China’s Clean-Tech Dominance Creates a Climate Versus Security Dilemma

China’s clean-energy manufacturing success has produced an uncomfortable trade-off for governments. Its industrial scale and public support have helped make solar panels, batteries and electric vehicles more affordable and widely available. At the same time, dependence on Chinese production leaves other countries exposed to geopolitical, economic and supply-chain risks.

The University of Manchester-led research frames this as a climate-versus-security dilemma. Cutting reliance on China may strengthen industrial resilience, but tariffs, trade restrictions and costly attempts to duplicate supply chains could slow the deployment of technologies needed to reduce emissions.

How dominant is China in clean-energy manufacturing?

China holds a dominant position across the supply chains for major low-carbon technologies. An assessment cited by the London School of Economics places China’s share across five key technologies—batteries, electrolysers, heat pumps, solar PV and wind turbines—at roughly 40–80%.

Solar illustrates the concentration particularly clearly. The International Energy Agency says China’s share exceeds 80% across the key manufacturing stages for solar panels, including polysilicon, ingots, wafers, cells and modules. It also says China invested more than $50 billion in new solar PV supply capacity from 2011 onward.

That concentration has helped deliver lower prices and rapid deployment. An IEA presentation attributes an 80% decline in solar PV costs to policies that enabled economies of scale and supported innovation across the supply chain. The benefit is global: cheaper equipment makes it easier for countries with limited domestic manufacturing capacity to install renewable power.

But concentration also creates vulnerability. The IEA says solar PV and other clean-energy supply chains remain heavily concentrated in China, with concentration in key production segments expected to remain above 90% through 2030 in its assessment. The agency supports diversification for supply security while stressing the need to continue expanding renewable capacity.

What the Manchester research says about Chinese subsidies

The research does not treat Chinese industrial policy as a simple story of either success or unfairness. Its central argument is that Chinese investment and public support have helped reduce the cost of renewable technologies and, in effect, supported the wider global transition to a low-carbon economy.

The support described in the evidence extends beyond direct grants. It can include preferential loans, cheap land, discounted electricity, and lower-cost raw materials and batteries, alongside research support and tax incentives.

That support has helped Chinese manufacturers reach a scale that competitors in Europe and the United States have struggled to match. The result is a paradox: policies that other governments regard as market-distorting have also helped supply affordable equipment for decarbonisation.

This does not mean dependence is harmless. Concentrated manufacturing can create strategic exposure, reduce domestic industrial capacity and leave countries vulnerable to future trade disputes or supply interruptions. Research on Chinese investment in Europe also identifies concerns around market distortion, data and critical infrastructure, and long-term economic dependence.

Why tariffs and “de-risking” could slow climate action

The United States and European Union have responded to Chinese state support, overcapacity and alleged unfair competition with investigations, tariffs and domestic subsidy programmes designed to build alternative production.

Those policies have legitimate industrial and security objectives. A domestic manufacturing base can preserve jobs, develop technical capabilities and reduce exposure to a single supplier. European policy analysis has also argued that Chinese support for EV production can distort competition and create longer-term dependence.

The climate risk is that protection comes before affordable alternatives are available. If tariffs make electric vehicles, batteries or solar equipment more expensive—or if governments wait for new domestic factories to reach scale—deployment could slow. The Manchester research therefore warns that indiscriminate efforts to reduce dependence may make decarbonisation slower and more expensive.

The policy challenge is not to choose between unrestricted dependence and complete isolation. It is to identify which parts of the supply chain are strategically critical, diversify them over time and avoid measures that unnecessarily restrict access to low-cost clean technology.

The report’s proposed middle path

The research points toward managed cooperation rather than either dependency or abrupt separation. Countries can work with Chinese manufacturers to deploy affordable technologies while simultaneously building domestic capacity, improving supply-chain transparency and setting standards for labour, environmental performance and data security.

For the UK, the report’s recommendation includes inviting Chinese EV manufacturers to invest and build locally. Local production could combine more affordable vehicle supply with jobs, supplier development and potential technology transfer, provided that the terms protect public interests and support a resilient domestic industry.

This approach would also shift the debate from where a product is headquartered to how it is made, where value is created and whether a market is becoming dangerously dependent on one source.

Chinese EV makers are expanding beyond Western markets

Trade barriers in the United States and Europe, combined with intense competition and overcapacity in China, are encouraging Chinese automakers to seek growth in other markets. South Korea and South Africa show two different routes: expanding through fleets and dealerships, and increasingly localising production.

In South Korea, car-sharing operator Socar planned to expand its China-built EV fleet from roughly 200 vehicles in the first half of 2026 to about 1,100 by the end of the year. Fleet and rental channels can give newer brands a route into a market before they build a large private-sales network.

South Africa is becoming another important testing ground. BYD planned to expand its dealership network to between 60 and 70 locations by the end of 2026, as it competes with electric and plug-in-hybrid models.

Chery has taken a more industrial approach. The company formally took over Nissan’s former Rosslyn plant near Pretoria and plans to upgrade the facility before starting vehicle production in 2027. Chery says the site is intended to become an African manufacturing and export hub, with electrified vehicles among the planned output.

Reported plans put initial production during the 2027 ramp-up period at about 15,000 vehicles, with a possible single-shift annual capacity of 50,000 once the plant is fully upgraded.

These moves show how trade barriers can redirect, rather than stop, the expansion of Chinese clean-technology companies. Instead of relying only on exports, manufacturers can seek local assembly, partnerships and investment in markets where governments want cheaper transport and new industrial capacity.

What countries should watch as EV investment grows

The benefits for emerging markets could include lower-cost electric mobility, new investment and the development of local suppliers. But the outcomes will depend on policy choices and infrastructure.

Governments must weigh local-content requirements against the need to keep vehicles affordable. They also need to consider charging networks, electricity reliability, employment quality, technology transfer and the risk that imported overcapacity could weaken local manufacturers. Evidence from the available sources establishes these tensions, but it does not show that every EV incentive or localisation programme will succeed.

The broader lesson is that clean-energy policy should avoid a false binary. China’s manufacturing scale has accelerated access to technologies the world needs, yet excessive concentration creates real strategic risks. The most durable strategy is to diversify critical supply chains, enforce transparent rules and build local capability—without making affordable clean technology so expensive that the transition itself slows.