Biggest at both

China leads the world across a number of energy metrics - including burning half the world's coal. Its clean energy transition is already shaping the world in the other direction.

Currently China produces the majority world share in both clean energy and fossil fuel energy production. Of which nearly half (48%) is used between its manufacturing and service economies.

Unlike the deindustrialsed West, China has grown its tertiary and quaternary sectors while maintaining its primary and secondary sectors. The West outsources its manufacturing to where labour is cheaper and regulations are laxed. The price is of this: dependency on the highly self-sufficient, vertically integrated Chinese economy.

The service economy makes up around half the country’s GDP . While smaller, manufacturing plays a more prominent role in the world economy as a dominant exporter of concrete, steel, aluminium, and electronics.

Transport and residential energy use amount to 15% each with the remaining ~20% split between agriculture, infrastructure, and a variety of niche uses.

=(1Tj = 277,778kWh)
Total energy production: 135,742,356 Tj
Total energy supply: 168,366,571 Tj

Production and supply have a similar relationship to gross and net profit; production is that directly extracted from natural sources while supply is a morefinal figure that measures available energy after transformations and transport, accounting for imports and exports and energy stockpiles.

China has far greater differences between its production and supply of different energy sources. Most notably oil and coal.

Despite importing coal from Mongolia, Australia, and Russia China’s coal supply is less than its production. The difference mainly lies in transport and stockpiling.

It takes coal to move coal. Moving coal from from where it's extrancted of imported from inland regions to the coast where much of it is consumed takes up half of China's rail capacity. The coal used in transport, and shipping, does not count towards final ready supply. Coal stocks can be adjusted to influence the global market.

China holds 143bn tonnes or 13% the world’s stockpile of coal. Stockpiled coal also does not contribute to final supply figures. China’s oil supply is elevated by importing over 11,108 barrels of crude oil per day. Its largest importer is Russia. Other differentials of increased supply over production can also be attributed to imports.

Peak emissions by 2030, Net Zero by 2060

China aims to peak carbon output by 2030. After then its will decarbonise and reach net zero by 2060. Coal will remain a significant portion of China's energy mix until then. Coal fired power plants will remain open to make use of their domestic supply and to provide energy security throughout the transition.

China aims to become the largest country powered by green energy and the world leader in energy technology. In 2024 China applied for 75% of the world's clean energy patents; already dominant in battery exports, China will grow to produce 69% of the world’s lithium batteries by 2030 giving it global leverage as it pushes EV’s to become the norm.

China pledges to increase wind energy production six fold compared to 2020 levels up to 3,600 gigawatts at full capacity (the maximum power potential at any one moment). For comparison, Ireland’s total electricity production totalled 31,066 gigawatt hours in 2024. China’s ambitions will match Ireland’s current yearly output in less than 9 hours at full capacity.

Hydrogen energy is a point of focus. Currently the majority share of hydrogen energy is generated from coal, known as ‘Black-hydrogen’. As it requires a primary energy source, hydrogen can be thought of as an extension of China's use of coal power. China produces 33 million tonnes of hydrogen annually, a 2021 - 2035 hydrogen plan seeks to produce 100,000 - 200,000 tonnes of renewably sourced hydrogen (green hydrogen) per year.

China is embarking on a longer transition timeline to net zero relative to the 2030 targets seen in Europe; it is a much larger ship to turn around. China’s goals do not only concern itself, it seeks to dominate global energy and EV markets, dually achieving economic growth and sustainability, challenging common (western) notions that it is a zero sum game.

Powering the Chinese dream

China’s transformation has concrete and conceptual objectives. Concrete reasons including urban air quality concerns and enhancing economic competitiveness have been stated. The transition can be understood more broadly as China’s mounting bid for global leadership, otherwise known as the Chinese Dream.

While writing this report, Chinese president Xi Jinping spoke at the United Nations Climate Summit marking 10 years following the Paris climate agreement.

In his address Xi raised 3 points:

“First, we must firm up confidence”

“Green and low-carbon transition is the trend of our time. While some country is acting against it, the international community should stay focused on the right direction”

Xi called for “unwavering” confidence in the technology and for the global community to push to deliver on their sustainable pledges in an environment of cooperation.

It's hardly mysterious what that “some country” might be. Regardless of the USA’s position on climate change, Xi calls on the global community to follow China’s course to stay below the crucial 1.5oC warming mark, positioning himself a global leader instead of Trump.

As stated before, China's goals are twofold - growth and sustainability. International commitment to climate pledges are equally important to both; by exporting 80% of global PV components and leading in EV production (¾ world manufacturing) international commitment to net zero policies is also crucial for China's export economy.

PV exports tripled over 5 years, reaching 242 GW in 2024. China is also a large provider of batteries for PV energy storage.

Deepening cooperation with UN Sustainable Development Goals (SDG), Xi echoes SDG 10: Reduce inequality within and among countries. He states: “In the course of global green transition, fairness and equity should be upheld and the right to development of developing countries fully respected (...) The transition should serve to narrow rather than widen the North-South gap".

China's energy transition buoys much of the developing world as the dominant main energy technology exporter:

Chinese solar exports to Namibia, Senegal, Cambodia, Afghanistan and Pakistan exceed each their entire energy capacity as of 2023. Exports to Kenya, Yemen, Sri Lanka and Tanzania make up for more than half the size of their domestic electricity systems.

Chinese solar exports account for one third of Brazil's production capacity.

Cheaper Chinese tech is lifting regional PV generation even if it is not providing all the components. Green tech adoption enabled 25% of emerging markets to surpass the USA in end use electrification rates, where final power consumption is electricity, not fossil fuels. While not necessarily a green metric itself, end-use electrification enables decarbonisation by replacing power consumption with that that can be renewable.

“The world now faces a huge demand for green development. It is important that countries strengthen international coordination in green technologies and industries to address the shortfall in green production capacity and ensure free flow of quality green products globally, so that the benefits of green development can reach all corners of the world.” The EU’s EV, PV, and general green tech market is not openly accessible to China.I interpret this point as him leveraging European climate pledges for free market access. If you're serious about climate, open your markets to us, Xi says.

Following the party line heard from by CCP spokesperson Victor Gao, China does not need to approach its trading partners, it is them who are best off coming to us.

The full transcript of the address can be read here.

“Feeling the stones”

The reform process that took China from communism to ‘socialism with Chinese characteristics’ (capitalism remains an avoided term) between 1978 and the mid 1990’s was a gradual one. Free market features were regionally introduced and trialed in different sectors before they were introduced throughout the economy.

Then leader Deng Xiaoping described his leadership outlook as “Crossing the river by touching the stones”; to feel out each step and to adjust his path. Economic consensus has dubbed the ‘gradualists’ victorious over proponents of ‘shock therapy’ , where free market reforms are introduced rapidly, as a more successful economic process.

China’s energy transformation appears to be taking a gradualist approach too. Since 2006, China's 5 year plans have been building a new energy infrastructure from the ground up.

From 2006 - 2015, targets focused on increasing renewable energy capacity. Investment climbed from $10.1bn to $56.3bn between 2006 - 2013 to boost solar, hydro, and wind power. Hydro and wind power capacity rose steadily, PV power rapidly. A more detailed breakdown can be found here.

The 2016 - 2020 period focused on national system integration. China was to be connected “with innovation as the basis from which to pursue development”. Rural to urban connectivity, cross-city and cross regional development were to elevate the country’s power infrastructure, ironing out regional inequalities to make China more technologically (as well as socially and culturally) homogeneous. One initiative aimed to install 20% of rural and suburban homes with rooftop PV panels. The initiative benefited rural communities more and connected different regions through a common energy source.

2021 - 2025 targets aimed for ‘power system reconfiguration’ . In other words, establishing a foundation for a new energy system. In a similar timeframe, 2019 - 2024, China accounted for 40% of global renewable expansion including 50% of PV growth. Simultaneous battery development secures the power infrastructure from being vulnerable to issues of ‘intermittancy’.

These might not appear as small steps. However, given the scale of energy production China seeks to maintain and the timeframe by which it is to reach net zero we can understand China's approach to energy transformation as ‘feeling
the stones’
.

Do red lines block the path to green cooperation?

Without dwelling on the state of US democracy, let's just say that the current administration’s goals may be ‘sustained’ beyond 2028. If this is the case, reshaping relationships with China will be an equally unavoidable reality for Europe.

The UK and EU face many of the same conditions in trading with China in the context of transitioning to Net Zero. In parts, the UK and EU can be grouped together when assessing relations with China.

However, as separate entities, there are distinctions in trade policy between them with China.The Department for Business and Trade values annual UK-China trade at £99.7bn as of September 2025. The majority of trade takes place in the service economy - all things travel, financial, and intellectual. Total export share is split 70/ 30 in favour of China and this gap is widening. Key goods exports include telecoms (£6.9bn) and office machinery (£5.4bn) from China and cars (£3.7bn) and crude, oil (£1.7bn) from the UK.

China produces 45% of the world’s polysilicon, a key component in PV panels. Calls for boycotts have been made after findings of human rights abuses across Xinjiang where the material is found. China is the largest external origin of PV panels to Europe.

Chinese made wind turbines are an attractive prospect for the UK. Heightened competition and subsidised manufacturing have made Chinese turbines 30% less expensive than US and EU competition. Last month Octopus Energy partnered with Chinese owned Ming Yang Smart Energy to expand UK onshore and offshore wind energy by 6gW. There is capacity for wind generation to power 5 million homes from on and offshore sites in the UK.

CEO of Octopus Energy Zoisa North-Bond called wind expansion a “core pathway” toward a cheap, renewable future.

The EU has taken a different approach to subsidised Chinese goods. Citing subsidies, the EU  EU imposed further tariffs on EVs of 35.3% atop existing 10% tariffs in Q1 2025. The UK has no barrier in place on Chinese EVs.

The Chinese Skywell BE11 on a British road. Brands like Zeekr, MG, and Xpeng followed a common market penetration path into Europe. First selling into small markets with high EV adoption rates like Norway, Sweden, and the Netherlands. These countries are often seen as leaders in sustainable practices making the brands reputable by association.

Echoing the ‘feel the stones’ process, the approach also helps EV manufacturers understand European customers before moving forward into the bigger markets of France and Germany. Tariffs have diverted greater attention onto the UK which has become one of the most susceptible markets for Chinese EVs. “Obviously, we need to invest in right-hand drive”, says Lothar Schupet, Acting CEO, Zeekr Europe.

China engages with the anglosphere through investment and trade, signalling state capacity through economic strength and reserving the use of hard power only for its regional prospects in the South China Sea and out to Taiwan.

As a state centralised economy, the economy is directly tied to national security; its markets are the sovereign. The Center for European Reform warns of Xi’s policy of “milituary-civil fusion” where development in technology benefits both the economy and military. Concerns over user data security in Chinese software are escalating as the line between market data and military intelligence blurs.

Europe is in a difficult position between an erratic USA and steadily increasing “epoch-defining challenge” from China as the previous UK government described it. The policy brief outlines how China spreads its techno-authoritarian political will through its market dominance in South Asia and even in Europe. China has repeatedly denied claims of unfair economic play from Europe.

Last July, a spokesperson from the Chinese embassy in the UK urged the EU to seek "a more comprehensive, objective and positive" view of China, for “two-way market openness (...) and avoid politicizing economic issues and overstretching security concepts in normal business cooperation”.

While editing this blog news broke of a UK spy probe into China being dropped. Two British men were accused of spying for China back in April 2024. The case has been dropped however as China was not deemed a national security threat at the time meaning the case does not meet the threshold to be prosecuted under the Official Secrets Act.

A Chinese spokesperson called the claim that China instructed spying “fabricated and malicious slander, which we firmly reject.”

The case has been seen as a blunder in UK national security. For some it indicates the UK’s unwillingness to confront China, “this doesn't really dispel the idea that the government didn't want fireworks around China” said Former BBC security correspondent Gordon Corera.

In related news, China has strongly opposed the UK's sanctions against 11 Chinese entities for supporting the Russian energy sector and supplying critical equipment to Russia's defence sector. Chinese trade with Russia poses the most overt conflict of interest with Europe.

The state owned People’s Daily news states “exchanges and cooperation between Chinese and Russian enterprises should not be interfered with or affected”.

Stunned and informed by China's modernisation, Former U.K. business secretary for the Lib Dems Vince Cable believes cooperation with China is possible and critical. “We should have more interaction over trade and investment, (and) cooperate on global problems, you know, we live on the same planet”

The UK and the EU must collaborate with China, the scale of their trade is too large and involves too many critical resources to decouple from in anything less than a number of decades.

It's difficult to reconcile how climate cooperation and managing increasingly asymmetrical trade relations can be achieved against a backdrop of geopolitical red lines. That is not a task this researcher pretends to have the answers to.

Zheng Zeguang (@AmbZhengZeguang) / X ambassadors twitter.