In the world economy, not all sectors are created equal. Industries farther up on the supply chain waterfall resources, raw materials, and components to the rest. The energy sector underpins all industrial production and transportation. Every factory, cargo ship, truck, and lightbulb requires energy. And the importance of energy only increases with technological innovation.

The world runs on oil, coal, and natural gas. Increasingly, it relies on electricity which, in turn, is usually generated by coal or gas. In recent years, a small proportion of global electricity has been generated by renewable energy. This share is growing thanks to China.

Necessity is the mother of invention

China’s economy is hungry for energy. For 15 years running, demand for electricity in China has increased by an amount equivalent to the yearly electricity consumption of Texas. Still, China only consumes half as much electricity per capita as the US.

Unlike the US and Russia, China doesn’t have vast oil fields to draw from. For decades, it was a huge net importer of oil, coal, and natural gas. But as a growing imperialist power, they needed to reduce their dependence on energy imports from abroad. This political calculation—rather than concern for the future habitability of the planet—lies behind Chinese investments in hydropower, solar, wind, and nuclear energy.

In 2024, China invested more in renewable power than the rest of the world combined. Renewable energy and related technology accounted for 10% of the country’s GDP growth that year, and 75% of global clean energy patents were filed by Chinese firms. Chinese companies have developed EV batteries that take 10 minutes to charge for a 250-mile (400km) road trip.

China was responsible for 60% of the increase in global renewable energy capacity in 2024. Solar and wind met 84% of China’s new energy demand. The country’s energy sector still has room to grow, and it has laid the groundwork to become the dominant manufacturer of renewable energy technology.

America lagging behind

Long-term, centralized planning—not the blind, invisible hand of the market—was key to China’s success. The legacy of a planned economy and a strong state steering the market allowed China to execute back-to-back five-year plans which built its renewable energy industry from nothing.

Meanwhile, the rest of the world doesn’t view China’s success as evidence that clean energy can work, but as a reason not to divest from fossil fuels. Since China has already cornered the renewables market, capitalists in the West don’t see potential profit in renewable energy. This is the logic of capitalism. In 2024 the US and EU decreased their renewable energy investments.

Electricity consumption in the American industrial sector has declined by 25% since 2000, a reflection of the decline of industry and the economy in general. But now, projected electricity consumption in the US is forecast to jump by 25%.

Big investments in AI data centers are the sole driver of this increase. The AI bubble isn’t the result of a conscious plan; it’s based on stock-market speculation. As a result, some data centers are being abandoned halfway through construction, painting a precarious and unpredictable picture of what electricity demand will look like in the near future.

Power companies are running into supply-chain disruptions and labor shortages as they try to increase grid capacity to meet demand which may or may not materialize. The timeline for these projects is often five years or more. But the American capitalist class, in its senility, is barely able to plan five weeks ahead.

The future of American power production isn’t left solely to the anarchy of the market, however. The state also plays a role—but a very different one than in China. The Trump administration is full of former fossil-fuel executives. Naturally, to try to meet energy demand, Trump’s policies are geared towards expanding drilling permits while slashing funding for renewable energy.

Trump has repeatedly expressed his disdain for renewables. Underlying the president’s contempt is the American capitalists’ yearning for a return to a time when the US was the undisputed top dog. This was the epoch of oil—the black gold that fueled the rise of American imperialism and the glory days of the postwar boom.

Imperialist competition

The US boycotted last year’s COP30 climate summit in Brazil. In contrast, China took up more space than ever in the pavilion. Attendees lined up at the huge booth to see presentations from the likes of LONGi Group, the world’s leading solar power firm; EV conglomerate BYD; and China’s State Grid.

China is also using renewable energy to extend its sphere of influence in Africa. Nigeria is just one example. The country is $97 billion in debt. In 2022, it had to borrow 1 trillion naira ($689 billion) for oil subsidies due to rampant theft and sabotage in the oil industry.

In October of last year, the government struck a deal with LONGi to build a massive solar panel plant. As part of the agreement, the Nigerian government is planning to ban solar-panel imports—protecting China’s investment from any potential competition.

Limits of the market

Nonetheless, China and the rest of the world are still heavily reliant on fossil fuels. While it’s possible China could be reaching its “peak” fossil fuel consumption, they continue to build coal power plants to meet their energy needs.

Even with its strong state, China is still subject to the limits of the market. Despite the urgent need for renewable energy worldwide, China has already produced more renewable technology than it can profitably sell. The prices of solar panels and EVs have dropped due to Chinese overproduction. Tariffs and import bans targeting Chinese exports have further constricted the market. This exposes the irrationality of a world economy driven by profit and divided up into nation states with competing interests.