A solar farm near Shijiazhuang city, in northern China's Hebei province, on Nov. 10, 2023.Ng Han Guan/The Associated Press
China’s clean energy sector accounted for the largest portion of the country’s economic growth in 2023, according to a report by global research agency released on Thursday, contributing 40 per cent of the its economic expansion last year.
The findings, published in an analysis by the Finland-registered Centre for Research on Energy and Clean Air (CREA), underscore the scale of China’s investment in renewable energy infrastructure, which totalled $890-billion last year, nearly equal to global investments in fossil fuel supply for 2023.
Clean energy, comprising renewable energy sources, nuclear power, electricity grids, energy storage, electric vehicles (EV) and railways, accounted for 9.0 per cent of China’s GDP in 2023, up from 7.2 per cent the previous year.
The increased share came mostly from the solar, EV and energy storage sectors. China’s solar sector grew by 63 per cent to 2.5-trillion yuan ($474.8-billion) in 2023. EV production grew by 36 per cent.
The rapid expansion of clean energy and its weight in the economy was amplified by the ongoing slowdown in China’s property sector. Capital, including bank loans and government spending, was reallocated from real estate to high-end manufacturing, representing a “major pivot” in the country’s macroeconomic strategy, CREA said.
In 2020, Beijing announced a set of targets to achieve peak emissions by 2030 and carbon neutrality by 2060. The government committed to construct 1,200 gigawatts of renewables capacity by 2030 to support this, but China is on track to meet that goal five years early.
The sector risks overcapacity, however, if its growth rate is maintained as there is a limit to how much China’s domestic economy can absorb, the CREA report noted.
Low-priced Chinese exports of EVs, batteries and solar panels have already stoked concerns over dumping from China’s trade partners, leading to calls for customs authorities to consider taking protectionist measures.