BEIJING — China’s booming clean energy sector was the dominant force behind the nation’s investment uptick in 2025, driving more than 90 per cent of total investment growth, according to fresh analysis by environmental economists and industry experts. Far from a niche contributor, renewable energy, electric vehicles and battery technologies have become central pillars of China’s economy, reshaping its industrial landscape and its climate ambitions.
Clean Energy Powers China’s Investment Expansion
Analysis by the Centre for Research on Energy and Clean Air (CREA) shows that clean-energy technologies accounted for the vast majority of China’s rise in investment in 2025, dwarfing contributions from traditional sectors. Solar power, electric vehicles (EVs), batteries and other low-carbon industries collectively underpinned over 90 per cent of the net increase in investment recorded last year — a striking concentration around climate-related industries.
Total output from these industries reached approximately 15.4 trillion yuan (about US $2.1 trillion), equivalent to 11.4 per cent of China’s gross domestic product (GDP), the analysis found. On those metrics, China’s clean-energy economy would rank among the world’s largest national economies, rivaling the GDP of countries like Brazil or Canada.
A Driving Force of GDP Growth
Clean energy’s influence extended beyond investment alone. According to CREA’s analysis, these sectors were responsible for more than a third of China’s overall economic growth in 2025 — a contribution that was essential for Beijing to meet its headline growth target of around 5 per cent for the year. Without the clean-energy effect, China’s GDP would have expanded by an estimated 3.5 per cent instead of the officially reported figure, analysts said.
The clean energy industries also grew significantly faster than the broader economy: annual growth rates in the sector accelerated from roughly 12 per cent in 2024 to around 18 per cent in 2025.
Sector Breakdown: Solar, EVs and Batteries Lead
Within the clean-energy domain, the so-called “new three” industries — solar power, electric vehicles and advanced batteries — were central to the investment surge. These sub-sectors alone generated roughly two-thirds of the value added in the clean-energy economy and attracted more than half of all investment flowing into renewable and decarbonisation technologies.
China’s solar manufacturing and deployment efforts have been particularly notable. By mid-2025, the nation’s photovoltaic capacity had surpassed 1.1 terawatts, making it the largest solar power market globally and a key supplier of panels and components to international markets.
Electric vehicles and battery industries also saw heavy consumer demand and sizeable investment, buoyed by government incentives and competitive domestic production. Rapid growth in energy storage capacities further complemented these trends as China sought to integrate more renewables into its power grids.
Domestic Demand and Export Dynamics
While exports of clean-energy technologies such as solar panels and battery systems are expanding rapidly, the bulk of investment and economic value remains rooted in China’s domestic market. Analysts note that the strong internal rollout of clean technologies has created an ecosystem that supports both manufacturing and consumption, sustaining growth even amid global trade tensions and tariff pressures.
Balancing Growth With Climate Strategy
China’s reliance on green energy as an investment engine aligns with its broader climate goals, which include peaking carbon emissions before 2030 and achieving carbon neutrality by 2060. The shift toward renewables and electrification has contributed to emissions trends, with some data indicating that clean energy expansion helped reduce carbon dioxide output in early 2025.
However, critics point to contradictions in China’s energy policy, where clean-energy advances coexist with continued development of coal and fossil fuel infrastructure. Analysts warn that sustaining long-term economic and environmental benefits requires careful management of overcapacity risks and systemic transitions away from legacy energy sources.
Challenges Ahead for Clean-Energy Momentum
Despite strong performance in 2025, questions remain about the trajectory of China’s clean-energy industries in the years ahead. Some parts of the renewable sector, such as large-scale solar power, have encountered slower growth rates in response to new pricing reforms and market adjustments. There is also debate over whether planned central government targets are sufficiently ambitious to maintain momentum.
The coming 15th Five-Year Plan, expected to be formalised in 2026, is likely to clarify policy priorities for 2026–2030, including the balance between clean energy expansion and broader industrial goals. Early recommendations suggest continued emphasis on innovation, domestic demand and high-quality growth, with green technologies remaining a strategic focus.
Global Implications of China’s Green Investment Boom
China’s clean-energy investment story has broader implications beyond its borders. As the world’s largest producer of renewable capacity and a leading market for electric vehicles and battery technology, China influences global supply chains, cost structures and technology standards. Its domestic evolution shapes competitive pressures in other major economies and contributes to the global transition toward lower-carbon energy systems.
By driving the lion’s share of investment growth at home, China’s green energy sector not only propelled economic expansion in 2025 but also underscored the strategic importance of clean technologies in the future of global economic and energy policy.
