In a pivotal shift, China’s clean energy sectors, including renewables, nuclear power, energy storage, EVs, and railways, emerged as the primary catalysts for the country’s GDP growth in 2023, according to a report by the Centre for Research on Energy and Clean Air (CREA). This sector accounted for a substantial 40% of China’s economic expansion, a significant pivot in the world’s second-largest economy.
Unprecedented Clean Energy Investment
China invested a staggering 6.3 trillion yuan (US$890 billion) in clean energy in 2023, marking a remarkable 40% year-on-year increase. This amount is equivalent to the global investment in fossil fuels for the same period, as reported by CREA. The country’s reliance on clean technology sectors for growth underscores their economic and political significance, potentially supporting an accelerated energy transition.
Clean Energy Dominates Investment Growth
While overall investments in China grew modestly by 1.5 trillion yuan in 2023, clean energy sectors fueled this growth. Renewables, nuclear power, electricity grids, energy storage, electric vehicles (EVs), and railways accounted for all of the investment growth. Clean-energy sectors contributed 11.4 trillion yuan to the Chinese economy in 2023, representing 40% of the country’s GDP expansion.
Clean Energy Counterbalances Real Estate Decline
China’s clean-energy boom, particularly in solar power, EVs, and batteries, compensated for the decline in the real estate sector. Without this contribution, China’s GDP growth would have fallen short of the government’s target, emphasizing the critical role played by clean energy in sustaining economic momentum.
Cautionary Notes on Overcapacity
Despite the impressive growth, the CREA report highlights concerns about the sustainability of China’s clean-energy investment model. Overcapacity and weakening profitability pose risks to the industry’s healthy development. Challenges include losses in the solar photovoltaics (PV) and wind turbine manufacturing sector due to intense competition and global market uncertainties.
Future Outlook
China’s clean-energy sector is poised for continued growth in 2024, even though replicating the frenetic expansion of 2023 may not occur. The country’s dominance in renewables, with 60% of new renewable capacity globally expected by 2028, positions it as a key player in shaping the clean energy market trends. However, the industry must address overcapacity challenges to ensure sustained, healthy growth.
In conclusion, China’s robust investment in clean energy not only propels economic growth but also underscores the country’s commitment to green energy policies. While challenges exist, the sheer scale of investment indicates a transformative shift towards sustainable energy sources, contributing to global efforts in combating climate change.
Source：scmp.com
