological capabilities, and investment capabilities, and the development of hydropower should be given priority. According to the energy consumption structure data of major countries in the world in 2017, China’s hydropower accounted for 8.3% of the total energy structure in 2017, which was higher than the 6.9% share of major countries in the world.

At present, China is encountering some difficulties on the way to building a great civilization. The first difficulty is how to build China into an innovative country.

To solve this problem first of all, we need to change the concept and emancipate the mind. We should understand ourselves correctly. Although China has the second-largest economy in the world and leads the world in individual fields of science and technology, we should not take the achievements in individual fields as our entire technological level. The emancipation of the mind is conducive to the deep-seated excavation of innovation potential.

In order to better overcome this difficulty, we should also strengthen the soft environment of enterprises. We need to create a relaxed environment within enterprises to encourage innovation and tolerate failure, and we can also establish incentive mechanisms to encourage innovation. Future research and basic research should also be strengthened. Many of our industries lack core technology, in key components such as chips, to rely on multinational companies. To solve this problem, future research and basic research must be strengthened to provide strong knowledge and theoretical support for technological innovation in order to continuously improve the ability of independent innovation. Although it is difficult to bring revenue to enterprises in the short term, it can bring long-term competitive advantage to enterprises. Finally, we need to reform the education system. A very famous question about China’s education is “Qian Xuesen’s question”: Why do our schools always fail to produce outstanding talents? In Jin Zhouying’s book, he writes about the need for interdisciplinary education, combining technical skills, humanism, and art education to foster innovation. We should build an education system that combines basic education, higher education, vocational education, and lifelong education. It is necessary to cultivate entrepreneurs with bold business spirit, courage, and good at pioneering and innovating.

The second difficulty is how to repair, build and protect the ecological environment. In the three hundred years since the industrial revolution, the ecological balance of the earth has been seriously damaged. China’s reform and opening-up has brought about continuous high economic growth but also damage to the environment: air pollution, water pollution, species decline, etc. In order to reverse this trend, China is trying a number of measures, from changing its development and consumption patterns, raising public and social awareness to protect the environment and address climate change, to institutional guarantees such as laws and policies. In terms of CO2 emissions, Xi Jinping (2020) stated at the UN General Assembly in September 2020 that China will increase its autonomous national contribution, adopt more favorable policies and measures, strive to peak CO2 emissions by 2030, and strive to achieve carbon neutrality by 2060. China is committed to capping its carbon emissions by 2030, and the cost of the energy efficiency initiatives needed to achieve this commitment is enormous. Credit Suisse estimates that these measures affect a quarter of China’s steel production, 13 % of cement production and 3 % of industrial output.

The third difficulty lies in the transformation of the social development model. The main problems of China’s current social development are: 1, the widening income gap. 2, the obvious property distribution gap. 3, the existence of discriminatory factors in employment and labor compensation. 4, the unequal distribution of educational opportunities and educational resources. 5, the unequal distribution of public health resources and health. 6, the unequal power of social security. 7, the widening gap between urban and rural areas and between regions. Therefore, how to solve the problems of the income distribution, health care, education and other issues of greatest concern to the public and promote social equity is the primary issue to be solved for China to promote social progress and establish a harmonious society. To solve these problems, China must adhere to economic development. Because a higher level of economic development can bring better material conditions to help increase the happiness of citizens. Therefore, it is necessary to continuously improve the material living standard of society. In addition to this, social industries should be developed. While promoting economic development through the development of industries in the traditional sense, it is necessary to actively develop social resources, create social capital and expand social markets. Finally, the income distribution system should be improved and a fair social security mechanism should be established.

[1] Wind curtailment refers to the situation where the output of wind plants is reduced to a level below its maximum generation capacity. Wind curtailment is a particularly acute challenge to wind energy integration in China.

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