China's Massive Clean Energy Investment Could Reshape Global Energy Transition

Responsible Us Bureau Feb 20, 2025 Add to Reading List

China's Clean Energy Investments Are Closing In On Fossil Fuel Size, Sealing Global Dominance

China's clean energy investment is now closing in on the size of its fossil fuel business, securing global dominance as it shifts to green energy. China invested 6.8 trillion yuan ($940 billion) in clean energy investment during 2024, just shy of the $1.12 trillion global fossil fuel investment. This is an important move in China's energy policy, yet the rate of investment in cleaner energy reduced to 7% in 2024 from 40% in 2023 because some of them were operated under over-capacity.

In spite of slowing down to this extent, the nation's clean energy industry continues to advance at breakneck pace with more than half of total investment flowing into showpiece industries like electric vehicles (EVs), batteries, and solar panels. Not only are these industries fueling China's rise, it seems, but recharting the world's energy map.

China's clean energy economy accounted for approximately 10% of China's GDP in 2024, up from 9% in 2023, according to Centre for Research on Energy and Clean Air (CREA) analysis. As low as the contribution of clean energy to overall economic performance fell to 26% of GDP in 2024 (from 40% in 2023), its growth rate was three times that of China's entire economy.

China's Leadership in Clean Energy
China's position at the top of the clean energy revolution is maintained through a bundle of technology that is placed at the hub of the global green revolution. China dominates worldwide exports of electric vehicle (EV) batteries with a staggering 60% market share. EV battery manufacturers from China grew their exports 30% every year during 2023 to ensure they dominated the EV market.

But yet another industry where China is picking up steam is low-carbon hydrogen energy. Hydrogen, with only a byproduct of steam, is emerging as the top product of the clean energy game. China has the world's largest green hydrogen project and 40% of the entire world's hydrogen fueling stations. Its investment in the technology is blanketing roads with more and more hydrogen-fueled cars, its strong clean energy push to turn to.

China's dominance is also observed in solar and wind power sectors. China has installed as much solar photovoltaic (PV) in 2023 as the rest of the world had installed elsewhere outside China in 2023. China is adding 75% of the world's wind farm equipment within the same period. The statistics assume that China is leading in greening up with the renewable sector.

Influence of China's Clean Technology Development
China's rapid development of the clean technology sector has had several impacts on the international energy sector. One is that the cost of green energy around the world has declined. The cheap production of solar panels by Chinese firms in large numbers has caused declining energy prices and brought renewable energy to even small towns. For example, rural Zimbabwe is being powered with urgently required electricity from Chinese-made solar panels. Likewise, it is happening with Chinese electric vehicles becoming popular in the Mexican, Thai, and other cities as clean, affordable transport.

China's influence even extends to other countries' clean energy policy. New Zealand, for instance, and in its drive towards a net-zero goal by 2050, sourced 89% of solar PV materials from China in 2023. It is indicative of how most countries utilize Chinese technology to make them sufficient to achieve their own sustainability goals.

A Global Clean Energy Powerhouse
China's clean energy investment is economic and geopolitical imperative. China is sprinting to lead the world in clean energy, already dominating electric vehicle, solar panel, and hydrogen fuel cell markets. Strategic investment not only increases China's energy security but also positions China as a leader in global campaigns against carbon emission and climate change.

As China continues to pour more investment into green energy, it is sure to continue being a world leader in the area of energy transition. It is significant because, despite odds, the nation has been able to commercialize renewable technologies on a large scale and offer green solutions at low costs to other individuals. China's pursuit of clean energy is at the top of its overall economic and environmental agenda. Adding pressure to the matter, China will lead the phasing out of fossil fuels and putting the world on a low-carbon, sustainable track.