appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

hooksArticlePageFloatingButtonConfigArticle

appConfig

filter

json

liveArticle

Djoomart Otorbaev

The recent escalation in the Middle East has produced an unforeseen winner. The conflict has rekindled worries about logistics and energy security, prompting governments and businesses to reconsider their reliance on fossil fuels and fragile supply routes. This has sped up the move towards renewable energy.
And the principal beneficiary of this shift is China.
The strategic significance of the Strait of Hormuz is well understood. Roughly one-fifth of the world’s oil trade passes through this narrow waterway. Any threat to its operation immediately affects energy prices, investor sentiment and economic planning. The conflict once again shows how fragile the global energy system remains when it depends heavily on a handful of geopolitical chokepoints.
For policymakers around the world, the lesson is increasingly clear. Reducing dependence on imported oil is no longer simply an environmental objective. It has become a national security priority.
Across Europe, demand for electric vehicles has surged to record levels. In March alone, Britain’s installation of solar capacity hit its highest since 2012. South Korea, which imports about 70 per cent of its crude oil from the Middle East, has accelerated plans to expand renewable energy generation. Similar discussions are taking place in countries throughout Asia, Africa and Latin America.
But there is an important reality many governments are reluctant to acknowledge publicly: the path away from fossil fuels runs through China.


China has established an extraordinary position across virtually every major segment of the green economy. Chinese companies dominate solar panel manufacturing, battery production, electric vehicles and many of the critical minerals processing industries that support these sectors. Industry estimates suggest that Chinese companies control at least 70 per cent of global production capacity in key green technologies.
This dominance didn’t emerge by chance. It was the result of long-term planning, systemic government support, infrastructure investment and a willingness to accept declining short-term profits. While Western economies debated the pace of the energy transition, China focused on developing the scientific and industrial capabilities necessary to support it.
The results are difficult to ignore. Chinese capital has become deeply embedded in renewable energy projects around the world. By the end of last year, hundreds of projects across Asia, Africa and Europe were being developed with Chinese financing, technology or equipment. These investments have helped create an international ecosystem increasingly connected to Chinese supply chains.
The consequences are becoming visible in trade statistics. In April, for the first time, more than half of China’s car exports were electric. Export growth has been particularly strong in emerging markets and in parts of Europe, where consumers increasingly seek affordable alternatives to Western and Japanese brands.
Environmental challenges aren’t the only driving force behind this trend; economic factors also play a critical role. Chinese manufacturers leverage economies of scale to offer more affordable products while maintaining high quality. As governments strive for rapid energy diversification, cost efficiency is becoming a decisive advantage.


The Middle East crisis has strengthened these dynamics. Every increase in geopolitical risk raises concerns about future oil supplies. Every spike in energy prices improves the competitiveness of electric vehicles, batteries and renewable power. What began as a military confrontation has become a powerful catalyst for investment in alternative energy.
Financial markets acknowledged this almost instantly. Investors boosted their investments in companies related to renewable energy, batteries and electrification. Major Chinese companies in these sectors saw significant rises in their market value. Capital shifts towards the perceived winners, and many investors believe that instability in traditional energy markets favours alternative energy suppliers.
Yet the story is not entirely straightforward. China’s green industries face significant domestic challenges. The solar sector struggles with overcapacity. Battery manufacturers face intense competition. The electric vehicle market has become increasingly crowded, producing fierce price wars. Profit margins have come under pressure across several industries.
For most Chinese companies, expanding abroad is a necessary move. International markets absorb surplus production capacity and support growth. The current focus on energy security offers an excellent opportunity for companies seeking customers outside China.


At the same time, geopolitical tensions may eventually create obstacles. Western governments are increasingly concerned about excessive dependence on Chinese technology and supply chains. Tariffs, investment restrictions and industrial policies designed to encourage domestic production are emerging in several countries.
This presents a paradox: governments that aim to accelerate their transition to cleaner energy sources while also reducing their strategic reliance on China. Balancing these two goals will be challenging.
The fundamental challenge is one of timing. Building alternative supply chains requires years of investment, technological development and infrastructure construction. The demand for energy security, however, has become immediate. For now, Chinese manufacturers remain uniquely positioned to meet the world’s rapidly growing needs.
The Middle East conflict may ultimately have consequences that extend far beyond the region. In reinforcing the economic logic behind renewable energy, it is strengthening the competitive position of the world’s largest supplier of green technologies.
History often produces unexpected beneficiaries. In this case, a conflict that shook the oil market is accelerating the rise of industries designed to replace it. Because China has spent years preparing for that future, it stands to capture a significant share of the economic gains.
Amid uncertainty in global energy markets, China’s green technology industry is becoming increasingly important. What was initially seen as a regional security issue now represents a key turning point in the shift of industrial and economic influence towards Beijing.


Indonesia’s Prabowo mulls labelling wildfires as ‘ecological terrorism’

Hong Kong aims to raise zero-carbon energy share of fuel mix to 30% by 2030

Geologists find unexpectedly large water sources in Xinjiang beneath China’s largest desert

Hong Kong must prepare for the impact of heat-related work stoppages

Climate change

Geopolitics is complicating the green transition – and China’s moment

A traffic jam outside the Berlaymont building as the European Commission College meets in Brussels on April 22 to discuss the AccelerateEU initiative towards clean, homegrown energy. Photo: EPA

Energy now a focus of US-China contest of the century

Workers inspect a wind turbine on April 23, in China’s Jilin province. Photo : Xinhua



People gather on a beach of Bandar Abbas, Iran, overlooking the Strait of Hormuz, on May 31. Photo: ISNA/West Asia News Agency via Reuters

Workers produce electric vehicles for export to European and American markets, in Jinhua, Zhejiang province, on May 13. Photo: VCG via Getty Images

China ‘overcapacity’ is a smokescreen for Western protectionism

Wind power generation equipment is ready to be shipped for export at Lianyungang port in China on December 9, 2024. Photo: Getty Images

How Southeast Asia’s ambitious green transition strategy is a windfall for China

Workers inspect a vast solar power project in western China. Photo: Xinhua

Opinion

China Opinion

World Opinion

News

China Future Tech

World

Middle East

Europe

United States & Canada

Business

China EVs

Climate and energy

China Business

Governments want to transition to cleaner energy but also cut strategic reliance on China. Balancing these goals will be tricky


Governments want to transition to cleaner energy but also cut strategic reliance on China. Balancing these goals will be tricky.


US-Israel war on Iran

China

Energy

Renewable energy

Solar energy

Wind energy

Electric & new energy vehicles

Climate change science and technology

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


Geopolitics is complicating the green transition – and China’s moment

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Governments want to transition to cleaner energy but also cut strategic reliance on China. Balancing these goals will be tricky

Governments want to transition to cleaner energy but also cut strategic reliance on China. Balancing these goals will be tricky