China and the Political Economy of the Green State
Authors:   , Larsen Mathias Lund 
Published: February 2024

The climate crisis requires a radical transformation of our economies. Current and past minimal-state and market-based approaches have failed to deliver adequate progress. From that, a consensus is emerging: An interventionist state with green ambitions is needed to steer a green transition. Such a ‘green state’ is an approach that any country, in principle, can take irrespective of national political and economic conditions. Debate has been prolific on how this green state can be operationalized: What are the political prerequisites? What are the challenges standing in the way? Which policy tools can be used? Problematically, while the climate crisis is global, this debate has centered on the global North. I use state capacity and historical institutionalism to investigate what China tells us about green state theory. Through state capacity, I consider environmental sustainability as the latest iteration of a goal that requires a capable state. Through historical institutionalism, I emphasize the role of differing national conditions within informal and formal institutions across political, economic, social, and historical aspects. From that theoretical outset, the thesis is focused on the conditions under which states have capacity as green states in terms of ability to intervene in the economy and uphold green priorities. My intention in this PhD project is to contribute towards the realization of green states. I share the normative goal of a green state and hope to contribute to developing theory that can be used in the pursuit of green states. Informed by the case of China, I analyze how China’s political economy conditions determine its green state capacity and scrutinize whether current green state theory can account for this. I do so by answering the following research question: What does China tell us about green state theory? I apply an explorative research strategy, relying on extensive fieldwork to investigate and theorize on the green state’s intended universal applicability. I use a case-based research design considering China a critical case as it may be the country in the world most resembling a green state. Primary data were collected through 132 semi-structured interviews along with participant observations across China, Vietnam, India, Ethiopia, and Brazil. Secondary data includes policy documents and financial databases. All data were collected in both English and Chinese to expand the scope, address biases, and triangulate potentially contradicting sources. Answering my research question, I find that China’s case tells us the following: Green states can exist under a greater variety of political economy conditions than the theory currently assumes. This conclusion is based on three parts: First, China has a high capacity as a green state through its authoritarian politics, state-driven economic model, and party-state interventions, while this capacity remains challenged by intra-state resistance and from squeezing out the private sector. These conditions and challenges contradict current assumptions in green state theory. Second, from that finding, I argue that a plurality of green states can exist across the world. I conclude that green state theory does not provide a blueprint that fits all countries, but that a green state approach can be adopted differently depending on a given country’s unique political economy conditions. Third, I find that green state theory would benefit from drawing on comparative political economy and historical intuitionalism to better capture the relation between varying political economy conditions and green state practices. Concretely, I make the following findings in each of the five papers of this thesis: Paper 1 conceptually discusses key dimensions of the current green state, concluding that conditions for green state capacity exist beyond democratic and developed countries. Paper 2 analyzes China’s application of a green state approach, concluding that China’s green state capacity is threatened by its authoritarian politics, resistance from local government and SOEs, and from squeezing out the private sector. Paper 3 explores the connection between financialization and the green state, concluding that financialization of governance in China provides the conditions for the state to be capable of green investing. Paper 4 assesses the global ramifications of China’s green state approach, concluding that China’s impact includes both the provision of price-competitive green technologies and the reinforcement of a de-risking international finance approach. Paper 5 investigates how China influences other countries’ green finance practices, concluding that due to China’s political economy model, successful lessons diffuse into global policy norms. Looking forward, as China is not representative of the global South’s diversity of political economy conditions, the findings of this thesis open an avenue for development of a comparative political economy of the green state. Ultimately, green state theory should account for the relationship between political economy conditions and state capacity to carry out green transition – both in the global North and South. This thesis provides an important step toward developing a research agenda in pursuit of that goal.