In a remarkable revelation, clean energy emerged as the powerhouse propelling China's economic growth in 2023, according to a comprehensive analysis by Carbon Brief. The country's massive investments in renewable energy sources like solar and wind power led to strong GDP growth last year, even as the global economy struggled. When considering the production value, clean energy sectors contributed a remarkable CNY 11.4 trillion (approximately US$1.6 trillion) to the Chinese economy in 2023, marking a significant 30% increase compared to the previous year.
Perhaps most strikingly, clean energy sectors emerged as the primary engine driving China's overall economic growth, accounting for a staggering 40% of the expansion in GDP for the year. Without the substantial growth witnessed in clean energy sectors, China's GDP would have fallen short of the government's target growth rate of "around 5%," with growth projected at a mere 3.0% instead of the achieved 5.2%.
Delving into sector-specific insights gleaned from official data, industry sources, and expert analysis, the report underscores the monumental surge in investment witnessed across various clean energy domains. Notably, the "new three" sectors of solar power, EVs, and batteries have spearheaded this transformative growth trajectory.
Key highlights from the analysis include a staggering 40% year-on-year increase in clean energy investment, amounting to a staggering CNY6.3 trillion (or approximately US$890 billion). This surge in investment not only accounted for the entirety of investment growth within the Chinese economy but also rivaled global investments in fossil fuel supply for the same year.
According to data released by the National Energy Administration, China has achieved a remarkable milestone in its energy landscape, with newly commissioned energy storage projects boasting a cumulative installed capacity of 31.39GW by the end of 2023. This figure represents a staggering growth of over 260% compared to the previous year-end and nearly ten times the capacity recorded after the "13th Five-Year Plan" (2016-2020). Such exponential growth underscores the burgeoning significance of energy storage as a pivotal component of China's evolving energy infrastructure.
The surge in investment in new energy storage projects has propelled technological advancements and catalyzed economic expansion. Since the initiation of the "14th Five-Year Plan," this burgeoning sector has directly spurred economic investments exceeding CNY100 billion(approximately US$13.9 billion), fostering a dynamic ecosystem that extends across the industry supply chain. Indeed, it has emerged as a potent "new driving force" propelling China's economic development into uncharted territories.
This surge in clean-energy investment coincided with a consecutive decline in China's real-estate sector, underscoring the growing importance of clean energy in energy and climate endeavors and broader economic policies.
The global impact of China's clean-energy manufacturing boom is undeniable, with dramatic reductions in EV, solar panel, and battery prices. This price decline has facilitated faster adoption of clean-energy technologies globally.
While the rise in clean-energy investment signals a significant economic driver, concerns loom regarding potential overcapacity, prompting questions about the sustainability of China's investment-driven economic model.
China's dominance in clean-energy supply chains solidifies its position as a global leader in the sector. Other countries face a choice between benefiting from China's low-cost supply or investing in building alternative supply chains, which could entail subsidies and import tariffs to compete against Chinese suppliers.
