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From coal to clean: China’s green ascent and what it means for investors
key takeaways.
China is now the global leader in clean-tech, from EVs to renewables
Its strategy contrasts sharply with the US, which has rolled back climate commitments under President Trump
China’s dominance is deliberate, long-term, and investment-driven
For investors, there are opportunities but also potential risks, given the geopolitical environment and concerns over China’s broader sustainability credentials.
A surprising frontrunner
You may have seen some new, unfamiliar, Chinese car brands on your local roads in recent years. They are just the tip of a green iceberg. Often associated with coal and heavy industry, China now leads the world not only in electric vehicles (EVs) but also in the manufacture and export of solar panels, wind turbines, and battery storage. Together clean energy technologies already makes up 10% of China’s GDP1.
“China has become the world’s undisputed leader in clean energy – not just one technology or market segment, but almost the entire portfolio,” says Carolyn Kissane, Associate Dean and Clinical Professor at the New York University School of Professional Studies Center for Global Affairs2.
China has embedded clean-tech into its industrial policy, using it to drive competitiveness, energy security, and geopolitical influence. For investors, this signals a structural shift in global capital flows and flags up potential sustainability-linked opportunities
This transformation is strategic. China has embedded clean-tech into its industrial policy, using it to drive competitiveness, energy security, and geopolitical influence. For investors, this signals a structural shift in global capital flows and flags up potential sustainability-linked opportunities.
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Climate crossroads
While China accelerates its green agenda, the US has taken a different route. Under President Trump, the US has withdrawn from the Paris Agreement on climate change, frozen USD 28 billion in clean-tech projects3, and rolled back EV and renewables support.
Trump’s tariffs and climate scepticism have slowed US clean-tech progress, even as global momentum builds. “The transition to renewables is unstoppable, with or without him,” says Andreas Sieber, Associate Director of Policy and Campaigns at climate activists 350.org4.
China, by contrast, reaffirmed its climate goals – peak carbon before 2030 and net zero by 20605. President Xi Jinping recently committed to a full-economy emissions reduction plan, including all greenhouse gases. “No matter how the international situation changes,” he said, “China will not slow down its efforts to address climate change.”6 The contrast is stark: one superpower retreating, the other advancing.
China’s clean-tech dominance is built on scale, policy, and innovation. In EVs, for example, China makes up nearly two-thirds of global sales and accounts for over 70% of production7. In 2024 alone, Chinese buyers purchased more than 11 million electric cars – more than the entire world bought just two years earlier6.
In EVs, China makes up nearly two-thirds of global sales and accounts for over 70% of production
Policy support remains strong, with tax breaks set to run for at least the remainder of this year. But affordability is key. Even without subsidies, two-thirds of EVs sold in China in 2024 were cheaper than internal combustion engine (ICE) vehicles9.
Fierce domestic competition has driven down costs and accelerated innovation, and is now helping Chinese EV makers to compete internationally. BYD, for example, outsold Tesla in Europe in April10 and now ranks among the top global automakers11.
A tightly woven manufacturing ecosystem supports China’s EV dominance. The country controls 85% of global battery cell production12, and its firms lead in charging speed and range. According to Jim Farley, CEO of Ford, China is 10 years ahead of the West in making EV batteries and in creating a digital driving experience13.
Infrastructure is another pillar of strength – people only buy EVs if they have confidence they can charge them. Since 2020, nearly two-thirds of all new public chargers added globally have been installed in China, which now accounts for around 65% of the world’s total14.
China is also the world’s largest producer of renewable energy and the equipment that generates it. China accounts for half of all new renewables globally each year15, and is on track to account for 60% of the world’s renewable capacity expansion by 203016. Nuclear power is also expanding faster in China than anywhere else17.
China’s renewables strength is driven by policy support, including ambitious Five-Year Plans focussed on installed capacity targets and renewables integration18.
China accounts for half of all new renewables globally each year, and is on track to account for 60% of the world’s renewable capacity expansion by 2030… The country aims to have 39% of electricity generation from non-fossil sources by the end of this year
The country aims to have 39% of electricity generation from non-fossil sources by the end of this year. It is investing heavily in battery storage and plans 120 GW of pumped hydro storage by 2030 to help smooth out the peaks and troughs of renewable energy generation19.
Just as with EVs, China dominates solar photovoltaic (PV) panel manufacturing, controlling 80–95% of global supply chains20.
China’s clean-tech exports increasingly flow to the Global South and Asia-Pacific (APAC). Only 4% go to the US – insulating it from the impact of recent tariffs – while over 50% head to emerging markets21.
This shift is strategic. As the US retreats, China is filling the void. China has invested over USD 100 billion in overseas clean-tech projects since 2023, according to Australian research group Climate Energy Finance22.
China holds a commanding position in the green transition, leading the world in 37 of 44 critical technologies23. This technological dominance, combined with an export-led strategy, has a powerful geopolitical dimension. By embedding its technology across APAC, the Global South and beyond, China is steadily expanding its influence.
The risks for other nations of becoming reliant on Chinese exports and expertise are widely recognised. In 2023, Ursula von der Leyen, President of the European Commission, warned: “We have a compelling need to make this Net Zero transition without creating new dependencies.”24 Such concerns have already prompted the US and the EU to introduce tariffs and other protective measures.
The paradox of power
China’s sustainability push is not just founded on its dominance in EVs and renewables – important though they are. Other levers include the country’s Emissions Trading System (ETS), launched in 2021, which is already the world’s largest. Plans are in place to extend the ETS to heavy industry and introduce permit auctions, deepening its reach25.
Yet China’s sustainability leadership is not without contradictions. Though it leads in clean-tech, the country still burns more coal than any other26, accounting for over 56% of global demand in 202327. Its CO₂ emissions rose in 2024, even as US and European emissions fell28.
Yet China’s sustainability leadership is not without contradictions… The country still burns more coal than any other, accounting for over 56% of global demand in 2023
Human rights concerns also cloud its sustainability credentials. Around 45% of the world’s polysilicon – used in solar panels – comes from Xinjiang, where it is regularly produced with forced labour29.
However, there are signs of progress on some fronts. In Q1 2025, clean power growth pushed coal use and emissions into decline for the first time30. Whether this marks a turning point remains to be seen.
System change in motion
China’s clean-tech ascent is more than a story of industrial renewal – it is a strategic investment opportunity embedded in a broader global transformation.
The transition to a net-zero, nature-positive economy is unfolding at the speed of the digital revolution, reshaping value chains and profit pools across sectors.
The rise of system-change investing – focussed on companies solving structural pain points – offers a lens through which China’s clean-tech ascent can be seen as both a geopolitical force and a source of long-term financial returns.
China’s leadership in electrified transport, solar PV, and battery manufacturing positions it at the heart of this shift. In 2024, it accounted for more energy transition investment than the UK, Europe and the US combined31 – the cost structure and scale have made it difficult for Western firms to compete.
For investors, these developments should prompt a re-evaluation of passive investment strategies that can overlook Chinese players. There is a need to embrace selectivity and thematic diversification
For investors, these developments should prompt a re-evaluation of passive investment strategies that can overlook Chinese players. There is a need to embrace selectivity and thematic diversification, identifying technology leaders capable of defending margins and market share.
Investing with eyes open
China’s clean-tech revolution is reshaping the global energy landscape, offering investors exposure to electrification, infrastructure, and sustainability-linked growth – especially in emerging markets. But it also demands nuanced analysis.
We believe the transition to a net-zero, nature-positive economy will be non-linear and geopolitically complex. China’s role in this transition is pivotal – but raises several important considerations.
Investors must weigh opportunity against risk, and short-term volatility against long-term structural change. In a fractured world, China’s clean-tech ascent is both a challenge and a catalyst.
This is a marketing communication issued by Bank Lombard Odier & Co Ltd (hereinafter “Lombard Odier”).
It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication.
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