China Leading in Green Transition
Is China's early dominance in the Solar and EV industries building an unstoppable competitive advantage, putting the West at risk of sustained economic loss and strategic exposure?
In 2023 China installed more solar power than any other countries’ total installed capacity, while also adding record amounts of wind. China's position as a renewable leader is now undeniable but is now also spreading to EVs and their dominance of both may threaten the West’s capacity to compete. Companies like BYD are now moving to replicate their domestic EV dominance in the West. This is forcing the US and Europe to consider tariffs on these far cheaper Chinese imports to support local automakers and solar producers. Doing so would hinder progress toward reducing global emissions. Not doing so could give China an undeniable dominance.
China's rapid growth was possible through strong government policy and resulting domestic competition – together driving prices to record lows. If the West is able to react fast enough, without imposing tariffs, this could drive geopolitical and market competition and accelerate global development of EVs and renewables. This would create economic and environmental benefits for everyone.
However, what I see is the US, and to a lesser but significant extent Europe and Australia, being held back by the excessive influence of incumbent businesses, conservative governments and right-wing populists. Ironically – given these groups professed focus on national interest and defending their economies - the result could be handing much greater power, economic dominance and global influence to China.
#EV #EnergyTransition #Geopolitics #Solar
Published by Bloomberg | 26 January 2024