China’s Climate Aid for the Global South—Changing Approach and Evolving Institutions

The shortage of climate finance is a key hindrance to the achievement of the United Nations’ Sustainable Development Goals (SDG) 13 on Climate Action. This article reviews and analyzes China’s increasing involvement in climate finance among the Global South Countries (GSCs), amidst the substantial funding gap left by North–South cooperation. GSCs face a stark disparity between the required trillions for climate action and the insufficient billions currently allocated. China’s response, through South–South cooperation, includes a diversified aid package and institutional reforms to streamline foreign aid. Despite these efforts, challenges such as institutional fragmentation and coordination complexities persist. The article underscores the necessity of refining China’s institutions to improve the effectiveness of its climate aid—a crucial step as the country takes on an increasingly significant role in global climate leadership.