{"id":61779,"date":"2025-03-24T01:23:02","date_gmt":"2025-03-24T01:23:02","guid":{"rendered":"https:\/\/energytracker.asia\/?p=61779"},"modified":"2025-03-24T01:23:07","modified_gmt":"2025-03-24T01:23:07","slug":"china-gdp-breakdown-clean-technology-sectors-driving-economic-growth","status":"publish","type":"post","link":"https:\/\/energytracker.asia\/china-gdp-breakdown-clean-technology-sectors-driving-economic-growth\/","title":{"rendered":"China GDP Breakdown: Clean Technology Sectors Driving Economic Growth"},"content":{"rendered":"
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China’s GDP<\/strong> growth is increasingly driven by the clean energy sector, reflecting the country’s shift toward sustainable development. Commentators have been doubting how China\u2019s climate commitments and green energy transition progress would fare in a situation of geopolitical and economic uncertainty. The latest report by the Centre for Research on Energy and Clean Air (CREA) not only proves that China remains firm in advancing its decarbonisation but also that the government now considers the clean technology sector integral for GDP growth. Alternatively, green technology industries have become a cornerstone in domestic policy decisions and China\u2019s mission to lead global clean technology development, regardless of the economic and geopolitical environment.<\/p>\n\n\n\n

For Southeast Asia, the developments in China can open an array of opportunities to fuel economic growth, guarantee energy security and ensure a more prosperous future.<\/p>\n\n\n\n

CREA: Clean Technology Sector Contributed to Over 10% of China\u2019s GDP<\/strong> in 2024<\/strong><\/h2>\n\n\n\n

The latest analysis from CREA for Carbon Brief<\/a>, finds that the clean energy technology sector generated over 10% of China\u2019s GDP<\/em> in 2024, with sales and investments reaching USD 1.9 trillion. China\u2019s USD 940 billion clean energy investment in 2024 saw a 7% year-on-year increase, almost equalling global investments in fossil fuels.\u00a0<\/p>\n\n\n\n

Together, electric vehicles (EVs), batteries and solar power referred to as \u201cthe new three,\u201d drove 75% of the country\u2019s GDP growth in 2024 (up from 40% in 2023), surpassing real estate and agriculture. The sectors also attracted over 50% of investments overall, growing three times as fast as the Chinese economy overall.<\/p>\n\n\n\n

EVs and Vehicle Batteries<\/strong><\/h3>\n\n\n\n

Making up an estimated 39%<\/a> of China\u2019s clean-energy economy, EVs and vehicle batteries were contributors in the past year. Production of EV batteries and plug-in hybrids, which China refers to as \u201cnew energy vehicles\u201d (NEV), held the largest share. Investments in NEVs and battery manufacturing followed, while investments in EV production facilities saw an 11% growth.<\/p>\n\n\n\n

In total, China manufactured over 13 million NEVs in 2024, marking a 34% on-year growth. Around 22% of the production was exported (6.7% on-year growth), with plug-in hybrids witnessing a staggering 190% surge in overseas deliveries. Domestically, NEVs comprised 41% of total vehicle sales in 2024, up from 32% in 2023.<\/p>\n\n\n\n

The domestic EV sales growth was enabled by factors, such as the government\u2019s vehicle replacement policies and the growing popularity of EVs. Innovations in EV technology, such as faster charging times and improved range, were instrumental in increasing market acceptance. EVs have also become more affordable, with the average sales price dropping 8% on year.<\/p>\n\n\n\n

EV charging also saw significant growth fueled mainly by substantial infrastructure investments. Throughout 2024, China added over 4.2 million charging stations, a 20% on-year increase, and has 12.8 million units today.<\/p>\n\n\n

\n
\"Electric
Source: Carbon Brief<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n

Solar and Other Clean Power Generation<\/strong><\/h3>\n\n\n\n

The scale and speed at which China deployed clean energy in 2024 was once again remarkable. With 68 GW in solar and 29 GW in wind power added just in December 2024, it installed more capacity in a month than a country like Indonesia targets for the next 15 years, for example.<\/p>\n\n\n\n

In fact, solar power proved the biggest clean energy contributor to China\u2019s GDP after EVs and batteries, generating USD 390 billion in economic output.<\/p>\n\n\n\n

The analysis finds that over the past five years, Chinese investments in new solar power capacity have jumped tenfold. In 2024, it again broke records in solar deployment, adding 277 GW of new capacity, or 28% in on-year growth. Rising commercial electricity prices and China\u2019s determination to meet energy-saving and carbon reduction targets motivated the move.<\/p>\n\n\n

\n
\"Solar
Source: Carbon Brief<\/a><\/figcaption><\/figure>\n<\/div>\n\n\n

CREA\u2019s report finds that China\u2019s solar manufacturing capacity in 2024 rose by 29% compared to <\/a>2023. Solar cell production jumped 16%, which the analysts consider a sign of manufacturing capacity additions exceeding demand. As a result, they expect investments in such infrastructure to slow down in the coming years until overcapacity eases.<\/p>\n\n\n\n

Wind, hydropower and nuclear collectively contributed USD 264 billion to China\u2019s GDP, 14% of clean technologies’ total contribution to GDP. Hydropower was responsible for around two-thirds of the economic output.<\/p>\n\n\n\n

Wind power generation jumped 14%, while hydropower production increased 11%.<\/p>\n\n\n\n

Electricity Grids and Storage<\/strong><\/h3>\n\n\n\n

Electricity grids and storage saw a 19% on-year growth, generating 9% of clean technologies\u2019 total contribution to GDP in 2024.<\/p>\n\n\n\n

Power grid investments had the biggest share, followed by investments in energy storage. In fact, CREA\u2019s analysis notes that China\u2019s installed electricity storage capacity growth rivalled the increase in coal- and gas-fired power generation capacity for the first time on record.<\/p>\n\n\n\n

With close to 40 GW of battery storage additions (70% increase on year), grid-connected capacity reached 74 GW.<\/p>\n\n\n\n

In 2024, China\u2019s grid length reached 40,000 km and a transmission capacity of 300 GW. An additional 12 lines remain under construction.<\/p>\n\n\n\n

Clean Energy Technologies Proving Critical For China’s Economy and GDP Growth<\/strong><\/h2>\n\n\n\n

According to CREA\u2019s analysts, clean-energy sectors proved indispensable for meeting China\u2019s key economic targets for the second year in a row. In 2024, the country was only able to hit its 5% GDP growth<\/a> thanks to the growth in clean technologies. Without the sector\u2019s contribution, the country\u2019s GDP would have expanded by 3.6% instead of 5%<\/a>. <\/p>\n\n\n\n

CREA\u2019s analysis<\/a> also finds that the value of electricity generated from solar increased by 40% in 2024. In total, the value added by clean energy industries contributed 17% of nominal GDP growth. The sector\u2019s growth also contributed to dropping prices and fueling China\u2019s deflation.<\/p>\n\n\n\n

Furthermore, despite arguments that the growing power demand from the clean energy technology sector\u2019s boom is increasing China\u2019s emissions, CREA\u2019s analysis finds that the production of EVs, batteries and solar was responsible for just 3.5% of China\u2019s CO2<\/sub> emissions and 0.9% of emissions growth in 2024. In total, the sectors contributed just 0.5% out of the overall 6.8% increase in China\u2019s electricity demand in 2024. <\/p>\n\n\n\n

Southeast Asia Can Capitalise on China’s Green Technology Sector Know-how<\/strong><\/h3>\n\n\n\n

\u201cChina\u2019s consistent prioritisation of renewables development is bearing fruit \u2014 benefitting the country and future clean technology trade partners in developing and emerging countries,\u201d explains Katherine Hasan, analyst at CREA.<\/p>\n\n\n\n

According to Hasan, Indonesia is a case in point. The country emerged as one of the primary export markets for Chinese EVs. Furthermore, in November 2024, it also struck a USD 10 billion deal<\/a> with China focusing on clean technologies, signalling aspirations to deepen a bilateral partnership. If Indonesia updates its national clean energy targets to take advantage of its vast untapped potential and align with President Prabowo Subianto\u2019s vision to phase out fossil fue<\/a>ls<\/a> by 2040, it can emerge as a top destination for Chinese clean technology investments in the region. Furthermore, scaling up renewables expansion targets would help Indonesia accelerate the development of domestic manufacturing, securing the economic benefits the country needs to realise the ambitious growth projections.<\/p>\n\n\n\n

\u201cSince the world\u2019s largest clean energy industry is well able to deliver much faster and more effectively, it is only right that Indonesia\u2019s ambition should be well matched \u2013 perhaps even raised,\u201d notes CREA\u2019s lead analyst and cofounder Lauri Myllyvirta.<\/p>\n\n\n\n

Other Southeast Asian countries should take note and strategically align their national ambitions, taking advantage of potential opportunities to accelerate their energy transition by partnering with China.<\/p>\n\n\n\n

\u201cCountries looking to expand domestic manufacturing of clean energy technologies to secure economic gains should pay close attention to China\u2019s speed and scale<\/a>,\u201d <\/em>said Myllyvirta. <\/em><\/p>\n\n\n\n

According to CREA, the combination of increased supply and falling prices across clean energy technology sectors is not only rapidly accelerating deployment in China beyond expectations but also catalysing clean energy deployment in new overseas<\/a> markets.<\/p>\n\n\n\n

A Mutually Beneficial Partnership That Is Already Bearing Fruit<\/strong><\/h3>\n\n\n\n

In light of the tariffs and trade wars from the EU and the US on Chinese EVs and other green technologies, Southeast Asia is naturally emerging as China\u2019s most important market for clean technology exports and manufacturing. <\/p>\n\n\n\n

Today, China is Southeast Asia’s largest single source of international renewable finance<\/a>. Plans reveal that the government aims to continue advancing the development of the EV market on a global scale, but even more notably in Southeast Asia, where Chinese automakers hold over 70%<\/a> of the market share. Chinese investments in the critical minerals supply chain, of which it currently controls 80%<\/a> globally, will also see a significant increase, particularly in Southeast Asia.<\/p>\n\n\n\n

Countries like Vietnam, Thailand and Malaysia, for example, have successfully scaled up solar panel manufacturing<\/a>, becoming the next biggest producers globally after China. According to analysts<\/a>, the meteoric rise of Southeast Asia’s solar industry has been partly due to Chinese investment. <\/p>\n\n\n\n

Vietnam is also already manufacturing EVs<\/a> domestically, while Thailand welcomed the first EV factory<\/a> in Southeast Asia of the world\u2019s largest EV producer, China’s BYD. As more evidence of the increasing cooperation between Southeast Asia and China, Malaysia\u2019s automobile manufacturer Proton has partnered<\/a> with China\u2019s Geely Auto. As a result of the partnership, the latter would gain access to the regional market, while the former would enhance its product range with new technologies.<\/p>\n\n\n\n

Still, Southeast Asian nations should do better on the policy front by introducing more incentives to lure foreign clean technology investors. Despite China\u2019s strong regional investments, for every dollar going to fossil fuels in Southeast Asia, just USD 0.80 goes to clean energy<\/a>, way below the global average. The Chinese government\u2019s economic stimulus measures offer a blueprint for supporting investments in the clean energy sectors as a means to enhance investment growth and boost economic expansion.<\/p>\n\n\n\n

A Green Technology Partnership Between China and Southeast Asia Is of Regional and Global Importance<\/strong><\/h2>\n\n\n\n

Despite the moves of the US government against the global energy transition and the denial of climate science<\/a>, the global decarbonisation journey is well underway. In 2024, the ratio between investments in clean energy and fossil fuels reached 10:1<\/a>, with China as the main engine. The country has almost single-handedly established Asia as the only region<\/a> on track with the global goal of tripling renewable energy capacity by 2030. By the decade\u2019s end, China will have over half<\/a> of the world\u2019s renewables.<\/p>\n\n\n\n

The country, which is filling the void left by the US and proving the world\u2019s biggest hope in averting a climate catastrophe, is likely to demonstrate further growth in clean energy investment in 2025 as major projects race to finish before the end of the 14th five-year plan<\/a>. The growth beyond 2025 would depend strongly on the new targets and policies in the next five-year plan, which will be finalised this year.<\/p>\n\n\n\n

As a region with a front-row seat to China\u2019s progress and know-how, Southeast Asia can unlock the benefits of the global energy transition, including economic gains, energy security and a brighter and healthier future for its population.<\/p>\n\n\n\n

Prioritising clean technologies in national investment and electricity plans is a crucial first step to overcoming current limitations<\/a>, such as limited private sector involvement, inadequate grid infrastructure, complex land acquisition and non-transparent permitting processes. Another essential lesson from China\u2019s playbook would be reducing coal demand, which, according to the IEA<\/a>, is projected to grow only in India and ASEAN nations. Reversing the trend and ensuring that coal and gas are complementary to renewables would accelerate Southeast Asia’s transition to a cheaper, cleaner and more secure energy supply. Doing so would also unlock funds for much-needed areas, including climate change adaptation, loss and damage and building resilience.<\/p>\n\n\n\n

Ultimately, a closer partnership between China and Southeast Asia can strengthen economic ties, enhance regional resilience and promote sustainable development. Importantly, it would set a powerful example of what economies can achieve when they come together for the common good.<\/p>\n","protected":false},"excerpt":{"rendered":"

China’s GDP growth is increasingly driven by the clean energy sector, reflecting the country’s shift…<\/p>\n","protected":false},"author":14,"featured_media":61818,"comment_status":"closed","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[366,15,87],"tags":[42,310,643,173],"hashtags":[],"class_list":["post-61779","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-china","category-features","category-renewable-energy","tag-china","tag-energy-transition","tag-ev","tag-renewable-energy"],"acf":{"custom_author_name":"","article_pdf_file":{"ID":61828,"id":61828,"title":"Clean Technology Sectors Now Integral to GDP Growth in China","filename":"Clean-Technology-Sectors-Now-Integral-to-GDP-Growth-in-China.pdf","filesize":468858,"url":"https:\/\/energytracker.asia\/wp-content\/uploads\/2025\/03\/Clean-Technology-Sectors-Now-Integral-to-GDP-Growth-in-China.pdf","link":"https:\/\/energytracker.asia\/china-gdp-breakdown-clean-technology-sectors-driving-economic-growth\/clean-technology-sectors-now-integral-to-gdp-growth-in-china\/","alt":"","author":"14","description":"","caption":"Clean Technology Sectors Now Integral to GDP Growth in China","name":"clean-technology-sectors-now-integral-to-gdp-growth-in-china","status":"inherit","uploaded_to":61779,"date":"2025-03-06 10:12:30","modified":"2025-03-06 10:12:39","menu_order":0,"mime_type":"application\/pdf","type":"application","subtype":"pdf","icon":"https:\/\/energytracker.asia\/wp-includes\/images\/media\/document.png"},"poll_vote":0,"manage_the_date":"global","show_in_lastest_from_the_region":"0","order":"","short_desc":"CREA finds that, without the contribution of the green technology sector, China would have failed to meet its 5% GDP growth target in 2024. Capitalising on China\u2019s leadership in green technology development and deployment could ensure Southeast Asia's position on a pathway to a more sustainable and prosperous future.\u00a0
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