Imagine a world where one nation's dominance in clean energy is not just transforming its own economy, but reshaping global partnerships and trade. That's exactly what's happening with China, and the numbers are staggering. Chinese firms have injected a whopping $80 billion into global clean-tech ventures in a single year, and this surge is creating both unprecedented opportunities and sparking some serious geopolitical tensions.
Fueled partly by trade friction initiated by the Trump administration, many countries are now deepening their energy ties with China. This $80 billion figure, recorded up to November 2025, represents a remarkable 60% annualized increase. To put that in perspective, it surpasses the $100 billion spent over the previous two years combined. This massive investment is driven by China's leading position in critical energy transition technologies, including solar, wind, electric vehicles (EVs), and EV batteries. This dominance was already well-established before the U.S. significantly curtailed federal support for clean energy initiatives.
Caroline Wang, an analyst at the Australian think tank Climate Energy Finance (CEF), highlights this trend as a unique form of "South-South cooperation." According to Wang, these investments align national development goals with China’s technological and industrial strengths. "While the US sees China’s rise as a threat, many developing countries are inspired by its success and aim to emulate it,” she states in a recent report. But here's where it gets controversial: Is this simply a win-win scenario, or does it create dependencies that could leave developing nations vulnerable?
Southeast Asia is currently the primary destination for Chinese clean energy investments, with Indonesia and Malaysia leading the way. A prime example is the $6 billion battery plant under joint development by Indonesia Battery, Aneka Tambang, and Contemporary Amperex Technology Co Limited (CATL), a Chinese EV battery giant. This single project demonstrates the scale and collaborative nature of these investments.
The Middle East and North Africa (MENA) are also experiencing a surge in Chinese renewable energy investments. Governments in the region are actively seeking to reduce their reliance on oil, offering incentives like competitive tax rates and fast-tracked project approvals to attract Chinese clean-tech companies. These projects often focus on joint ventures with local partners, building local manufacturing capacity, and creating jobs.
And this is the part most people miss: China's clean energy sector is also thriving in less developed economies, even as the U.S. has seemingly taken a step back from the clean energy race. An astonishing 51% of China’s EV sales growth this year has come from countries outside the Organisation for Economic Co-operation and Development (OECD). Exports to ASEAN countries skyrocketed by 75% in the first eight months of 2025, while EV exports to Africa nearly tripled, with Morocco and Nigeria leading the charge. Nigeria, in particular, saw a six-fold increase in EV purchases! Similarly, exports to the Middle East jumped by 72%, and sales to Latin America grew by 11%. Beyond EVs, China exported 46 GW of solar PV equipment in August alone, exceeding Australia’s total installed capacity.
Analysts at Ember emphasize that China's electrotech is becoming the foundation of the new energy system, with continuous cost reductions driving faster growth, especially in emerging economies. This growth is powered by a "virtuous cycle" of falling renewable energy prices. Increased adoption and production lead to lower costs, which in turn encourages even more adoption and production. This creates a self-sustaining cycle driven by technological advancements, economies of scale, increased competition, and more efficient installation and operation of renewable energy systems.
However, this picture isn't entirely rosy. China’s value of green energy exports has declined by 47% in dollar terms since its March 2023 peak, primarily due to a fierce price war among Chinese solar manufacturers. Since 2020, China has witnessed significant price reductions in both solar panels and EV batteries. The average EV battery pack price in China dropped by about 30% in 2024, contributing to an almost 10% decrease in average BEV SUV prices for the year. Is this price war a temporary blip, or a sign of deeper structural issues within the Chinese clean energy sector?
Last year, former U.S. Treasury Secretary Janet Yellen expressed concerns that China’s national underwriting of energy and other companies is creating oversupply and distorting global markets. China has invested over $50 billion in wafer-to-solar panel production lines, ten times more than Europe, and controls approximately 95% of the world’s polysilicon and wafer supply. China's installed renewable energy capacity, including wind and solar, reached 1,410 gigawatts last year, surpassing coal. In 2023, the International Energy Agency (IEA) warned of the potential risks associated with the world's heavy reliance on China's solar and clean energy sector.
But hold on, the plot thickens! Beijing appears to be increasingly willing to embrace free market principles. The South China Morning Post reported earlier this year that China is aiming to modernize its renewable energy sector by allowing market forces, rather than government mandates, to determine clean energy prices. The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) have issued a notice about deepening the “market-oriented reform,” where the price of on-grid electricity generated from renewable sources like wind and solar will be determined by market mechanisms.
The authorities explained that with the large-scale development of new energy, fixed pricing for on-grid electricity can no longer accurately reflect market supply and demand and does not share its responsibility for regulating the power system. To balance the new market-driven pricing, Beijing will implement "balancing payments," similar to the UK's contracts for difference. This system ensures power producers receive compensation when electricity prices fall below an agreed level and repay excess profits when rates exceed a certain threshold.
This move signals a shift away from subsidy-driven incentives as China's renewable energy sector matures. China has faced criticism for its protectionist policies in the renewable energy sector, which have been blamed for creating a global glut. Will this new market-oriented approach truly level the playing field, or will China find other ways to maintain its dominance? What are your thoughts on China's role in the global clean energy transition? Is it a force for good, or a potential threat to other economies?
