Earlier this week, President Xi Jinping made a major climate announcement during his speech to the United Nations General Assembly, declaring that China will “step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad.” The announcement, which has attracted heavy attention both domestically and internationally, came almost exactly one year after he announced China’s landmark 2060 neutrality pledge. This week’s announcement is widely seen as a major climate win, one which will significantly boost global momentum for moving away from coal.

President Xi’s language around halting overseas coal was short—just 10 characters: “不再新建境外煤电项目.” The language leaves many questions open, particularly around what precisely “build” means. Our interpretation is that the use of “build” here is broad, covering both physical construction as well as public financing. With such a simple statement, President Xi sent a clear political signal both domestically and internationally that eliminating China’s overseas coal footprint is one of his top priorities. Within China, the announcement gives coal power equipment manufacturers and exporters, project construction and operation contractors, and investors a clear political and policy signal: new overseas coal power projects shall stop immediately, and it is time to transition exports, markets, and investments towards green and low-carbon energies. Abroad, with China, South Korea, and Japan all having announced similar moratoriums this year, the announcement opens the door to a potential major G20 agreement on banning overseas coal power finance.

Energy Foundation China has been working towards this outcome for years. In early 2018, halting all new overseas coal-fired power plant development by Chinese institutions was one of the earliest goals we established for our Belt and Road Initiative (BRI) Task Force. We have pursued this goal with numerous partners and through multiple policy platforms; for example, we have repeatedly recommended to top leaders through the China Council for International Cooperation on Environment and Development (CCICED), the Ministry of Ecology and Environment’s (MEE) Belt and Road Green Coalition (BRIGC), the National Development and Reform Commission’s (NDRC) Center for BRI Cooperation, and others that China stop all overseas investments in coal power projects. To bolster our argument, we have funded multiple research reports and dialogues on both the risks associated with overseas coal investments as well as arguments for BRI green development, and shared relevant results and recommendations with top leaders at MEE, NDRC, China Banking and Insurance Regulatory Commission (CBIRC), People’s Bank of China (PBOC), Ministry of Commerce (MOFCOM), local governments, financial institutions, industry associations, and state-owned enterprises (SOEs).

President Xi’s pledge this week is another significant milestone in China’s climate action. We are grateful for your support, and will continue our efforts to support ambitious energy transitions and decarbonization pathways for China and the world, including through multilateral/plurilateral/bilateral cooperation and policy studies to phase out coal in China and abroad.