- When Xi Jinping rose to power in 2012, he saw more than just a booming economy—he saw a ticking time bomb.
- China is on its way to becoming the world’s first “electrostate”, with a growing share of its energy coming from electricity and an economy increasingly driven by clean technologies.
When Xi Jinping rose to power in 2012, he saw more than just a booming economy—he saw a ticking time bomb.
Xi’s first direct order to “revolutionise” China’s energy system came in mid-2014, two years into his leadership. According to state media at the time, Xi told leaders at a key internal party economic working group that China’s energy system suffered from “technological backwardness” and that the country must boost its energy security.
China’s journey to becoming an economic powerhouse had been underpinned by oil and coal. The country has accounted for more than half global oil demand growth for decades. Yet even a decade ago, China’s rate of electrification was ahead of Europe and the US. Since then, those rival economies have seen electricity as a final share of energy plateau at around 22 per cent, while electrification in China has surged to 30 per cent.
China had just overtaken Japan as the world’s second-largest economy and was emerging as the United States’ top nuclear-armed rival.
But beneath the surface of its rapid rise, one glaring weakness threatened its future: a heavy dependence on foreign energy. For a nation of 1.4 billion people with global ambitions, that vulnerability was unacceptable.
Reliance on oil and coal imports had surged to record highs, exposing China to potential supply disruptions via chokepoints in trade channels from the disputed waters of the Taiwan Strait and the South China Sea to the Strait of Malacca and the Indian Ocean.
Today, as Donald Trump’s trade war rocks the world, the view from the CCP’s leadership compound in Beijing’s Zhongnanhai is starkly different. China is on its way to becoming the world’s first “electrostate”, with a growing share of its energy coming from electricity and an economy increasingly driven by clean technologies.
It offers China a strategic buffer from trade decoupling and rising geopolitical tensions with the US. The country is not only rapidly advancing towards self-sufficiency in energy from secure domestic sources, but also wields vast power over the markets for the resources and materials that underpin technologies of the future.
“Nobody had been seriously worrying about energy security or supply chains for armaments and critical industries and food because everyone thought that went with the Cold War,” says Andrew Gilholm, head of China analysis at consultancy Control Risks. “Meanwhile, China has been working on that for years.”
Earlier industrial revolutions were led first by the UK and then by the US, including the so-called information age more recently. But it is China that now leads the latest global technology revolution in electrification and renewable energy, say analysts from US-based energy think-tank RMI and other independent research groups.
Just as oil and gas drive a petrostate’s economy, clean energy technologies are making a significant contribution to China’s growth. This has been particularly welcome for Beijing in the context of a slowing economy.
Clean energy sectors accounted for a record 10 per cent of the country’s GDP and drove a quarter of its growth last year, according to the analysis of official government statistics by the Helsinki-based Centre for Research on Energy and Clean Air. Beyond energy security, electrification — the process of swapping processes and technologies reliant on fossil fuels with electrically powered alternatives — will play a critical role in efforts to tackle climate change.
“We cannot see any way to a zero-carbon economy except through massive electrification,” says Lord Adair Turner, head of the Energy Transitions Commission, an alliance of global companies focused on net zero.
Electricity is “much more efficient in a number of applications”, adds Turner, particularly in road transport and residential heating. China remains the world’s biggest greenhouse gas producer, and its power sector emissions reached a new high last year, driven by a rise in coal consumption. But the advances in electrification mean it stands to make significant progress in cutting emissions if it begins to phase out coal, still the dominant fuel in its electricity mix, despite a surge in renewable capacity additions.
Coal, solar, wind and hydropower make up the majority of China’s total installed capacity, which grew by 15 per cent to over 3,300GW in 2024, and are spread across the country according to geographic suitability and power needs.
China’s Energy Push
China accounts for 80 per cent of coal-fired power under construction globally, with additional plants set to come online near population centres and industrial hubs.
With 70 per cent of the world’s utility-scale solar under construction in China, many of the most ambitious solar projects are clustered inland in regions such as Xinjiang and Inner Mongolia.
Similarly, most wind power in construction is in the north, while offshore projects are dotted along the south-eastern coast.
More than half of the world’s planned hydropower is in China, with projects distributed across most of its central and eastern provinces.
“Many western countries are spending a lot of time and attention on decarbonising electricity generation but are lagging on wider system electrification,” says Marie Claire Brisbois, professor of energy policy at the University of Sussex. Key requirements for electrification such as market adjustments, consumer behaviour changes and interventions in private purchasing decisions have proved easier for Beijing to accomplish, she adds.
China’s advances reflect a hydra of policies aimed at fulfilling Xi’s call for an energy revolution. Beijing has poured hundreds of billions of dollars into the clean tech sector, both to state-owned developers and the private sector, almost five times as much as the US and 15 times Japan.
This sparked a new phase of rapid growth of companies manufacturing wind turbines, solar panels and batteries and those developing green power projects and turbocharging the electrification of the country’s fleet of cars, trucks, trains, ships and factories. The most obvious manifestation of this growth is China’s electric vehicle boom.
This year, domestic EV sales — including pure battery cars and plug-in hybrids — will hit about 12.5mn, more than double that of 2022. This would mark the first time EVs outsell cars with internal combustion engines in a major auto market.