This blog post was originally published for China Daily USA.

Chinese President Xi Jinping and U.S. President Barack Obama have made a landmark joint announcement on climate that will provide a major jolt of momentum for international climate action. By putting clear emission targets on the table, these two leaders have made it clear they understand the risks of climate change—and the urgency of action.

A century from now, historians could look back and see this as a turning point: the moment when China and the United States took a leading role in the global shift away from high-carbon fossil fuels, toward strong economies that rely primarily on renewable energy and low-carbon technology.

The building blocks of this new, lower-carbon future are already in place. By using them intelligently, China and the U.S. can show the world that a sustainable environment and a growing economy go hand in hand.

China, especially, is at a pivot point: after 30 years of rapid economic growth, its GDP fell to around 7.7 percent last year, the lowest since the 1997 Asian financial crisis. Poised at the final stages of industrialization and mid-way through a process of urbanization, China has made great strides in energy efficiency and renewable energy, installing 12 gigawatts of solar photovoltaic projects in 2013, 50 percent more than any other country has done in a single year. However, China is also the world's largest fossil fuel importer, making it more vulnerable than developed economies to volatile global energy prices.

A just-released report, China and the New Climate Economy, a project on behalf of the Global Commission on the Economy and Climate, with research led by experts at Tsinghua University, shows that China faces a series of important choices that will shape its future and affect the rest of the world. The opportunities for China in terms of clean air, increased energy security and dynamic growth are great, and so are the challenges.

Between now and 2030, China has the opportunity to become a high-income economy, but it needs sustainable economic growth to avoid getting stuck in a middle-income trap. A new climate economy that takes better care of the environment also presents many business and growth opportunities.

China can become a global leader in developing new and renewable energy solutions, but to do so it will need to reform its own energy system and go to the next level in fostering safe, efficient, clean and low-carbon energy supply and consumption. China could play an important role in the future global low-carbon development, as long as it further limits greenhouse gas emissions and manages the risks of climate change.

How can China best seize these opportunities? China's newly announced plan to have emissions peak and to increase the share of non-fossil fuel energy to around 20 percent by 2030 is a step in the right direction. New policies on economy restructuring, energy conservation, energy efficiency improvement, renewable energy development and air pollution regulation would also be important. The government can do a lot by sending the right market signals to provide private companies the certainty to invest in low-carbon projects.

A tall order? Yes. But there are clear signs that meeting its new target to peak emissions by 2030 is very possible for China. Researchers at Tsinghua University and MIT found that by continuing current efforts to reduce carbon intensity, emissions will level off between 2030 and 2040.

Accelerating efforts could bring the level-off to 2025, with emissions dropping after that. Jiang Kejun, a leading researcher with China's economic planning agency, also found that an aggressive strategy, coupled with additional policies such as promotion of carbon capture and storage, could see a peak by 2025. China has also begun considering strong new steps on the low carbon path such as capping coal and putting a price on carbon. From the experiences in other countries, we know policies such as these can help drive innovation and cut the costs of transition, making it easier to meet—or exceed—the current targets.

This is an area where China and the U.S. can work together to benefit both countries. While all major emitters are taking some climate action—the US and China included—none are yet doing enough. With China at an economic and environmental crossroad, ongoing cooperation on climate and clean energy with the US can yield significant social and economic rewards for both countries. The benefits of this course can and must go together to tackle climate change and create vibrant economies for the 21st century.