China is often described today as having “overcapacity” in manufacturing. Its dominance in solar panels, batteries and wind equipment, for example, has left many observers baffled. How did a country once dismissed as undeveloped become, within a generation, so technologically developed that its success now unsettles global markets?
Part of the answer lies in how we frame China’s development. What is often described as excess capacity is better understood as the outcome of an energy-centred development strategy – one that treats energy as the foundation of modern economic capability.
Energy is the oxygen of modern life. Without it, economies suffocate. Every major leap in human development – from steam engines to silicon chips – has depended on energy availability. The decisive question today is whether we can deliver enough energy cleanly and quickly. Few countries illustrate this dilemma more clearly than China.
Advertisement
In the late 20th century, China was energy-poor. Its economic take-off was fuelled overwhelmingly by coal – abundant but environmentally devastating. By the late 1990s, toxic smog and contaminated rivers and soils were impossible to ignore. Chinese leaders understood this development model was unsustainable.
From the early 2010s, policymakers were already grappling with multiple challenges at once: environmental degradation, energy supply, industrial upgrading and the limits of growth driven by low-cost manufacturing. These issues also had to be addressed simultaneously.
Advertisement
In 2012, the Communist Party wrote “ecological civilisation” into its constitution, signalling that growth could no longer come at any cost and that five-year planning cycles had to align accordingly. The urgency intensified in 2013, when severe smog episodes triggered a nationwide “war on pollution”, tightening enforcement, capping coal use in key regions and legitimising deeper structural change.