Investors need to look past tariff headlines to see China’s long game in green tech

The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.​

While Western observers fixate on Chinese dumping allegations and subsidy wars, they risk missing a more profound strategic shift in the sustainability realm: China has positioned itself not merely as the world’s green technology factory, but as the architect of a post-carbon global order. 

A recent article from The New York Times highlights China’s flood of green technology to developing nations. But that’s just one dimension of this transformation. The full picture reveals something far more consequential for investors, policymakers and anyone trying to understand the next chapter of global economic competition.

China’s climate strategy isn’t primarily about altruism or even domestic air quality, although both matter. It’s about recognizing three brutal realities that will define the 21st century: 

• Energy demand will surge as billions enter the middle class 
• Climate change poses existential risks that no amount of denial can wish away 
• Whoever controls the infrastructure of decarbonization will wield the influence that oil producers enjoyed in the 20th century

Chinese clean energy exports in 2024 alone are projected to cut global emissions by 1 percent annually once operational — a staggering figure that dwarfs the impact of most international climate agreements. China is responsible for 41 percent of renewable equipment exports, followed by Germany at 23 percent and South Korea at 11.4 percent. But China’s hardware exports (solar panel, ion batteries, turbines, energy storage systems, etc.) are just the visible tip of a much deeper strategy.

From imitator to innovator: The patent revolution

Chinese companies now account for roughly 75 percent of global clean energy patent applications, up from just 5 percent in 2000. Even more striking: this includes 90 percent of solar and wind patents, 85 percent of energy storage patents and over 70 percent of battery and electromobility patents.

What changed? Beijing engineered a form of “economic Darwinism” — flooding strategic sectors with subsidies, then forcing companies into cutthroat domestic competition. The survivors emerge battle-hardened, innovative and globally competitive. It’s industrial policy on steroids and it’s working.

China also sought to overhaul its much-criticized Belt and Road Initiative, quietly shifting its focus. Last year, Chinese energy engagement in Belt and Road countries neared $40 billion, and green-energy investments alone reached a record $11.8 billion, excluding equipment exports. Between 2023 and 2024, China announced $58 billion in overseas clean energy manufacturing projects, plus $24 billion in power generation and storage deals, largely targeting South Asia, the Middle East and North Africa.

This represents a strategic repositioning from traditional infrastructure to the commanding heights of 21st-century energy. Saudi Arabia has now surpassed Pakistan as China’s most important Belt and Road energy partner, receiving about $30 billion in engagement since 2013. When the world’s largest oil exporter becomes your top green energy client, the geopolitical implications are profound.

The developing world leapfrogs

Here’s what the tariff-obsessed miss: approximately 47 percent of China’s solar, wind and electric vehicle exports now flow to emerging and developing countries, and only 4 percent go to the U.S. China has essentially decoupled its green technology dominance from Western markets.

While the West erects trade barriers, China is wiring the rest of the world — home to the majority of humanity and future energy demand — into its technology ecosystem. Chinese clean energy exports, for example, are set to cut emissions in sub-Saharan Africa by roughly 3 percent annually and in the Middle East and North Africa by 4.5 percent. These aren’t marginal impacts; they’re reshaping entire regional energy trajectories.

This isn’t altruistic behavior considering that last year, investment and production in clean energy contributed 13.6 trillion yuan ($1.9 trillion) to China’s economy — roughly one-tenth of GDP, equivalent to Australia’s entire economy. The sector is growing three times faster than China’s overall economy.

As domestic growth slows and manufacturing overcapacity builds, China has created a massive new export market that simultaneously addresses global climate needs, generates economic returns and builds geopolitical influence. It’s the kind of three-dimensional strategy that makes Western policymakers look flat-footed.

What western investors are missing

The dominant narrative frames Chinese green technology as a threat requiring tariffs and trade wars. But several investment angles emerge from a clearer analysis:

The downstream value play: Most economic value in clean energy lies downstream in project development, system integration, installation and services, rather than in manufacturing where China dominates. Companies positioned to deploy and integrate Chinese hardware in developing markets could capture significant value without direct manufacturing exposure.

The critical minerals gateway: China now controls an estimated 75 percent of Indonesia’s nickel operations, critical for EV batteries. Similar strategies are unfolding in South Africa’s platinum-group metals and other resource-rich nations. The investment thesis isn’t just Chinese companies, but firms positioned at the intersection of mineral processing and clean tech manufacturing in these emerging hubs.

The next technological moves: Chinese corporate R&D spending in the electricity sector is now 10 times higher than U.S. counterparts. For investors, this suggests opportunities in next-generation technologies, carbon capture, smart grids, heavy industry electrification — where China is directing innovation capital.

The grid and storage infrastructure play: Battery storage investment in China rose 69 percent from the first half of 2024 to the first half of 2025, while grid investment increased 22 percent. The bottleneck isn’t generation anymore; it’s storage and transmission. Companies solving these challenges, whether in China or emerging markets, face massive addressable markets.

Paradox, peril and investment implications 

China’s strategy isn’t without contradictions. Despite leading in renewable deployment, the Middle Kingdom still accounts for roughly 55 percent  of global coal electricity generation. New coal plants continue receiving permits even as solar and wind capacity soars, showing the “green transition paradox” in stark relief.

But from an investment perspective, this contradiction may accelerate rather than hinder the transition. China’s domestic air quality crisis, coupled with the economic logic of cheap renewables, creates momentum regardless of coal’s persistence in the energy mix. Thus, investors can think about China’s green strategy across three time horizons:

• Near-term (1-3 years): Identify companies in emerging markets positioned to deploy Chinese green technology. Think Brazilian solar developers, Southeast Asian EV charging networks, African battery manufacturing partnerships. The hardware may be Chinese, but deployment and service economics are local.
• Medium-term (3-7 years): Watch for Chinese outbound investments in critical minerals processing and component manufacturing outside China. These represent strategic efforts to secure supply chains and could offer compelling returns as they mature.
• Long-term (7-plus years): Consider exposure to next-generation technologies where Chinese innovation is now focused: hydrogen infrastructure, advanced grid technologies, battery recycling and heavy industrial electrification. China accounts for 31 percent of global clean energy investment, which means its strategic priorities will likely shape which technologies achieve commercial scale.

China hasn’t just become a green technology manufacturer; it’s engineering the infrastructure of the post-carbon economy and positioning itself as the indispensable partner for developing nations that will drive future energy demand. China’s share of global clean energy investment has risen from about 25 percent a decade ago to nearly one-third today.

While Western policy debates remain trapped in zero-sum trade frameworks, China is playing a longer game: creating dependencies, shaping standards, building influence and capturing economic value across the entire clean energy value chain. For investors, the question isn’t whether China will dominate green technology. It’s how to position portfolios for a world being rewired with Chinese hardware, Chinese financing and increasingly, Chinese innovation. Those who see only tariff headlines and trade disputes will miss the forest for the trees.