Green light
China really does provide a blueprint for electrification – but what that means for the UK is not straightforward, argues Cornel Ban
Chinamaxxing is a favourite pastime of decarbonisation and green industrial policy experts. Yet many are simultaneously haunted by the possibility that the claims about the ‘Chinese electrostate’ are overblown. I propose that a sensible way to address this question is through a comparison of China with the EU, arguably the world’s leading climate pioneer for decades.
The first and most important metric of the ‘electrostate’ is electricity’s share in final domestic energy consumption and the diffusion of electrified transport, heating, and industrial processes. The situation here is clear: electricity already accounts for roughly 30-32 per cent of China’s final energy consumption and growing fast, compared with about 24-26 per cent in the EU and stagnating.
Next, China has surged ahead in domestic electric-vehicle diffusion, with close to half of all new cars now electric. This EV revolution has erased more than a month’s worth of oil imports into China each year. Europe has seen record EV sales, but they accounted for just 24 per cent of new vehicles, with only Norway and Denmark above the 50 per cent sales mark. Elsewhere, China’s rail strategy demonstrates how scale magnifies the returns to electrification. With about 75 per cent of its network electrified, compared with 56 per cent in the EU, and a high-speed system roughly five times larger, China has shifted transport demand away from aviation and road haulage at a magnitude Europe has yet to match.
Scratch the surface and the gulf is even starker. A fair comparison must ask how each transition would have performed under the other’s electricity-demand trajectory: China’s renewables buildout under Europe’s stagnant demand, and Europe’s renewables buildout under China’s explosive growth. The bottom line is that Europe greened an electricity system as demand barely grew; China greened one as demand nearly quadrupled. Between 2006 and 2025, China increased renewable electricity generation from 447 TWh to 3,920 TWh. This is an annual compound growth rate of 12.1 per cent. This was twice the corresponding rates in the US and the EU27. In absolute terms, China’s expansion was even more of an outlier: it added an average of 183 TWh of renewable generation every year, compared with 46 TWh in the EU-27 and 41 TWh in the US.
In other words, China’s renewable expansion would have been more than fast enough to decarbonise a stagnant European-sized system. Coal has persisted not because China built too little clean energy, but because it experienced an enormous spike in demand for energy while in Europe demand was flat. You cannot compare apples and oranges.
Now consider global shares in batteries, grid equipment, EVs, and the critical mineral processing that anchors electrified production systems. By 2024-2025, China had 85 per cent of global lithium-ion battery cell production capacity, 70 per cent of the EV battery and EV market, 60 per cent of global lithium refining capacity, and produced 92 per cent of the world’s solar modules and 82 per cent of all wind turbines. China also leads in ultra-high-voltage technology, hosting around 35 of the 37 largest HVDC cable systems on the planet. Contrary to persistent accusations of reverse engineering, Chinese firms hold dominant global shares of patentable innovations in core cleantech segments, with the exception of wind turbines, a sector where high end patents are still predominantly European.
Are the green Chinamaxxers off the mark, then? The answer is clear: absolutely not! With one caveat: as long as coal remains central to China’s energy mix, this single country’s contribution to greenhouse gases will negate the (real) progress made in the EU reducing emissions. Fortunately, China could do far better on this front.
China’s dual energy system
China’s energy transition is best understood not as a straightforward substitution of renewables for fossil fuels, but as a politically managed dual-energy system in which coal and clean energy can expand simultaneously. As Chris Saltmarsh emphasises, continued Chinese reliance on coal should not be interpreted as fossil fuel interests capturing a weak state. The Communist party retains powerful mechanisms for disciplining state-owned energy companies. The central problem is political willingness. Building renewable capacity and closing coal assets are politically very different processes: the former creates factories, technologies, exports and employment, whereas the latter strands capital, destroys jobs and threatens provincial revenues and established institutions.
The decisive test of China’s transition is consequently not how much renewable capacity it can build, or how much high-quality and affordable electrotech kit it can churn out for the world – though these are certainly things we should be grateful for. It is whether Beijing can use its extraordinarily effective combination of planning and competition to manage the contraction of coal through plant retirements, credit reallocation, regional compensation and industrial restructuring fast enough.
The good news is that China is targeting roughly 3.5 TW of renewable capacity by 2030, including more than 2.8 TW of wind and solar, while electrification of transport, industry and heating, alongside data centres and rising household demand, will continue expanding the electricity system. If wind, solar, hydro and nuclear capture most incremental demand, coal plants can operate fewer hours while remaining available for peak demand, extreme weather, intermittency and geopolitical emergencies.
Implications for Labour
Labour should study China’s energy transition neither as a model to copy in its entirety (impossible) nor as a cautionary tale to dismiss (tempting). China has treated decarbonisation as a project of productive transformation: electrifying transport, heating and industry; building enormous amounts of generation and grid capacity; and making the equipment required for that transition at home. This has created a self-reinforcing “electrostate” direction that is just as concrete as the existing coalstate legacy.
One lesson is that energy security means reducing exposure to imported fossil fuels. Labour’s Clean Power 2030 programme already points in this direction, but the Chinese comparison suggests that the objective should be to anticipate the increased demand that will result from AI and transport electrification. Another is to connect electrotech deployment to manufacturing. Britain should not spend hundreds of billions electrifying its economy while importing most of the turbines, batteries, transformers, power electronics, heat pumps and industrial machinery required. The transferable Chinese lesson is to set long-term capacity targets, build infrastructure ahead of demand scale-up, direct patient capital towards strategic technologies and then make multiple firms (including from China) compete over cost, quality and technological improvement. The next step is to make public equity a larger part of this architecture, using China’s industrial guidance funds or the European Scaleup Fund as models. Britain is good at producing green start-ups and technologies, but poor at turning them into large domestic companies powering a new growth model. Rather than relying predominantly on grants, loans and guarantees, publicly-owned financial entities should take equity positions in promising firms attempting the expensive leap from demonstration to mass production. This way, if they succeed, taxpayers retain an asset rather than merely subsidising private gains.
Automation should be part of the same bargain. To produce British electrotech at prices that do not generate another ‘greenlash’, Labour should encourage rapid automation of British manufacturing by tying public support to this process. Britain should remain willing to buy inexpensive, high-quality machinery – including Chinese industrial robots – whenever security risks can be pragmatically managed. Cheap automation solutions, combined with cheap electricity and the state’s stronger capacity to co-plan global value chains, could sharply reduce the capital cost of rebuilding manufacturing and sustaining high wages in the sector.
China has constructed enormous constituencies with “skin in the game” in electrification: manufacturers, engineers, local governments, skilled workers and financial institutions whose material interests increasingly depend on continued green investment. Britain needs its democratic equivalent: a coalition between green capital and organised labour. Public investment and procurement should help construct durable industrial clusters in places that have lost manufacturing capacity, while attaching labour standards, apprenticeships and domestic supplier development to public support. Decarbonisation is harder to reverse when it creates factories, exports, skilled employment and lower energy costs. Every new gigawatt should strengthen not only the electricity system but the political constituency for building the next one.
China also provides a warning. Its transition remains a dual-energy system in which spectacular renewable expansion has coexisted with coal, partly because of the interests of coal companies, provincial governments and workers invested in an energy-hungry growth model. Britain faces a milder version of this problem with gas. Labour should retain sufficient dispatchable capacity for security during the transition but avoid allowing “energy security” to become an argument for permanent fossil dependence. Grids, storage, interconnection and flexible demand should progressively make gas generation less necessary.
The goal, then, should be to build a British electrostate suited to democratic institutions: abundant cheap clean electricity; aggressive electrification that cuts imported fossil-fuel exposure; domestic manufacturing anchored to the deployment boom; state equity that helps firms scale; planning combined with hard competition; and automation linked to higher wages and stronger labour institutions. Decarbonisation will be politically durable when it represents abundance, lower costs of living, productive capacity and geopolitical autonomy.
