China’s Green Leadership Is Here to Stay - How Should the World Work With It?
Why this matters now
When the world discusses climate and energy, China stands at the center of both hope and controversy. With Trump’s remarks at the UN and Xi’s climate promise that followed, the reality feels so close, almost unavoidable.
Yes, it leads in solar, batteries, and EVs; yes, coal inertia and trust concerns remain.
But the deeper truth is this: China hasn’t just built products; it has built capacity - grid, storage, market rules, and increasingly, governance.
The strategic question is no longer “Is China leading?” It’s “How do we work with that leadership to accelerate a just, bankable, and verifiable transition?”
1) What China actually built (and why it matters beyond China)
Over the past two years, China has crossed structural thresholds that change the global timeline:
- Scale → System: In 2024, China installed a record ~357 GW of wind and solar; by March 2025 wind+solar overtook thermal in installed capacity for the first time. Scale is no longer a headline—it’s the operating environment. AP News+1
- Infrastructure → AI era readiness: The energy-hungry AI wave makes grids, storage, and siting rules strategic. China is investing in the power sector at a rapid pace, enabling data-center demand to be matched by renewable growth and grid expansion, with shorter project lead times compared to its peers. In parallel, policies for new data centers require very high renewable shares—anchoring demand for clean power. Wood Mackenzie+1
- Narrative → Market reality: A leading climate investor put it bluntly this year: “For the foreseeable future, the energy transition comes with a Made in China stamp.” Whether one cheers or worries, the market signal is unambiguous. Generation Investment Management
Why this matters globally: AI and the clean transition are converging.
As AI pushes electricity and water footprints up (US data centers alone could reach 6.7–12% of national electricity by 2028, with water use doubling or quadrupling vs. 2023), countries that can supply low-carbon, reliable power at scale will shape where value is created.
China’s system build-out, if coupled with credible governance, can be a lever for global decarbonization, not just domestic growth. IEEE Spectrum
2) The hard edges we shouldn’t gloss over
This is not a fairy tale. Three frictions define cooperation:
- Coal’s inertia: After a record renewables boom, coal approvals and builds also rose in 2024–2025. Beijing frames this as “insurance” for reliability while grids and storage catch up. The world hears mixed signals; both are true. The policy challenge is accelerating flexibility (storage, demand response, interconnection) so coal’s role shrinks in practice.
- Integration gap: Renewables now dominate capacity, but utilization and curtailment remain uneven across provinces. This is where cooperation on market design, CfDs, and grid codes matters more than another gigawatt press release.
- Trust and comparability: China’s ETS expansion to steel, cement, polysilicon, and ≥80% renewable power requirements for new data centers are important steps, yet international partners still ask: Are MRV standards comparable and independently verifiable? Good projects must be built for scrutiny from day one. Reuters
3) A regional answer taking shape: a China–ASEAN clean energy–industrial mechanism
ASEAN’s clean-energy sector is expanding quickly, with China as a dominant investor. But fragmented policies, weak labor safeguards, and fragile supply chains risk trapping the region in low-value roles.
An institutional mechanism can flip the script: align investment, skills, and governance, embed environmental & social safeguards, and ensure ASEAN captures durable strategic value (not just cheap kit). East Asia Forum
What could this mechanism actually do?
- Labor & skills as the anchor: Convene thematic working groups; fund regional training hubs; co-design curricula with industry and universities; tie workforce upgrading to formal institutional commitments. This turns “capacity” into local capability and raises quality across the value chain (yes, "train, baby, train!"). East Asia Forum
- Rules as market magnets: Converge on MRV templates, renewable consumption standards, and grid interconnection protocols, so projects are bankable across borders rather than bespoke in every province.
- Safeguards by design: Bake ESG, labor, and recycling standards into contracts, preventing a race to the bottom while reducing legitimate concerns about overcapacity and quality.
This is how we move from “China leads, others react” to co-shaping the transition’s institutions. Easier said than done, right? East Asia Forum
4) What the world can learn from China’s state-to-system playbook
China’s top-down capacity to set direction, align ministries, and mobilize capital is often misunderstood as monolithic.
In practice, the “whole-of-nation” approach creates rapid iteration loops between policy, industry, and infrastructure.
The lesson isn’t to copy the model; it’s to ask: How do we adapt elements that work, speed, supply-chain orchestration, integrated siting of power and load—into our own institutions?
Recent policy moves that outsiders can engage with: renewables standards for heavy industry, data-center green power mandates, and utilization-focused planning (not just installation targets).
These create credible demand signals for clean power, storage, and flexibility assets that global partners can finance and help deliver. Reuters+1
5) Field notes from a bridge-builder (Qi Lu, Partner at Tsing Capital)
Edited for clarity from a recent conversation.
On strengths: “Three chains matter: the solar–battery–storage chain that integrated manufacturing with O&M; energy management & water treatment for industrial users; and AI-empowered low-power solutions. These were forged in a 20-year domestic stress test from China.”
On trust: “International teams, third-party MRV, and securities-grade disclosure from day one. You don’t ask the market to trust you, you earn it.”
On localization: “Don’t drop a ‘China 4.0’ package into a ‘1.0/2.0’ market. Sequence it: maintainability → bankability → grid compatibility. Commit to cross-cultural understanding, people and training; that’s the differentiator.”
On vehicles: “Build joint funds, zero-carbon parks, and trust clauses into contracts so capital, technology, and local government are aligned from the start.”
One-liner: “Don’t fear China, don’t idolize it. Translate engineering muscle into governance muscle, then cooperation happens.”
6) Cooperation, not coursework: a pragmatic playbook
If we accept that China’s green leadership will persist, the task is to turn capacity → capability → trust together. Yes, you heard it right, we can aim for a "Win-win".
Here’s a doable cooperation stack that can be used on real projects:
- Key RFP metrics include cost (LCOE), utilization, storage hours, and lifecycle carbon — all defined upfront as mandatory criteria. China Briefing
- MRV by design: Open data feeds + ISO-aligned protocols + third-party verification embedded in EPC and O&M contracts.
- Financeable offtake: Use PPAs/CfDs/green certificates to anchor cash flows and “greenness,” especially for data centers and large loads. Reuters
- Localization pathways: Commit to training hubs, local spare-parts logistics, and bilingual and cross-cultural documentation; track local-content and quality metrics. East Asia Forum
- Regional alignment: Where ASEAN is the theater, use a China–ASEAN mechanism to standardize grid codes, labor safeguards, and recycling standards, so projects scale regionally, not just bilaterally. East Asia Forum
7) Investment & governance signals to watch
- Utilization-first planning: China’s policy focus is shifting from simply “adding more capacity” to actually “using clean power” through grid upgrades and sector electrification, which is a positive sign for real-world decarbonization. China Briefing
- Ambition vs. credibility: Experts say China can easily exceed its new 2035 targets, but real credibility depends on how much coal is still running, how much curtailment is reduced, and how reliable its MRV system is, not on big slogans. Reuters
- Global sentiment: The world’s mood is changing. From admiration to protectionism. The debate is no longer about “who exports more solar panels,” but about who can deliver verifiable clean energy systems. If the global conversation is steered toward standards and governance, cooperation becomes rational, not ideological. 卫报
8) The bigger invitation (from me to you)
This newsletter is not about praising or scolding a country.
It’s about using what exists. China’s speed, scale, and state capacity to solve shared problems responsibly. If we harness the model correctly through joint rules, joint skills, and joint safeguards, China’s green leadership can be a global public good, not a zero-sum threat.
I’m building a circle of bridge-builders across China, ASEAN, and the wider world: policy-makers, utilities, grid operators, data-center developers, water/steel/cement decarbonizers, financiers, auditors, standard-setters, and cross-border innovators.
If you or your organization has genuine sustainability expertise and a project (live or planned) that could benefit from this co-build approach, reach out. Let’s prototype trust, on paper and on the ground, and unleash China’s green leadership potential for net zero.
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Further reading & sources
- East Asia Forum on a China–ASEAN clean energy–industrial mechanism (skills, safeguards, governance alignment). East Asia Forum
- Reuters: Wind+solar capacity surpasses thermal in China (April 2025). Reuters
- AP: China’s record ~357 GW wind+solar additions in 2024. AP News
- Wood Mackenzie: Powering China’s data centres—growth outpacing and enabling AI demand. Wood Mackenzie
- Reuters: China’s new renewable standards for heavy industry; ≥80% green power for new data centres. Reuters
- IEEE Spectrum: AI’s electricity & water footprints are rising fast—why clean grids and cooling matter. IEEE Spectrum
- Generation Investment Management (2025): The transition carries a “Made in China” stamp—for now. Generation Investment Management
- China Briefing: From installation to utilization—China’s plan emphasizes using clean power and sectoral integration. China Briefing
- China Briefing (2025): China’s 2035 climate pledges (first economy-wide absolute reduction target). China Briefing