China’s Clean Energy Transition: A Global Economic Transformation
China’s clean energy transition is nothing short of revolutionary, fundamentally reshaping the economics of energy across the globe. As the world’s largest energy consumer and a key player in greenhouse gas emissions, China’s shift towards renewable sources is pivotal not only for its own future but for the entire planet. The accelerating deployment of renewables, enhanced grids, and energy storage tech is serving a dual purpose: helping China peak its fossil fuel use while simultaneously driving down costs and amplifying the adoption of clean electro-technologies worldwide. This intricate dance of developments is setting the stage for global energy-related fossil fuel use to peak and eventually decline.
In recent years, China’s dedication to renewable energy has gained remarkable momentum. In 2024, electricity generation from wind and solar jumped by 25% compared to 2023. By the first half of 2025, this growth expanded to a staggering 27% compared to the same period the previous year. These figures are not just numbers; they’re part of a larger narrative where fossil fuel generation has already begun to dip, showing a 2% decline compared to H1 2024. By June 2025, wind and solar collectively generated over 2,073 terawatt-hours (TWh) of electricity, surpassing all other clean sources—nuclear, hydro, and bioenergy—combined, which generated 1,936 TWh. This marks a significant shift from just four years ago when wind and solar produced half as much as other clean sources together.
The backbone of this transformative shift is an unprecedented level of investment in clean energy, energy storage, and robust transmission grids. In 2024 alone, China’s spending on clean energy reached $625 billion, accounting for an impressive 31% of the global total of $2,033 billion. The country’s investment in battery storage tripled over three years leading up to 2024, highlighting its commitment. Furthermore, grid investments soared to an all-time high of 608 billion RMB (approximately $85 billion USD), marking a significant increase from 486 billion RMB ($68 billion) in 2019. These financial commitments are not only driving internal changes but are also influencing global energy markets.
This energy transformation transcends the electricity sector; it is reshaping end-use sectors across the board. By 2023, electricity emerged as the predominant energy source in buildings and surpassed coal to become the primary energy source for industrial applications. While oil-derived fuels still dominate the transport sector, the rapid growth of China’s electric vehicle (EV) fleet is promising. The share of electricity in final energy demand across the broader economy has been on an upward trajectory, reaching 32% in 2023, positioning China ahead of many mature economies.
The motivation behind China’s energy shift is multi-faceted. Insights from experts indicate a growing recognition within China that the era dominated by fossil fuels is no longer viable. The government’s ambition to cultivate an ‘ecological civilization’ aims to harmonize economic, social, and environmental objectives—a vision that finds its roots in the nation’s Constitution, revised in 2018. This framework is not merely symbolic; it represents a robust strategy intended to address modern-day challenges while simultaneously laying the groundwork for sustainable development.
Moreover, this clean energy transition is diminishing China’s reliance on imported fossil fuels, thereby enhancing energy security. It’s also lowering energy costs and catalyzing economic growth and job creation. In 2024, investment and production in the clean energy sector contributed a staggering 13.6 trillion RMB (around $1.9 trillion) to the national economy—equivalent to about 10% of China’s GDP, matching Australia’s entire GDP. Remarkably, this sector is expanding at a rate three times faster than the general Chinese economy, underscoring its transformative potential.
The remarkable shift is further reflected in China’s growing innovation footprint in clean energy technologies. Chinese companies now represent approximately 75% of global patent applications in this sector, a dramatic rise from a mere 5% in the year 2000. This vibrant ecosystem of research, development, and technological advancement points to a strong buy-in from businesses, eager to capitalize on the green energy revolution.
Finally, the ripple effects of China’s investments in clean energy are being felt across the globe. Dramatic reductions in costs for key technologies—such as wind turbines, solar panels, energy storage systems, and electric vehicles—are now benefiting not just China but also emerging markets. These regions are beginning to outpace many OECD countries in both wind and solar generation share and in their overall electrification efforts, illustrating how interconnected the clean energy landscape has become.