China is rapidly emerging as the undisputed leader in the global clean energy race, having invested an extraordinary amount in renewable energy development over the past decade. This isn’t just a temporary trend — it’s a strategic move aimed at securing dominance in what is shaping up to be a multi-trillion-dollar global industry. Over the past five years, China has outspent both the United States and Europe by ten times in clean energy investments, and the results are speaking for themselves.
China dominates the renewables manufacturing sector, producing 90% of all solar panels, over 70% of all lithium-ion batteries, and 65% of all wind turbines globally. This stranglehold on the production of key renewable technologies has given China a considerable advantage in the race to decarbonize, positioning it as a central player in the fight against climate change. While the European Green Deal and the U.S. Inflation Reduction Act (IRA) represent significant steps forward in clean energy investment, both regions are still playing catch-up.
China’s Success
China’s dominance in renewable energy can be traced back to its early investments and strategic industrial planning. Unlike the U.S. and Europe, where political and economic debates often slow down energy transitions, China has acted decisively, betting big on renewables. Tongwei, a Chinese solar manufacturing plant, is a prime example of this. With the capacity to single-handedly meet 10% of the global demand for solar panels in 2023, Tongwei embodies China’s unique ability to scale up production at unprecedented speeds.
But it’s not just a matter of scale; it’s also about speed and efficiency. China’s renewable energy plants are increasingly modular, meaning they can be rapidly duplicated to meet growing demand. This modularity not only enhances scalability but also drives costs down, contributing to China’s price competitiveness. When demand spikes, as it inevitably will in the coming years, China will be in the best position to meet it.
The importance of China’s manufacturing base cannot be understated. Having most of the world’s clean energy supply chain located within its borders means China has a significant advantage in responding to rising global demand. While Europe and the U.S. are ramping up their renewable energy efforts, China’s head start means it is unlikely to relinquish its position anytime soon.
China’s ambitious drive towards renewables is aligned with its pledge to achieve carbon neutrality by 2060, announced during the 75th United Nations General Assembly. This pledge has served as a catalyst for cities across China to adopt aggressive decarbonization targets. In Beijing and Hong Kong, for instance, policymakers are prioritizing renewable energy sources and the electrification of transport as core strategies to meet local emissions reduction goals.
The national agenda strongly influences the choice of decarbonization policies at the city level. Economic costs, ease of implementation, and co-benefits like cleaner air and job creation are all critical factors driving these decisions. This top-down approach allows Chinese cities to integrate renewables into their energy mix quickly and efficiently, further accelerating the country’s transition to a low-carbon economy.
Unlike the U.S. and Europe, which continue to invest heavily in carbon capture technologies and nuclear energy as part of their clean energy strategies, China is focusing predominantly on renewables. While it is investing in alternative clean technologies, such as carbon capture and nuclear power, the scale of these investments pales in comparison to its commitment to solar, wind, and battery storage.
Renewable Energy Boom and Its Global Implications
China’s clean energy revolution is not happening in isolation. Its aggressive investments in renewables are having far-reaching effects on the global energy landscape. Renewable technologies, particularly solar and wind, are experiencing exponential growth. Recent research shows there is no evidence that this trend cannot continue at its current pace, leading to a potential multi-trillion-dollar global renewables market in the near future.
This is where China’s dominance becomes even more apparent. As the world’s largest manufacturer of solar panels, wind turbines, and batteries, China is uniquely positioned to capitalize on this growing market. The more solar panels, batteries, and turbines the world demands, the more China benefits — both economically and geopolitically.
One of the reasons renewables are such an attractive investment is their high learning rate. As more renewable technologies are produced, the cost of production decreases, creating a positive feedback loop. This phenomenon, known as “learning-by-doing,” is driving down the cost of solar and wind power, making them more competitive than fossil fuels in many parts of the world. China’s ability to mass-produce these technologies has been instrumental in accelerating this process.
Moreover, China’s renewable energy technologies are modular, making them easy to deploy at various scales — from a single solar panel on a rooftop to massive wind farms. This flexibility, combined with their declining costs, makes renewables an increasingly popular option for countries looking to reduce their carbon footprints quickly and cost-effectively.
China’s Clean Energy Revolution
To gain a deeper understanding of what is fueling China’s clean energy growth at a local level, a recent study canvassed opinions from experts in two major Chinese cities: Beijing and Hong Kong. The study found that both cities are driven by a combination of national policy alignment, economic viability, and environmental co-benefits. Beijing and Hong Kong, like many other Chinese cities, view renewables as the most practical solution for achieving rapid decarbonization.
Transportation electrification and renewable energy adoption are seen as top priorities. These strategies not only help cities meet their emissions targets but also reduce air pollution and create jobs in the renewable energy sector. In contrast, more controversial solutions like carbon capture and storage (CCS) are seen as a last resort, reserved for hard-to-abate emissions.
China’s Success: What Can Other Countries Do?
While China’s clean energy dominance might seem insurmountable, other countries still have opportunities to compete in the global renewable energy race. The United States and Europe, despite being outspent by China, have taken significant steps in recent years to accelerate their own transitions to renewable energy.
Both regions are ramping up investments in clean technologies, particularly hydrogen production, carbon capture, and electric vehicles. In the U.K., researchers from the University of Oxford’s climate econometrics group have proposed five key policy interventions that could help the country keep pace with China’s clean energy revolution.
- Expanding the use of electric vehicles (EVs) and leveraging them as decentralized storage units for the grid.
- Scaling up renewable energy production through offshore wind farms.
- Developing vertical and underground farming in urban centers to reduce the environmental impact of food production.
- Prioritizing energy efficiency measures in both new and existing buildings.
- Establishing ambitious green finance initiatives to encourage private-sector investment in clean technologies.
These policy interventions could help countries like the U.K. achieve the necessary “kicks” and “shifts” to accelerate their clean energy transitions. “Kicks” refer to actions that trigger positive feedback loops, such as learning-by-doing in renewables, while “shifts” involve fundamentally altering the structure of an economy to favor clean technologies. The combination of these two strategies could unlock rapid decarbonization across multiple sectors.
The global clean energy race is intensifying as the 2050 deadline to achieve net zero emissions looms. China’s head start in renewable energy production has given it a commanding lead, but the race is far from over. As urbanization continues to scale up, and as more countries and cities unveil their net-zero plans, the role of renewables in the global energy mix will only increase.
China’s strategy of mass-producing and rapidly scaling renewable technologies has proven to be highly effective, but other countries are beginning to catch on. The U.S. Inflation Reduction Act, the European Green Deal, and other ambitious climate policies are beginning to close the investment gap.
However, China’s advanced manufacturing base and established dominance in the renewable supply chain mean it will likely remain the frontrunner in the clean energy race for the foreseeable future. The global transition to a low-carbon economy, policymakers must adopt a “Sips-thinking” approach — focusing on small, targeted interventions that trigger larger systemic changes. By doing so, the world can harness the full potential of renewable energy and move closer to achieving net-zero emissions by 2050.
