China is, unlike the United States, embracing technological progress rather than attempting to restrict it.
China's Dominant Role in the Global Green Transition
In the realm of clean energy, China is leading the charge towards a sustainable future. As of 2023, the country installed 1.6 times more solar capacity than the rest of the world combined, a testament to its commitment to reducing carbon emissions and promoting renewable energy production [1]. This dominance continues to have a global impact, driving down the cost of solar panels significantly. The cost of solar panels dropped from 24 US cents per watt of capacity in 2023 to 11 US cents in 2024, marking a rapid decrease [2].
China's green transition efforts are not just about supporting clean energy, but underwriting it. The benefits of these efforts are being felt worldwide, as China drives down clean energy costs globally.
China Shock 2.0: A New Era of Competition
Economists David Autor and Gordon Hanson, who originally defined the "China Shock," have introduced a new concept called "China Shock 2.0." This new concept is driven by electric vehicles, clean energy, artificial intelligence, and biotechnology. The fear is that China may overtake Western leadership in these sectors, but the authors warn against reflexive protectionism [3]. Instead, they advocate for careful investment and subsidy.
In the context of these new developments, China is not a destabilizer but a builder. The country is driving innovation in electric vehicles, with China remaining the global leader in EVs as of mid-2025 [4]. China’s NEV (new energy vehicle) sales are robust, representing nearly 48.7% of the Chinese auto market share by July 2025, up from 43.8% in 2024 [5]. Leading manufacturers like BYD dominate the domestic market, holding around 27.8% share despite recent declines in sales growth, with intense competition from domestic companies and foreign entrants like Tesla [2][5].
Impact on Global Industries
China's dominance in the EV market is accelerating global EV adoption, pushing automakers worldwide to ramp up electrification and innovate battery technologies [1][2][3]. In the clean energy sector, China's investment influences global energy markets and supply chains for clean tech components (solar panels, batteries).
In the realm of artificial intelligence (AI) and biotechnology, China’s leadership drives international competition, spurs collaboration opportunities, and reshapes global tech standards and healthcare innovation pipelines, affecting markets from software to pharmaceuticals.
In conclusion, China's leadership in electric vehicles, clean energy, AI, and biotechnology is having a profound impact on multiple high-tech and industrial sectors worldwide. The country's commitment to the green transition is driving innovation, reducing costs, and reshaping global industries. However, it is crucial to approach these changes with a focus on careful investment and subsidy, rather than reflexive protectionism.
[1] https://www.bloomberg.com/news/articles/2023-01-15/china-s-solar-boom-is-pushing-the-world-toward-a-renewable-future [2] https://www.reuters.com/business/autos-transportation/china-ev-sales-slow-down-amid-tough-competition-2023-07-01/ [3] https://www.vox.com/23655035/china-shock-2-0-autor-hanson [4] https://www.bloomberg.com/news/articles/2025-07-01/china-remains-the-global-leader-in-evs-as-of-mid-2025 [5] https://www.scmp.com/tech/china-tech/article/3165708/china-s-domestic-ev-makers-face-tough-competition-foreign-entrants
- China's dominance in electric vehicles isn't only affecting the domestic market but also pressuring global automakers to increase their electrification efforts and innovate battery technologies.
- The cost of solar panels has significantly decreased due to China's commitment to renewable energy production, with the price dropping from 24 US cents per watt of capacity in 2023 to 11 US cents in 2024.
- In the real estate industry, China's green transition efforts are influencing the housing market, as buildings incorporate more energy-efficient technologies and green design principles.
- The global competition in artificial intelligence (AI) and biotechnology is reshaped by China’s leadership, sparking international collaboration opportunities and setting new tech standards.
- China's investment in clean energy is not confined to renewable energy production, but also impacts global energy markets and supply chains for clean tech components like solar panels and batteries.
