China: Why does the world need Chinese production capacity in new energy?

By Manal Abdel Fattah

Amin Hassan Al-Nasser, President and Chief Executive Officer of Saudi Aramco, the world’s largest oil company, said: “The progress that has been made so far in the field of solar panels has been made possible thanks to China’s efforts to reduce costs, and the same applies in the field of electric cars.”
This came during the recently held 26th World Energy Conference, where he praised that the development of China’s new energy industry has helped Western countries achieve net zero carbon emissions and played an important role in the global energy transition.
With the United States promoting China’s “overcapacity” theory and dumping Chinese new energy products on the international market, Nasser’s just statements represent the international community’s rational and objective assessment of this issue.
When asked: What does China’s green production capacity mean to the world? He said: First, with the help of technological innovation and complete industrial chain system, China has provided affordable solutions to the world and contributed to the popularization of new energy products.
It can be seen that China’s green energy production capacity provides cost-effective products to global consumers, alleviates the inflationary pressure caused by traditional energy shortages, and truly benefits consumers.

According to an analysis by consulting firm McKinsey, Chinese electric cars are about 20 to 30 percent cheaper than those produced by European companies, partly because it takes China only about half the time to develop new models manufactured in Europe.

For countries around the world, China’s green energy production capacity has brought new impetus to development. Bloomberg recently published an article saying that hope for the global energy transition is largely due to “China’s provision of clean, low-priced products.”

China currently provides 50% of the world’s wind energy and 80% of photovoltaic equipment. From 2012 to 2021, China’s green trade grew by 146.3%.

Second, technological breakthroughs are key to the transformation of energy production and consumption.

Through innovative practices, Chinese enterprises have provided many innovative solutions to the world, and contributed to promoting global technological progress and industrial modernization.

According to the data, from 2011 to 2020, the total number of global patent applications for Chinese environmental technology was nearly 60%, making it the country with the most active design for environmental technology innovation. At the same time, China is advancing technological progress with other countries through open cooperation and healthy competition.

Third, China’s new energy production capacity has made a great contribution to confronting global challenges such as climate change.
As the world’s largest developing country, China has not only pledged to achieve carbon neutrality in the shortest time in the world, but also continues to help the world reduce emissions. In 2023, the world’s largest solar power plant built by China deep in the desert south of Abu Dhabi in the United Arab Emirates was officially commissioned. It began providing electricity to 160,000 local homes, helping Abu Dhabi reduce carbon emissions by 2.4 million tons annually, and increasing the share of clean energy in the country’s energy mix by more than 13%.
The theory of “Chinese overcapacity” for new energy promoted by the United States and other Western countries cannot stand up to the facts, because it is only an excuse used by the United States to practice protectionism, and will only prolong the process of the world’s transition from traditional energy to new energy. The real problem the world faces is not the “overcapacity” of green energy, but the severe shortage of this capacity. As for China’s production capacity, it strongly and undoubtedly meets the world’s needs.

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