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Opinion
China’s clean energy transition solves several problems at once
By increasing investment in renewables, China’s economy stands to benefit from more sustainable growth rates and improved terms of trade
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Dr Andy Xie is a Shanghai-based independent economist specialising in China and Asia, and writes, speaks and consults on global economics and financial markets.
China has been increasing investment in renewable energy to give its economy a boost. In the first half of 2025, China’s solar power generation capacity jumped 54.2 per cent year on year, while wind power’s generation capacity increased by 22.7 per cent in the same time period. The country is also constructing what is set to be the world’s largest hydropower project, expected to cost less than 1 per cent of China’s gross domestic product (GDP).
Reduced consumption of crude oil coupled with lower prices could cut China’s energy import bill by half a per cent of GDP. The clean energy push will increase investment and lower supply-side costs, killing two birds with one stone. Cheap and abundant renewable energy is the most important pillar of China’s long-term prosperity.
China’s initial industrialisation was dependent on imported energy. But renewables are giving the country the means to turn its own industrial power into energy; China will no longer need to rely on imports to power its economy.
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