China has long been seen as a land of contrasts, and none more so in its epic adoption of green energy.
The country is moving from being one of the most polluted in the world to a global leader in the adoption of wind and solar power, along with electric vehicle use and a commitment to phase out fossil fuels.
In clean energy, China is now home to five of the world’s top six solar panel manufacturers and five of the top 10 wind turbine makers. It means that the country is now manufacturing enough 2m-by-1m sized solar panels to cover one and a half football pitches every hour. China now makes two wind turbines every hour, or almost 350 a week, installing 19,660 MW of capacity in 2017, higher than the 28-nation EU1.
In one week, China builds 1,900 electric buses for public use, which means that it places the equivalent of London’s entire bus fleet of 9,500 vehicles on its roads in just over a month. The country is also now the world’s largest manufacturer of electric cars, making 10,000 a week in 2018, or twice what is sold in the US.
Total spending on renewables amounted to USD 2.4 billion a week in 2017, with plans to raise this to USD 7 billion a week by 2020. Much of this is financed by green bonds; China issued USD 700 million worth a week in 2017, making it the second-largest green bond market in the world, after the US.
Turning China green is hugely important for combatting climate change. The country’s rapid growth averaging 6.5% or more a year for decades has come at the expense of vast environmental damage, leading to cities so polluted it was impossible to see from one side of the street to the other.
And despite the significant advances made in the use of renewables, China still remains reliant on coal-fired power production, providing 62% of its energy in 2016 after peaking in 2014. As coal has been gradually phased out, the growth of China’s emissions decelerated during the 12th Five Year Plan (2011-2015), plateaued during the 13th (2016-2020) and is seen falling during the 14th (2021-2025).
While this has seen a focus on installing renewable energy capacity on a colossal scale, natural gas has also become far more important in steering China away from more carbon-intensive coal. China’s domestic natural gas production has more than doubled over the past decade, and yet production still cannot keep pace with demand, making it more reliant on Liquified Natural Gas (LNG) imports.
“As China shies away from coal, the demand for natural gas will rise,” says Chris Berkouwer, Portfolio Manager with Robeco Global Stars Equities. “Within China’s energy mix, the share of gas is targeted to almost double from today’s level to 15% by 2030. While renewables are grabbing the headlines, it is crucial to have more gas in the energy mix as well if we are to transition to a low carbon economy.”
“European integrated energy majors are very well positioned to cater for that transition. We expect China to increasingly rely on LNG imports to cope with seasonal gas shortages and strong demand growth. European players have established strong relationships with major Chinese energy companies and signed long-term contracts to supply LNG over the next 20 years.”
1 The statistics for this article are drawn from:
The contents of this document have not been reviewed by the Securities and Futures Commission ("SFC") in Hong Kong. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. This document has been distributed by Robeco Hong Kong Limited (‘Robeco’). Robeco is regulated by the SFC in Hong Kong.
This document has been prepared on a confidential basis solely for the recipient and is for information purposes only. Any reproduction or distribution of this documentation, in whole or in part, or the disclosure of its contents, without the prior written consent of Robeco, is prohibited. By accepting this documentation, the recipient agrees to the foregoing
This document is intended to provide the reader with information on Robeco’s specific capabilities, but does not constitute a recommendation to buy or sell certain securities or investment products. Investment decisions should only be based on the relevant prospectus and on thorough financial, fiscal and legal advice. Please refer to the relevant offering documents for details including the risk factors before making any investment decisions.
The contents of this document are based upon sources of information believed to be reliable. This document is not intended for distribution to or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.
Investment Involves risks. Historical returns are provided for illustrative purposes only and do not necessarily reflect Robeco’s expectations for the future. The value of your investments may fluctuate. Past performance is no indication of current or future performance.
Please read this information carefully.
This website is prepared and issued by Robeco Hong Kong Limited ("Robeco"), which is a corporation licensed by the Securities and Futures Commission in Hong Kong to engage in Type 1 (dealing in securities); Type 4 (advising in securities) and Type 9 (asset management) regulated activities. This website has not been reviewed by the Securities and Futures Commission or any regulatory authority in Hong Kong.
2. Important risk disclosures
Robeco Capital Growth Funds (“the Funds”) are distinguished by their respective specific investment policies or any other specific features. Please read carefully for the risks of the Funds:
3. Local legal and sales restrictions
The information contained in the Website is being provided for information purposes.
Neither information nor any opinion expressed on the Website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. The information contained in the Website does not constitute investment advice or a recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. An investment in a Robeco product should only be made after reading the related legal documents such as management regulations, prospectuses, most recent annual and semi-annual reports, which can be all be obtained free of charge at www.robeco.com/hk/en and at the Robeco Hong Kong office.
4. Use of the Website
The information is based on certain assumptions, information and conditions applicable at a certain time and may be subject to change at any time without notice. Robeco aims to provide accurate, complete and up-to-date information, obtained from sources of information believed to be reliable. Persons accessing the Website are responsible for their choice and use of the information.
5. Investment performance
No assurance can be given that the investment objective of any investment products will be achieved. No representation or promise as to the performance of any investment products or the return on an investment is made. The value of your investments may fluctuate. The value of the assets of Robeco investment products may also fluctuate as a result of the investment policy and/or the developments on the financial markets. Results obtained in the past are no guarantee for the future. Past performance, projection, or forecast included in this Website should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Fund performance figures are based on the month-end trading prices and are calculated on a total return basis with dividends reinvested. Return figures versus the benchmark show the investment management result before management and/or performance fees; the fund returns are with dividends reinvested and based on net asset values with prices and exchange rates of the valuation moment of the benchmark.
Investments involve risks. Past performance is not a guide to future performance. Potential investors should read the terms and conditions contained in the relevant offering documents and in particular the investment policies and the risk factors before any investment decision is made. Investors should ensure they fully understand the risks associated with the fund and should also consider their own investment objective and risk tolerance level. Investors are reminded that the value and income (if any) from shares of the fund may be volatile and could change substantially within a short period of time, and investors may not get back the amount they have invested in the fund. If in doubt, please seek independent financial and professional advice.
6. Third party websites
Following links to any other off-site pages or websites of third parties shall be at the own risk of the person following such link. Robeco has not reviewed any of the websites linked to or referred to by the Website and does not endorse or accept any responsibility for their content nor the products, services or other items offered through them. Robeco shall have no liability for any losses or damages arising from the use of or reliance on the information contained on websites of third parties, including, without limitation, any loss of profit or any other direct or indirect damage.
7. Limitation of liability
Robeco as well as (possible) other suppliers of information to the Website accept no responsibility for the contents of the Website or the information or recommendations contained herein, which moreover may be changed without notice.
Robeco assumes no responsibility for ensuring, and makes no warranty, that the functioning of the Website will be uninterrupted or error-free. Robeco assumes no responsibility for the consequences of e-mail messages regarding a Robeco (transaction) service, which either cannot be received or sent, are damaged, received or sent incorrectly, or not received or sent on time.
Neither will Robeco be liable for any loss or damage that may result from access to and use of the Website.
8. Intellectual property
All copyrights, patents, intellectual and other property, and licenses regarding the information on the Website are held and obtained by Robeco. These rights will not be passed to persons accessing this information.
10. Applicable law
The Website shall be governed by and construed in accordance with the laws of Hong Kong. All disputes arising out of or in connection with the Website shall be submitted to the exclusive jurisdiction of the courts of Hong Kong.