China is winning the race to net zero

China is winning the clean energy race.

It has spent ten times more on clean energy than either the US or Europe over the past five years. It dominates the rapidly growing renewables manufacturing market, producing 90% of all solar panels, over 70% of all lithium batteries and 65% of all wind turbines.

That’s a very smart move. Our recent research shows there’s no evidence that solar and wind cannot continue their recent spectacular growth rates. Renewables could become a multi-trillion-dollar global industry in the near future.

The eye-watering investments of the European Green Deal and the US’s Inflation Reduction Act (IRA) – each close to US$1 trillion over the next decade – might close the gap in terms of their clean energy deployment, but they are unlikely to shake China’s market dominance.

China already processes most of the clean energy supply materials and has an advanced manufacturing base that is more capable of scaling up production to meet the rising demand. China’s Tongwei solar manufacturing plant, for example, could single-handedly meet 10% of the 2023 global solar market demand.

And some of the newer Chinese plants are designed to be modular. If demand continues to grow, another one or two such factories can be built relatively quickly – taking economies of scale to another level and bringing down costs even further.

To understand what is driving this spectacular growth in China at a city level, we canvased expert opinions from regulators, academics, industry and green groups in two leading Chinese cities: Beijing and Hong Kong.

As one respondent in our survey summarized, in both cities the choice of decarbonization policies is influenced by factors including “alignment with the national agenda, economic