Clean Energy top Driver of Chinese Economy in 2023

According to a report released on Jan 25, clean-energy projects were the most important driver of China's economic growth in 2023, with Beijing investing nearly as much in decarbonisation infrastructure as total global investment in fossil fuels. China is the world's largest emitter of greenhouse gases that contribute to climate change, but it is also the leading producer of wind and solar energy.

Faced with rising energy consumption, the country has increased its use of renewables, but in 2022 approved the largest expansion of coal-fired power plants since 2015, despite President Xi Jinping's pledge to reduce CO2 emissions between 2026 and 2030.

Investment in "clean-energy" sectors accounted for 40 per cent of China's gross domestic product (GDP) expansion last year, researchers at the Finland-based Centre for Research on Energy and Clean Air (CREA) said in a new report on Jan 25.

"With Chinese investment growing by just 1.5 trillion yuan (US$211 billion) in 2023 overall, the analysis shows that clean energy accounted for all of the growth, while investment in sectors such as real estate shrank," the researchers said.

The researchers examined investment in solar power, electric vehicles (EVs), energy efficiency, railways, energy storage, electricity grids, wind, nuclear and hydropower.

These sectors received US$890 billion in investment, almost as much as the total global investment in fossil fuels last year, CREA researchers said.

"Without the growth from clean-energy sectors, China's GDP would have missed the government's growth target of 'around 5 per cent', rising by only 3.0 per cent instead of 5.2 per cent," the researchers found.