Opinion | Why China’s clean tech glut is a net global positive
September 22, 2024
With senior American officials meeting their Chinese counterparts last week to discuss the effects of China’s manufacturing “overcapacity” on the US economy, it is worth pausing to consider both the significant benefits and concerns over Beijing’s massive and unprecedented expansion of clean energy technology.
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China’s leadership across all facets of decarbonisation, including research and development, investment, manufacturing and deployment, has delivered exceptional economic outcomes at home.
According to analysis published by the Helsinki-based Centre for Research on Energy and Clean Air, 40 per cent of China’s gross domestic product growth was driven by the clean energy industry in 2023, underpinning its continued economic development domestically as the property construction sector slows.
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This has global repercussions. For example, in the solar manufacturing supply chain, China accounts for 93 per cent of the global polysilicon production capacity, a key input for solar panels. Its dramatic scaling-up of production to globally dominant levels has drastically reduced polysilicon prices.
Other nations are struggling to compete. While prices for polysilicon produced outside China have remained high – at around US$21 per kg – within China, this has fallen to US$4-US$5 per kg.
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