China’s green dominance a ‘fundamental dilemma’ for Western governments, report says

China’s dominance in key green technologies is making the global carbon transition cheaper, but Western efforts to reduce reliance on Chinese manufacturing risk slowing it, according to researchers.

China now led the world in electric vehicles (EVs), batteries and solar power – accounting for 70 per cent of global production of EVs, 80 per cent of lithium-ion batteries and 80 per cent of solar photovoltaics, said the report from the University of Manchester, released on Monday.

“China’s dominance of green technology presents a fundamental dilemma for governments,” said James Jackson, lead author of the report and research fellow with the university’s Sustainable Consumption Institute. “The world needs these technologies to decarbonise, but efforts to compete with China risk making the transition more expensive and more difficult.”

The report comes as Western governments tighten tariffs and impose local-content rules on Chinese clean technologies. For example, the European Union has scrutinised BYD, Geely and SAIC over state support, while US clean-energy subsidies under the Inflation Reduction Act are tied to sourcing of components from outside China under “foreign entity of concern” rules.

The report warned that reducing reliance on China could slow the carbon transition Western governments were trying to accelerate.

The study cited estimates that China’s domestic subsidies for green industries totalled 7.2 trillion yuan (US$1 trillion) in 2025, adding the support had aided not only China’s low-carbon efforts but also global decarbonisation by making green technologies cheaper and more widely available.

According to an International Energy Agency estimate quoted in the study, installing the current solar supply, predominantly produced in China, could cut global emissions by 15 per cent by 2030.