China has become one of the most significant global players ‒ both economically and politically. In just three decades, the country has managed to largely overcome rural poverty.
However, this impressive economic success comes at a high price; the pollution produced by the dynamic growth is creating enormous challenges – reaching far beyond China’s borders. While air pollution may often be limited to a particular region, China’s rising greenhouse gas emissions and the discharging of sewage and solid waste into rivers and the sea are of global significance. The negative environmental effects can be felt from as far away as Europe. Effective climate action can only succeed if China is involved. It is therefore important to work with China to develop a sustainable and environmentally friendly development trajectory.
Financial Cooperation (FC) with China focuses on environmental protection and climate change mitigation and uses German experience and financing to make important contributions to the protection of global public goods. FC with China is also in Germany’s own interest.
Since 2009, the German Federal Government has no longer provided any budget funds to the People’s Republic of China for development cooperation. The only loans issued are interest-bearing repayable loans from KfW’s own funds, known as promotional loans, and no German budget funds are added.
These loans finance investments in climate action, environmental protection and resource conservation projects – for example, nature conservation projects for reforestation and the protection of biodiversity. These investments meet the highest environmental and social compatibility standards. They also feature innovative elements, meaning that they set an example. Their impact can be felt beyond the immediate project, and they provide important momentum for making economic development in China more sustainable. A cleaner environment in China benefits us in Germany as well.