The world, it was confirmed last week, breached 1.5C of warming last year for the first time. Climate change is happening even faster than expected. In determining what happens next, China will play a pivotal role. It is now by far the largest greenhouse gas emitter. But it is far ahead, too, in the race for supremacy in green technology. The International Energy Agency expects a striking 60 per cent of all renewable energy capacity installed worldwide between now and 2030 to come from China. It is the leading manufacturer of wind turbines, solar panels, electric vehicles and lithium-ion batteries. It dominates the downstream supply chain, too, with its control of critical minerals.
For western democracies, Beijing’s green ascendance sparks two big concerns. One is that its price advantage — achieved with hefty state support — will drive western rivals out of business and leave governments dependent on a strategic competitor for key technology. The other is that “smart” tech embedded in everything from EVs to turbines could pose security risks. The debate around UK chancellor Rachel Reeves’ visit to Beijing this weekend, over green energy and broader business links, highlights the dilemmas for Europe and the US.
China’s green advantage has deep roots. It was an early investor in critical minerals. As the energy transition gained steam, it stepped up green subsidies, tax credits and investments. Its annual clean energy investment rose by 40 per cent in 2023 to $890bn, becoming its main growth driver. Its green tech is being heavily deployed at home. Beijing achieved its target of having 1,200 gigawatts of installed solar and wind capacity — enough to power hundreds of millions of homes — six years early. EVs are expected to outsell petrol and diesel cars in China this year, 10 years ahead of its target.