Greenwashing With Chinese Characteristics

China's "Green Electrostate" Is Neither

By Seaver Wang, Ted Nordhaus, and Vijaya Ramachandran

In the year or so since it became clear that the second Trump administration and Republican Congress were dead set on dismantling the Inflation Reduction Act and the Biden Administration’s “whole of government” climate policies, much of the left of center commentariat has undergone an about face on how the world would tackle climate change. The claim, repeated endlessly, that the passage of the IRA marked a historic inflection point in which the United States was ushering in a new era of global green industrial policy, has been memory holed. Now China is the world’s climate savior, a nascent “green electrostate” that is rapidly rewriting the rules of how the global energy economy operates.

Historian Nils Gilman, in Foreign Policy, goes so far as to predict an “eco-ideological” Cold War pitting a potential Sino-European “green entente” against a U.S.-led “petro bloc.” Bill McKibben warns of a Chinese-led green energy revolution that could turn the U.S. into a museum of obsolete technologies. James Meadway scoffs that China has “obliterated the ‘we can’t do anything about climate change because CHINA’ argument.” Noah Smith credits China with “quietly saving the world.”

All argue that China is opening a new chapter in the energy transition by converting its economy to run on electricity, expanding its domination of clean energy technology, and paving the way to global decarbonization. The global superpower of the future, many claim, will run on electricity generated with clean energy, mostly solar power.

These claims hinge on a number of promising trends. Chinese manufacturing prowess has driven down the cost of solar panels and batteries precipitously and its annual installed capacity of wind and solar generation dwarfs that of any other nation in the world. The advent of electric vehicles has catapulted China’s automobile industry to the cutting edge of global competitiveness in the span of a decade. And it has now climbed among the ranks of Norway, Sweden, Japan, and Taiwan in terms of its electrified share of total energy consumption, surpassing the United States, Germany, and most other advanced developed economies.

But these trends do not remotely make a green electrostate. Coal still generated 59% of Chinese electricity in 2024, with China in total consuming a whopping 56% of all coal used globally. Vanishingly little coal capacity in China has been retired.

Though battery electric and plug-in hybrid vehicles now represent a majority of new vehicle sales in China, only one in 10 cars on Chinese roads today is electric. To achieve full electrification of its transportation sector, China will need to replace an estimated 400 million fossil-fueled vehicles. And while electrifying the transportation sector is one way that China seeks to reduce dependence on imported liquid fuels, drilling for natural gas from the nation’s potentially sizable domestic reserves is another—a trend that has quietly put China on track to surpass Iran as the world’s third-largest natural gas producer, with 40% of its production in 2023 coming from non-conventional sources.

The characterization of China as a rising green electrostate—in contrast to Trump’s American petrostate—serves a variety of discursive purposes in political debates. But this reading of energy geopolitics misrepresents both Chinese reality and intent. China will likely continue to dominate the green technology sector. But its industrial economy will almost certainly remain powered and heated by coal and gas for decades and Chinese nickel, alumina, metal silicon, and plastics will continue to undercut overseas producers on the basis of cheap fossil energy rather than affordable clean power.

For regions like Europe or North America contemplating their trade relations and industrial competitiveness, an important key to Chinese export strength is precisely that it increasingly leads the world in many finished and end use green technologies while lagging environmentally in its industrial sectors. Policymakers and pundits misreading this strategy as that of an ascendant green electrostate do so at their own risk.

Not Green

Inspect satellite imagery for almost any midsized Chinese industrial city, and coal storage bunkers each around 300 meters in length often stand out as among the largest structures visible, frequently clustered near the largest local power plants and metal foundries.

In a surprising number of cases, fossil-fueled industrial clusters are fresh new investments in strategic sectors, not old obsolete facilities with one foot in the retirement grave. Over half a dozen new large coal units are mid-construction or complete across the large desert industrial parks north of Ürümqi, Xinjiang, feeding new aluminum, metal silicon, and ultrapure polysilicon plants. A flourishing cluster of new coal-to-chemical plants are entering operation around the city of Yulin in Shaanxi, buoyed by national government endorsement of coal-derived chemicals as a “new productive force”. A large aluminum smelting complex outside Qiaotou in Qinghai is dramatically expanding its onsite coal generation.

Meanwhile from coastal Fujian to Shandong to Liaoning, vast new portside industrial complexes are literally rising from the sea to produce petrochemicals and plastic precursors. Nearby, liquified natural gas terminals are expanding storage tank capacity in anticipation of steadily growing demand, while the national government flirts with new pipeline construction including cross-border projects with Russia.

China’s new automotive industry strength, similarly, sits at the intersection of manufacturing innovation and the nation’s vast furnaces of fossil-based mineral processing and industrial production. China controls more than 90% of global magnesium output, critical for aluminum alloys and lightweight cast magnesium parts, precisely thanks to methodical un-electrification of magnesium smelting using the heat energy and labor-intensive but cheap Pidgeon process which, alongside aggressive dumping on international markets, has gradually put electrified magnesium producers in Norway, Canada, and France out of business.

Much of the nickel in steel alloys and battery chemicals now comes from Chinese co-owned mining industrial parks in Indonesia with attached coal plants, which have overturned global nickel markets using the emissions-intensive high pressure acid leaching and nickel pig iron pathway to make use of more difficult-to-process Indonesian nickel ores. China, meanwhile, produces over half of its battery graphite synthetically, accounting for 97% of global synthetic graphite anode production, having built up much of its synthetic graphite industry in coal-intensive provinces where the electricity-intensive process was cheapest.

So while China’s progress on clean energy and vehicles has stoked hopes that a sweeping green transformation is not only possible but compatible with China’s economic goals—and even a key element of China’s bid for superpower status, the reality is that coal remains the “ballast rock” of China’s energy supply, according to both government policy statements and domestic media reporting, providing cheap electricity, industrial heat, and chemical inputs for much of the industrial economy.

Not An Electrostate

The other half of the green electrostate hype is predicated upon China’s comparatively high rate of electrification. China has succeeded in electrifying over 30% of its energy economy, higher than the US and many other advanced developed economies and about the same as Japan. But China’s comparatively high electrification rate is not what its green electrostate boosters imagine.

While electric vehicles account for about twice the share of total vehicles in China as in Europe, for instance, China boasts many fewer private vehicles per capita than Europe or the United States, about a third as many as the US and less than half as many as Europe. As a result, both total vehicle emissions and the energy demands of the transportation sector represent a smaller share of China’s total emissions and energy economy respectively than in most other advanced developed economies. Emissions from China’s coal-to-chemicals sector alone (690 million tons CO2 in 2024), for instance, approaches that of the country’s entire transportation sector (around 800 million tons CO2).

For this reason, China’s world leading electric vehicle industry doesn’t really account for its high overall electrification. Transportation only makes up about 15.6% of China’s final energy consumption and electricity only accounts for 6.8% of total energy consumption in the transportation sector.

Rather, much of the electrification of China’s energy economy has occurred in the industrial sector, which accounts for 60% of the country’s final energy consumption. But that is not because China has figured out how to electrify industrial and manufacturing processes that other industrialized countries have not. To the contrary, China has been playing catch-up with most advanced industrialized economies in numerous areas of industrial electrification.

Electrified steel production from recycled scrap, for instance, is likely to miss the government’s 2025 target of 15% of total steel production, lagging well behind India (58.8%), Japan (26.2%), the United States (71.8%), and the global average (30%).

Where China has been replacing direct coal heating in manufacturing, much of it has been in sectors where Europe or North America haven’t burned significant coal in generations. Out of 127 million net fewer tons of coal burned in 2022 relative to 2015 across China’s non-mining industrial sector, 42 million tons were saved by reducing coal burning in textiles, with an added net 25 million tons saved from the paper and food industries, plus another 27 million tons reduced across the pharmaceuticals, rubber, plastics, electrical machinery, and automobile sectors.

Meanwhile cement production and its corresponding heat inputs, has declined in recent years amid a slowdown in construction, such that a 17% decrease in cement output more or less fully explains an 18% decrease in coal energy use in China’s non-metallic mineral sector between 2022 and 2015. During this same time, the industrial sector has continued a greater shift to manufacturing, high-tech sectors, and equipment production that is already relatively more electrified.

China’s electrification of its economy, in other words, is not comparatively high because it has succeeded in electrifying its industrial sector to a greater degree than its competitors but because its industrial sector consumes twice the share of final energy demand compared to other major economies. At the same time, European or North American engineers likely wouldn’t view many specific drivers of Chinese industrial electrification as particularly impressive.

Indeed, the think tank Ember has observed that electricity-driven fossil fuels substitution in 2023 (73.4 TWh) had slowed relative to 2019 (>200 TWh). The report authors attribute this to the exhaustion of low-hanging fruit—electric boilers replacing loose coal residential heating and electrification of basic processes in “textiles, food, and light manufacturing.”

China-Scale Green Arbitrage

Situated in advanced developed economies that consume prodigiously but have outsourced much of their industry and manufacturing, it is perhaps not so surprising that many Western observers have fixated on the finished products and not the vast supply chains and manufacturing infrastructure necessary to produce them. But it is China’s non-carbon constrained energy-industrial model, not electric vehicles, solar panels, batteries, and heat pumps, that has rewritten the rules of the global game.

For rich nations that can stomach China’s human rights abuses and fossil-heavy production, alongside a declining domestic industrial base and new geopolitical vulnerabilities, becoming vassals to China’s green tech imperium is, perhaps, a viable path toward climate mitigation. Even so, twenty to thirty percent of emissions in advanced industrial economies still come from the industrial sector, and rich countries haven’t had much more success decarbonizing those emissions than has China.

McKibben and others have also made much of the transformative potential of cheap solar in poor countries like Pakistan. But while solar and batteries give households and small businesses in those places an alternative to grid electricity, they are not a viable means of powering industrial activities and manufacturing, which historically have been the path that poor countries have taken to increasing incomes and consumption, and hence living standards.

So a sober assessment of China’s actions and motivations suggests that the country is highly unlikely to “speed up time” and take the world “through the looking glass… to zero by 2050,” as economic historian Adam Tooze recently suggested. China’s massive industrial sector and increasingly hegemonic position in global manufacturing is sui generis. Green and electrified or not, China’s unique political economy is neither a savior nor a model for either advanced developed or developing economies.

The current focus among Western commentators on China as a climate leader is rather a backdoor effort to recenter the climate issue in the West at a moment when other concerns have taken precedence, not least among them U.S.-China tensions, as well as the rise of artificial intelligence, and the demise of multilateralism. Beijing has fed these efforts with propaganda. Well-coordinated messaging on China’s technological primacy is everywhere, coupled with a clever cosplay of climate multilateralism. Unsurprisingly, the U.S. and European climate movements have swallowed these claims hook, line, and sinker. These “Spamoflauge” social media posts tell a broader story as well, advertising China as high-tech, in implicit contrast with an American empire seemingly in decline and unable to build things or take on grand challenges like climate change.

Many of those implicit concerns are not without merit. The industrial and manufacturing model that has brought the world cheap renewables, batteries, and electric vehicles may, as Gilman, Tooze, and others argue, offer an alternative template for social, political, and economic modernization, one that Western powers are only beginning to reckon with. But once you come to terms with the reality that China’s development and modernization does not follow the Western model—not least because it is far easier to engineer the future in the absence of Western-style democratic pluralism—there is little reason to think that China’s energy development will be much shaped by that most Western and parochial of modernization characteristics, namely environmentalism.