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Not made in China: the US$6 trillion cost of shifting the world’s clean-tech manufacturing hub | Wood Mackenzie



Not made in China: the US trillion cost of shifting the world’s clean-tech manufacturing hub | Wood Mackenzie

Secondly, China-based manufacturers have achieved the lowest costs across these technologies; pricing at levels that are unapproachable for the major competing markets.  

China is not just winning on technology costs. A decade ago, low-cost China products were commonly brushed off as mass produced and low quality. Not anymore. Performance data from operations show that best-in-class turbines, PV modules and battery cells are coming out of China, performing as well as the western incumbents. 

How did China come to dominate? 

In 2008, when the financial crisis hit, China introduced a goliath US$600 billion (RMB 4 trillion) stimulus package. Recognising the threat and opportunity posed by climate change, the package included generous subsidies for the clean-tech industry, such as solar manufacturing.  

It also welcomed global leading manufacturers like GE, Siemens and Vestas, plus solar tech companies, to enter into major JVs in China through technology sharing and localisation agreements, to access the domestic market. This enabled key renewables industries to leapfrog the European and US market leaders at the time. 

By 2013, China led global renewables installations 

With such high internal market demand across wind, solar, energy storage and EVs, market pull policy has been withdrawn, with FiT subsidies ceasing in 2021. This coincided with China’s announcement that it would commit to peak emissions by 2030 and reach net zero by 2060, giving long term certainty to its mission: move to an electrified economy and away from energy security risk fossil fuels. 

Whilst other markets are moderating renewables targets, Wood Mackenzie estimates China has installed 230 GW of wind and solar in 2023, more than double the US and Europe combined, with a capital investment value of US$140 billion. 

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