China’s _renewable energy program_ is not a local curiosity. It marks a tu__r__ning point in history with profound consequences for the rest of the globe.

Even though the transition has decades to run, it is already affecting the world with a foretelling of the profound changes to come.

China’s embrace of renewable energy technologies is transforming its economy. Its secondary industry is morphing into tertiary industries as manufacturing comes to be dominated by algorithms and augmented intelligence. At the same time, China is expanding its tertiary sector as it seeks to gain greater involvement in the export and distribution of its industrial products.

The extent of China’s technological and industrial transformation renders irrelevant doubts about the nation’s economic performance that arise with regularity but have never been realised. China will remain the world’s leading manufacturer in most sectors, and with a university sector that now rates better than any other country for STEM (science, technology, engineering and mathematics) education and research, its technological capacity will continue to expand, innovation will increase, and expertise will spread. The economics of renewable energy should increase cost competitiveness, yet still retain export earnings with which to manage a large national debt. China’s importance in the world will consequently continue to expand.

Indeed, China’s evolution into an industrial electrostate is beginning to mirror Great Britain becoming an industrial state in the early 19th century. It sets the benchmarks which others must follow if they wish to remain competitive and influential. This evolution will trigger global repercussions, regardless of Chinese policy.

Although it is projected that more than 50% of China’s electricity will not be generated by low emission sources until about 2030, some of the effects of the transition can already be seen. At present, China consumes about 16% of world petroleum output, with a quarter of its imports being consumed by the light automotive sector. But it is also the world leader in production of electric vehicles, turning out 12.8 million NEVs (new energy vehicles, the Chinese statistical category including plug-in hybrids and battery electric cars) in 2024. By the end of that year sales of NEVs exceeded 60% of the new vehicles market.

China also accounts for 95% of the world’s electric two-wheelers. The spread of NEVs and e-micromobility (electric bikes, trikes and scooters, often replacing cars for short urban trips) is reducing global petroleum consumption by a million barrels a day (around 1% of global oil demand).

Unsurprisingly, China’s oil consumption has already plateaued and is predicted to decline from now on. By 2040, its light vehicle fleet is projected to be 100% electric. The growing role of electrification in other sectors of the economy (reaching 75% low-emissions electricity generation that year) will compound the decline, with demand for petroleum fuels predicted to be only 1 million barrels/day by then.

The loss of this income — about $US70 billion per year at current prices — will disrupt oil-producing nations but will reduce Chinese input costs, improving its competitiveness. The corresponding increase in energy independence will expand China’s options to exploit geo-strategic opportunities.

The performance of China’s automotive sector is already forcing a reshaping of both the global automotive industry and the global petroleum industry.

Colonialism has gone out of style, but China’s global industrial dominance gives it the means to mould the world’s geo-strategic environment. China’s official policy remains to reach net zero greenhouse emissions by 2060, but the speed of its renewable energy expansion gives it more options for climate change abatement diplomacy than most.

It is no longer the pariah of two decades ago, driving up global emissions but, increasingly, the nation likely to first reach net zero. It can now choose to promote more ambitious proposals for mitigating climate change, and can choose to be more assertive in supporting those nations the most threatened by it. All the more useful if those nations are in areas of strategic contest, like the South Pacific.

More useful yet, China’s command of renewable technologies gives it a powerful tool for influence in, and alliance with, developing countries. And China is using it. With references to the Marshall Plan, it is financing the transition of underdeveloped countries to a green economy, switching from coal- and gas-powered projects started a decade ago to Chinese renewable technologies. These can be built quickly and are scalable to local requirements, avoiding the debt trap of earlier Belt and Road over-investment.

In 2024 China installed 24 gigawatts of renewable energy capacity (the equivalent of ~5 nuclear power plants) in Belt & Road countries, doubling the rollout of the previous year. The objective is to bridge the gap between the US$1.7 trillion Third World countries need in annual foreign direct investment and the US$544 million they attracted in 2022.

The symbolism of the Chinese “Marshal Plan” is deliberate. It should see reliable infrastructure, digital communications and new forms of industry extending throughout the third world – using Chinese plant and equipment. As these economies grow, so will the market for Chinese manufactures and services. Along with this will go the growth of the RMB as a global medium of investment. And the extension into the Third World of Chinese renewable technologies will provide China with a platform for climate-related international initiatives that to date have been dominated by Western nations.

There is now a clear-cut contest for global energy dominance between the world’s two economic superpowers. For the time being, the US has elected to stay with fossil energy and the associated technologies that underpinned its economic dominance in the 20th century. By comparison, China is now embracing the emerging low-emission energy technologies that will underpin the 21st century global economy by mid-century or earlier.

By moderating earlier plans to expand electricity generation using nuclear energy and relying instead on the rapid deployment of renewable energy technologies, China has found an optimum approach to providing the energy it needs for future economic development. More than that, it underpins a model of a future economy that no other country can so far emulate. As the model embeds by the middle of the century, other countries will be forced to confront China’s capability. They, including Australia, will be forced to reconsider fundamental policies on how they approach a reshaped world.

The views expressed in this article may or may not reflect those of Pearls and Irritations.