Climate goals for officials + Textile sector + Alcohol industry

In this issue of MERICS China Industries Brief, we cover the following topics:

New State Council measures tie officials’ careers to climate goals
Textile sector exemplifies how China keeps lower-value industries inside the country
Beer, wine, and liquor: China is keen to keep spirits high
Higher launch prices could make Chinese innovative drugs more profitable
China aims for global leadership in hydrogen

1. New State Council measures tie officials’ careers to climate goals

At a glance: The State Council has released measures to evaluate progress on carbon reduction at the provincial level during the 15th Five-year Plan (2026-2030). A new accountability system ties the career prospects of top provincial party and state officials to carbon reduction. Key features include:

The introduction of five control indicators, e.g., total carbon emissions, carbon emission intensity and total coal consumption, plus nine supporting indicators, including green transportation (see exhibit 1)
Provinces that miss one control indicator or three supporting indicators in annual assessments must propose corrective actions within 30 days. Senior officials who fail to comply will face disciplinary interviews
Annual assessment results will be part of senior provincial officials’ performance reviews
Officials showing gross violations of duty will face disciplinary action from, for instance, the Central Commission for Discipline Inspection (the party-state’s main body for investigating corruption).

MERICS comment: China’s performance evaluation system for public officials contains complex and sometimes contradictory indicators. They include economic growth, innovation, social stability and security, public services provision, sustainable development, environmental protection and political loyalty. For decades, economic growth has been the most important benchmark, despite some regional variations over time. A 2025 meta-analysis of more than 60 studies found economic performance correlated mostly strongly with cadre promotion, while environmental performance had only secondary effects and the impact of social stability was negligible.

The State Council’s new measures may pressure local officials to pay more attention to environmental criteria. However, they might deliver less than they seem to promise. They do not impose strict, pre-defined blanket targets across regions. Instead, provincial leaders must draft annual action plans to be reviewed by the National Development and Reform Commission (NDRC). The provincial drafts will be assessed against national goals. One major goal was to cut carbon emissions intensity by 65 percent between 2005 and 2030. Carbon emissions intensity in 2020 was already 48 percent lower than in 2005, so China can probably hit the 2030 goal without significant extra efforts. The upshot is that provincial leaders are likely to keep on prioritizing economic indicators, unless they see punishments for their counterparts in other provinces linked to these new measures.

However, European companies may face tighter environmental rules in China. They would do well to monitor the provincial-level action plans and any regulations that result from them.

Article: Measures for the Comprehensive Evaluation and Assessment of Carbon Peaking and Carbon Neutrality (碳达峰碳中和综合评价考核办法) (Link)
Issuing body: State Council
Date: April 23, 2026

2. Textile sector exemplifies how China keeps lower-value industries inside the country

At a glance: The Ministry of Industry and Information Technology (MIIT) announced it would coordinate the development of geographic clusters in the textile industry to reinforce China’s competitiveness. Provincial authorities were invited to identify eligible textile and apparel clusters by the end of June 2026. After evaluation, the selected clusters can benefit from support measures which include:

Promotion of regional brands to strengthen the cluster’s competitive advantages and to support local skills and talent
Support to take part in exhibitions and other activities to match supply with demand, and support to expand market share
Training on digitalization, AI and green transformation

MERICS comment: The announcement is part of Beijing’s push to upgrade traditional industries, which features in the 15th Five-Year Plan. The leadership has pledged it will not “abandon traditional industries”, but will leverage “new productive forces” to upgrade them and build hyper-modern factories. There are similar measures in the 2026–2028 action plan on standards to upgrade the textile industry. The goal is that low-end sectors and value chains should stay within China, instead of moving to lower-wage economies as often happens when a country moves up the value chain. The MIIT’s plans for textiles are emblematic of the government’s vision for low-end industries in general. The economy cannot afford to lose jobs amidst pressure on employment. The plans also conform with a broader national security focus on keeping entire supply chains within China.