China’s growing exposure to climate hazards underscores the urgent need for investment in adaptation to safeguard sustainable economic growth. As the world’s second-largest economy and the largest developing country, China faces overlapping climate risks that threaten public health, infrastructure, key industries, and its long-term prosperity. In 2024 alone, natural disasters caused approximately USD 58 billion in direct economic losses, highlighting the economic and social stakes of insufficient adaptation action. While China has achieved significant mitigation progress—accounting for 37% of global mitigation finance in 2023—adaptation finance remains comparatively low, representing only 10% of flows. This gap presents an opportunity to translate China’s robust national strategies and policies into targeted adaptation investment both domestically and abroad.
China’s climate risks are diverse and regionally specific. Northern and western provinces are increasingly affected by heatwaves and droughts, threatening agriculture and water security, while southern regions face heightened flooding and extreme precipitation. Coastal cities, home to one-fifth of the population and generating a third of the country’s GDP, are vulnerable to sea-level rise and storm surges. These risks not only threaten domestic economic growth but also impact the productivity of mitigation assets such as hydropower and wind power. Integrating adaptation measures offers a “triple dividend”: reducing loss and damage, preserving economic growth, and protecting social and environmental systems, while supporting resilient infrastructure development internationally.
China has developed an extensive policy architecture to address adaptation. The National Strategy for Climate Change Adaptation (2013) established guiding principles and objectives, while the National Strategy for Adaptation to Climate Change 2035 provides a comprehensive blueprint with targets, timelines, and monitoring frameworks for resilience in cities, ecosystems, agriculture, and public health. By 2024, 24 provinces had provincial action plans and 80 national policies spanning 12 dimensions of adaptation. High-level Five-Year Plans, particularly the 15th plan, reinforce adaptation priorities alongside mitigation efforts, calling for strengthened frameworks, resilience measures, and the integration of adaptation into sectoral and provincial plans.
Green finance serves as a critical channel to mobilize resources for adaptation. The People’s Bank of China has led reforms since 2014, enabling much of China’s mitigation success. Recent updates to China’s green finance catalogue broaden eligible activities to include climate resilience, although clear labelling and expanded coverage remain necessary to attract investment. Tracking adaptation finance is essential, yet challenging. Between 2018 and 2023, domestic adaptation investment averaged USD 15.4 billion annually, concentrated in water, wastewater, and disaster risk management. Internationally, China provided USD 20 billion in South-South climate finance, though adaptation-specific flows were minimal. Improving transparency, reporting, and alignment with global frameworks is critical to mobilize and prioritize adaptation investments.
China is well-positioned to scale adaptation investment domestically and abroad, leveraging its national strategies, policy frameworks, and green finance mechanisms. Expanding adaptation finance internationally can support climate-resilient growth in other emerging markets and developing economies, ensuring resilient infrastructure, energy, and transport systems. Successfully translating adaptation ambition into finance at scale could protect China’s development, advance global resilience, and provide a model for other climate-vulnerable countries integrating resilience into national growth strategies.
