China’s green surge offers a historic chance to meet global climate goals – if the world chooses to collaborate, writes Erik Solheim

A worker cycles past a CATL battery cell factory near Arnstadt, Germany (Image: Martin Schutt / dpa / Alamy)

The global debate over China’s so-called renewable energy “overcapacity” has grown increasingly heated, largely driven by policymakers in the United States and the European Union. This criticism is puzzling: for over a decade, leaders around the world, including from the West, have called for exactly the kind of rapid green expansion China is now delivering.

“Let’s stop subsidising fossil fuels and start supporting the renewables revolution.” That has been the battle cry at nearly every major forum I have attended, from the UN and the World Bank, to the World Economic Forum, since the late 2000s.

Despite these calls, western governments have been slow to ramp up their green industries. Some western car companies even chose to cheat on emissions targets rather than accelerate the shift to electric vehicles (EVs). We in the west should take a long, honest look in the mirror before blaming China for doing exactly what we called for.

From criticism to collaboration

For developing countries, cheap Chinese solar panels mean that, for the first time in global history, there is a green path to prosperity. Historically, countries – starting with the United Kingdom during the industrial revolution – built their economies on fossils fuels, mainly coal. But today, solar power is cheaper than coal in key markets such as China, the US, India and Germany. A developing nation can now save money by switching from coal to solar, facilitating economic growth without assistance from richer nations. Over the past decade, the price of solar energy has fallen by nearly 90%. No one predicted this, and even fewer thought it feasible. This transformation has been driven by fierce competition among leading Chinese solar companies, including Tongwei, Longi, Trina, Jinco and Ja.

When Janet Yellen, US treasury secretary under the Biden administration, described Chinese government subsidies as contributing to excess production and undermining global market resilience, she overlooked the reality of global demand. During recent economically challenging times for China, few industries have remained as attractive to investors as clean energy. Business leaders have closely monitored the sector’s rapid growth, especially in solar production. From a global demand perspective, we face green under-capacity, not overcapacity. As long as products were expensive, demand remained naturally low, but now, with scale, costs have come down and demand continues to rise.

Chinese companies have undoubtedly benefited from the government’s green strategies. However, their investments and expansion are grounded in careful assessments of both domestic and international markets. When Chinese products succeed at home and abroad, the term “overcapacity” becomes irrelevant. On the contrary, there is an urgent need for even greater green investment and stronger demand globally.

China does not suffer from “overcapacity”; rather, it possesses productive capabilities that can greatly benefit the world. The country’s green industrial revolution offers unprecedented opportunities for global climate action. So instead of viewing China’s leadership in green industries as a threat, other countries should recognise it as a powerful engine accelerating the global energy transition – and step up to compete with it.

A global green pathway

Regions like Southeast Asia urgently need pathways to sustainable economic growth. China’s remarkable expansion in solar and EV sectors has been primarily driven by significant technological innovation, which has dramatically reduced costs in response to rising global demand.

A recent visit to Nepal strongly reinforced this viewpoint. The streets of Kathmandu were bustling with electric vehicles, placing Nepal alongside Norway and China as global leaders in EV adoption. Chinese EV dealerships line the city’s main avenues, offering affordable yet advanced technology, powered entirely by domestic hydropower. Replacing imported oil with domestic green energy is a triple win for Nepal: it reduces pollution, combats climate change and frees up funds that could be better spent on health or education.

According to the United Nations, developing countries require approximately USD 1.7 trillion annually in renewable energy investment, yet only USD 544 billion was invested globally in 2022. Far from having too much renewable energy capacity, we urgently need more affordable solutions to bridge this significant investment gap. Renewables must become abundant and cheap enough to silence the outdated “drill, baby, drill” mindset.

As Harvard economist Dani Rodrik puts it: “A glut in renewables and green products is precisely what the climate doctor ordered.”

In Indonesia, collaboration between China’s Trina Solar and local partners has led to the construction of one of Southeast Asia’s largest solar manufacturing plants. This USD 100 million facility has not only created hundreds of local jobs, but has also swiftly advanced Indonesia’s transition to clean energy.

Similarly, Chinese EV plants in Indonesia, Thailand, Türkiye, Uzbekistan, Brazil and many other developing countries are driving industrial upgrading and technology transfer. These partnerships clearly illustrate how China’s vast renewable capacity can empower developing economies, fostering shared prosperity rather than dependency.

Workers assemble an electric vehicle at the BYD factory in Rayong, Thailand (Image: Yomiuri Shimbun / Associated Press / Alamy)

Navigating legitimate concerns

Nevertheless, we must also carefully address legitimate concerns. Leaders in both developing and developed countries have shared apprehensions with me about becoming overly reliant on Chinese clean technology, which could potentially stifle local manufacturing and create long-term trade imbalances. These are valid points. It is only natural and necessary that heads of state prioritise jobs for their own citizens.

The solution lies not in protectionism, but in expanding international cooperation

The solution lies not in protectionism, but in expanding international cooperation. Through meaningful technology transfers, local manufacturing partnerships and capacity-building efforts, China can help other nations develop their own green industries and avoid one-sided reliance while advancing a more equitable global transition.

We need far greater global investment from Chinese clean-tech leaders – from EV and battery giants like BYD and CATL, to renewable energy companies such as Goldwind, Envision, China Three Gorges and all the major solar manufacturers. Last year, Tongwei alone produced more solar cells than the entire historical output of all but five nations. CATL and BYD now dominate the most critical component of the green revolution: electric batteries.

Parallels with global giants like Apple and Samsung help illustrate this point. Apple became the world’s most valuable company by efficiently supplying markets far beyond the US. Likewise, Samsung’s global leadership would have been impossible if it relied solely on its small domestic market in South Korea. Both companies operate with huge “overcapacity” – a key reason why the world has been able to buy their products.

Similarly, China’s renewable energy industry thrives precisely because it serves global markets, not just domestic demand.

China should export more EVs and batteries, build more solar and wind plants, and construct more high-speed rail systems and 5G networks as these technologies are essential to help meet urgent global demand. At the same time, this should be based on mutually agreed trade practices, and nations should legitimately expect technology transfer.

When I visited CATL’s headquarters in Ningde, southern China, it was discussed at length how instrumental BMW had been in the company’s rise. The German carmaker was a demanding customer, sharing best practices and technologies that helped shape CATL’s development. Today, CATL is a global leader and now it, too, should share its technology with the world, including Germany.

It remains unclear what impact trade wars will have on the green transition. Such conflicts make us all poorer and stall urgently needed innovation. There is, however, no indication that China, Europe, India or indeed any other major power will follow the US down this path. They are unlikely to embrace trade wars or slow the momentum of the green transformation. Indian Prime Minister Narendra Modi recently expressed the opposite view, declaring that India can now combine economic growth with ecological responsibility, growing its economy while protecting Mother Earth.

Over time, both the public and businesses in the US will act as counterweights to trade war policies. Companies like Ford and General Motors understand that the future of cars is electric. If they allow themselves to be confined to a domestic market of gasoline SUVs shaped by Trump, they will be the big losers in this technological revolution. Chinese companies will simply capture the global market. After all, no monarch in history could force people to ride horses once cars and trains had been invented.

Ultimately, true climate leadership today is not just about being a manufacturing hub; it is about becoming a committed partner in global development. The urgent transition to a green economy requires tools, technology, financing and expertise – resources China possesses in abundance. But delivering products alone is not enough. China must offer comprehensive solutions tailored to local contexts, creating jobs and opportunities where they are most needed.

The vibrant streets of Kathmandu, filled with EVs, represent not only Nepal’s progress, but also a vision for a greener future across Asia – the continent home to 60% of the world’s population. Rather than erecting barriers or fearing competition, nations should embrace collaboration, drawing on China’s industrial strengths to meet critical global climate goals. The task ahead demands creativity, international cooperation and a shared commitment to a sustainable future. Far from being “overcapacity”, China’s renewable energy potential should be seen as one of our greatest global opportunities.

Erik Solheim is a global leader in environmental and development policy, a former Norwegian minister of Environment and International Development, and past head of UN Environment. He currently serves as president of the Europe–Asia Center in Brussels and holds several advisory and board roles across Asia, Africa and Europe.