Winds of change gust through China’s green politics

Donald Trump has made it clear he has no intention of playing a global leadership role in green energy or a move towards net zero. While the US president is stepping back and Washington is deregulating its fossil fuel industry, Beijing is stepping up.

China sees an opportunity to write a green rulebook for the world’s low-carbon economy. And who makes the rules tends to wield a fair amount of power. Already it dominates green energy supply chains, from solar panels, wind turbines, storage systems and electric vehicles.

The recent rollback by the US puts the world’s second-largest economy in a strong position to drive a further shift in where the world looks for green products that meet global standards – and what those standards are.

China’s most likely move is to scale up a credible monitoring, reporting and verification system across heavy industry, so carbon emissions can be priced, compared and audited.

Battery passport

The European Union has just introduced new rules to address “carbon leakage” where companies move production and pollution out of the region. This means that they will have to purchase certificates showing how much carbon has been produced when importing goods.

The United Kingdom has plans to follow suit. Market access is being rewritten around documentation. Exporters that can certify carbon content gain an edge over those that cannot.

Under other EU rules, a digital “battery passport” becomes mandatory from February 2027. It will cover EV and industrial batteries above two-kilowatt-hours.

While China does not control access to the European market, it can make it easier for the rest of the world to comply with EU-style requirements. It can do so by standardising the infrastructure and tools that firms need to comply with rules in Europe.

Once a factory is plugged into a particular compliance system, switching is costly. Beijing can also leverage its supply chain dominance and digital infrastructure to sell traceability tools, reporting templates, verification services and management platforms.

Another factor is that in the next few years firms will be expected to publish more consistent, investor-oriented sustainability and climate information. This will allow investors to compare climate exposure and performance across companies and countries.

China has been strategically transforming into a clean energy superpower since the Paris agreement, where 195 countries agreed to tackle climate change. This part of China’s economy was worth US$ 2.1 trillion, or 11.4% of GDP, in 2025.

Climate summit

The country’s investment in renewable energy has increased from $117 billion in 2015 to $290 billion in 2024, which is three times that of the US.

Yet, these numbers do not show a simple divide between the countries. Some US states are taking action, regardless of the Trump government’s position. US investment in renewable energy increased by 2.6 times from 2015 to 2024, slightly higher than China’s growth rate.

But the divergence is most visible in each nation’s appetite for multilateral engagement. At the United Nation’s climate summit – COP30 in 2025 – China presented itself as a global leader in renewable energy production.

It does not treat renewables as just another sector, but as a core pillar of its strategy for economic growth and security. Renewables have been central to the country’s economic transformation since the 2010s.

Still, China has troubles of its own, so it will also be looking for new ways to boost a weak economy. It is currently falling short on emission reduction targets.

Its solar panel industry is grappling with over-capacity and a price collapse, and regional competition with India is intensifying.

Global economy

But as the US pulls back from the green economy, China can position itself as a broker of compatible green finance rules – especially for emerging markets that want capital without being trapped between competing standards, and hope that pays off.

Green regulations are increasingly embedded in the global economy. Businesses and investors hate uncertainty, so any move by China to position itself as the international rule-maker for green products and green energy would position it well for the future.

Alex Lo is a Professor of Climate Policy and Sustainability at York St John University in the United Kingdom.

This edited article is republished from The Conversation under a Creative Commons license. Read the original article.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.