Renewable Energy but not for Climate Change: How Renewable Energy is Benefiting China

While the United States is returning to oil and gas, China is leveraging its world-leading renewable energy sectors to reduce its energy dependence on foreign nations and to strengthen its international influence. Although China’s rapid development of renewable energy technologies does help address the climate crisis, its main motivation is national energy security rather than environmental concerns. At the same time, China has significantly expanded coal as a backup energy source to further protect its energy future. 

Source: Quang Nguyen Vinh @Unsplash 

Why This Matters 

• Government-led energy policies in China directly influence private sector growth and cross-border deals.  

• China’s strategic focus on renewable energy for energy security shapes global supply chains and investment flows. 

• China’s export and financing of renewable technologies reshapes political and trade relations, creating new markets and risks for companies and investors.

  
  

What energy strategies look like for the United States and China? 

As the U.S. pushes Japan and South Korea to invest in a $44 billion natural gas project and a major U.S. automaker, General Motors, switches plans from electric motors to gasoline engines, China is installing twice as much wind and solar capacity as the rest of the world combined. Although the two superpowers are pursuing different energy strategies, both are primarily guided by economic and national security reasons rather than concerns about the climate crisis. 

The United States, as the world’s largest oil producer and the largest exporter of natural gas, gains economic, geopolitical, and security advantages by maximizing its own energy resources, according to the current administration. China faces a different challenge—it lacks much easily accessible oil and gas relative to its huge population, so it must innovate to secure its energy needs. 

Why is China relying on renewable energy? 

The West’s response to Russia’s invasion of Ukraine has reinforced Beijing’s decision to reduce its dependence on foreign energy. Since 2013, Xi, the President of China, has mentioned “energy security” in at least 180 different speeches, meetings, and other official activities, calling it one of the most important security issues facing the nation. 

How does China reduce its foreign energy dependence? 

China is actively limiting the growth of its oil demand using renewables. The sales of new energy vehicles (NEVs) increase, the popularity of liquefied natural gas (LNG) trucks grows, and China’s high-speed rail network has expanded.  

These combined have avoided oil demand growth of about 15% (1.2 million barrels per day) since 2019. Additionally, a more than 68% drop in new home construction has further curbed oil demand, as construction typically drives both direct and indirect oil consumption. 

How does China benefit from renewable energy internationally? 

China’s investment in renewable energy is not only aimed at reducing its reliance on foreign energy sources at home, but also serves as a powerful tool for expanding its international influence. Today, China dominates in many sectors of the clean energy industry, enabling it to expand its sphere of influence by selling and financing energy technology worldwide. Through these efforts, China is forging decades of financial, cultural, and even military ties with countries across the globe at a time of shifting geopolitical alliances. 

Chinese renewable energy projects are widespread—from supplying nuclear reactors to Turkey, which previously relied mainly on U.S. and European partners, to building wind turbines in Brazil, manufacturing electric vehicles in Indonesia, constructing Pakistan’s largest nuclear plant, and developing Africa’s largest wind farm in northern Kenya. Since 2023, Chinese companies have announced $168 billion in foreign investments in clean energy manufacturing, generation, and transmission. 

As the risks of climate change push more nations to adopt clean energy solutions, falling renewable costs allow China to meet the world’s growing demand for cleaner, cheaper power. This positions China as not just a technology supplier, but as an essential partner in the future energy landscape for countless countries. 

Why is China increasing coal-powered energy, beyond renewable? 

Yet, renewable energy is not yet sufficient to meet all of China’s domestic energy needs. Severe events such as the record heat in summer 2022 and drought in the Yangtze River led to a significant reduction in hydroelectric power output during periods of peak electricity demand. This created major power disruptions in southern provinces like Sichuan, which relies on hydropower for 80% of its electricity. 

In response to these crises, China has doubled down on coal as a backup to ensure security. The country is rapidly expanding its coal-fired power capacity, with 311 new coal-fired power plants under construction as of April 2025—four times more than the total capacity being built in the rest of the world. This sends a clear message—China will continue to aggressively develop clean energy, but not at the expense of a secure and reliable energy supply. For now, the pursuit of renewables is driven as much by the need for energy independence and international influence as by environmental concerns.