The devastating floods along the China-Nepal border in late August highlight the growing political importance Beijing places on disaster response. After a glacier collapse triggered catastrophic flooding and landslides across Nepal and Tibet, President Xi Jinping ordered an “all-out rescue effort.” This is significant as during his nearly 14 years in power, Xi has rarely appeared at the frontline of a disaster, in stark contrast to his predecessors Jiang Zemin and Hu Jintao.

On August 28, Xi chaired a Politburo meeting focused on disaster response, while Premier Li Qiang travelled to Gyirong County in Tibet to oversee relief efforts. Both called for stronger monitoring and early-warning systems, as well as measures to prevent secondary disasters. The response was framed around “better coordinating development and security,” reflecting the broader elevation of disaster prevention and resilience not only by China’s leadership but also alongside priorities linked to security and economic development.

This growing political attention comes as extreme weather becomes more frequent and costly. In mid-August, Typhoon Dolphin brought record rainfall, flooding and landslides across eastern, central and northern China, forcing more than one million people to evacuate. Climate-related losses totaled CNY 42.14 billion (US$6.1 billion) in the first half of 2026 alone and are set to increase, given that most extreme-weather events occur during the summer months. More broadly, China’s leadership is increasingly linking the growing frequency and severity of extreme weather to climate change.

Disaster response is therefore becoming more than an emergency-management issue for Beijing. As the economic and social consequences of extreme weather become harder to ignore, the leadership is increasingly linking disaster preparedness, adaptation, and resilience to climate change—and treating them as essential to protecting economic development, national security and social stability.

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Political Elites Elevate Disaster Response

Xi’s comments on the China-Nepal border are the latest instance of increased attention on disasters from top leadership. At an April 2026 group study session of the Political Bureau of the Chinese Communist Party (CCP) Central Committee, Xi stressed that disaster prevention, mitigation, and relief should be viewed from the strategic perspective of both high-quality development and high-level security. Notably, he also made a direct link to climate change by emphasizing that extreme weather events have become significantly more frequent and destructive.

These links to climate change have continued in subsequent meetings and publications. In July 2026, Xi chaired a committee meeting that urged all regions and relevant departments to take solid measures to ensure effective flood control, drought relief, emergency responses, and disaster mitigation. It was noted that China would continue to face more extreme weather and climate events, with both droughts and floods posing significant challenges.

Most recently, “disaster prevention, mitigation, and relief capabilities” was the headline theme of the August edition of Qiushi, the official theoretical bimonthly journal of the CCP. Its inclusion and, more so, its headlining indicate that climate is a priority for leadership. The edition led with the full text of Xi’s April speech and included several articles on the theme of extreme weather response and resilience. One of the pieces, authored by the Party Committee of the Ministry of Emergency Management, reflects Xi’s thoughts on prioritizing disaster prevention, never “lowering the guard regarding risk prevention and control” and acknowledging that China faces the “long-term, complex, and severe nature of natural disaster risks.”

When viewed together, these interventions suggest that disaster response is being elevated from a technical responsibility of emergency-management agencies into a strategic concern of the Party-state. Climate change is increasingly part of this framing because it compounds the physical risks that Beijing already sees as threats to economic development and national security. This also places greater emphasis on climate adaptation, which means taking action to prepare for and adjust to current and expected climate impacts, including more frequent and severe extreme weather events.

From Beijing’s Priorities to Local Action

The importance of responding to climate impacts and continuing to develop better disaster response is not only seen in Xi’s rhetoric but also in national-level policies. China’s “15th Five-Year Plan (2026–2030) for National Response to Climate Change”, released in July, calls for stronger climate-risk assessments and responses to extreme weather, alongside measures to build more resilient cities, food systems and health infrastructure.

Following suit, the Ministry of Natural Resources in August similarly shifted its approach to geological disasters, from a focus on individual hazard sites toward the management broader risk zones. Its “National Geological Disaster Prevention and Control ‘15th Five-Year Plan’ Implementation Plan” includes relocating around 50,000 households from high-risk areas, more than 4,200 engineering projects, expanded monitoring and early-warning systems, and greater use of big data and AI to improve disaster management coordination between national and provincial authorities.

China’s provinces and cities retain significant responsibility for translating national priorities into local action, reflecting the “一城一策” or “one city, one policy” approach, which recognizes differences in local topography and climate risks. In 2024, China’s Ministry of Ecology and Environment (MEE) deepened pilot projects aimed at building climate resilience in 39 cities while also creating unique provincial level action plans for adaptation that include sponge-city measures and risk-assessments. However, continued funding and capacity support is needed to ensure local governments do not have to choose between longer-term adaptation projects and immediate development and economic growth needs.

At the local level, citizens are increasingly engaging with climate impacts. On Douyin and Xiaohongshu, two of China’s most popular social media platforms, users share firsthand accounts of their experiences with extreme weather. During a July 2025 heatwave in Chengdu, Xiaohongshu users posted photos and videos showing parts of the city’s metro being used as a refuge from extreme heat and humidity. Research shows that during typhoons, climate impacts posting on Chinese social media rose from 41.74% to 48.97%. While this does not mean that every individual disaster is explicitly attributed to climate change, it suggests that extreme weather events can heighten public awareness of their connection to climate change.

This growing visibility of climate impacts is also reflected in public opinion: a 2024 UNDP survey found that 68% of people in China said climate change was affecting major decisions in their lives, while 39% said they were more worried about climate change than the previous year in the context of changing extreme weather. 71% also supported greater protection for people vulnerable to extreme weather.

What Does This Mean for China’s Domestic Governance and Global Diplomacy?

Domestically, disaster response, adaptation, and resilience are increasingly being framed as matters of national security and economic resilience, aligning with Xi’s broader emphasis on high-quality development, technological innovation, and social stability. The political question is therefore shifting from whether Beijing recognizes these risks to whether the Party-state can translate this increasingly clear top-level priority into adequately funded and coordinated action at the local level, where frontline implementation will take place.

For energy policy, this will also have implications as climate resilience becomes increasingly intertwined with the need to protect power infrastructure, manage rising electricity demand during extreme heat, and ensure reliable energy supplies amid droughts, floods, and other disruptions. As China’s economy becomes more electrified, the resilience of its power system will become an increasingly important component of energy security.

Diplomatically, disaster resilience offers China an opportunity to position itself as a provider of practical climate solutions while advancing Xi’s broader goals around global governance. At COP29, China launched the Action Plan on Early Warning for Climate Change Adaptation (2025–2027), while Vice Premier Ding Xuexiang announced a South-South cooperation initiative providing developing countries with meteorological observation equipment, early-warning systems, and technical training.

China’s pioneering of early-warning systems, like MAZU (Multi-hazard, Alert, Zero-gap and Universal), and its applications of AI, drones, and autonomous technologies for weather forecasting and disaster response allow Beijing to align several interests, including strengthening South-South cooperation, expanding the role of Chinese technology, and building diplomatic influence in an area where demand is growing rapidly. These technologies also give Beijing a practical way to demonstrate the benefits of Chinese innovation.

Beijing clearly understands the need to adapt and the implications on national security and economic development implications. The next challenge is turning this political recognition into sustained investment and local capacity—and, in parallel, determining how the technologies developed to manage these risks at home can support China’s wider ambitions abroad.

I visited Beijing for several weeks in June and July for a series of intensive dialogues with Chinese policymakers, advisors, corporate leaders, think tank experts, journalists, and foreign diplomats. My meetings covered a broad agenda, including China’s energy and climate strategies and industrial policy, its trade and economic relations with other nations, and its evolving view of China’s international responsibilities. Drawing on these exchanges, I offer five observations.

1. China’s economic strengths and weaknesses are strikingly visible in one sector: electric vehicles (EVs). My schedule of six to seven meetings a day in Beijing meant numerous Didi rides. For a clean tech analyst, those trips also gave me ample opportunity to observe China’s EV ecosystem up close. The variety of EV brands, positive user experience, and attractive technologies on offer in China are all well documented. Many of Beijing’s shopping malls have been repurposed as EV showrooms, showcasing China’s industrial prowess. But the sheer prominence of the sector also reflects the economy’s deep imbalances.

Following the bursting of the real estate bubble, China has struggled to identify new growth engines and appears increasingly reliant on a narrow set of sectors, including EVs, to sustain growth. But even that momentum has slowed. Passenger EV sales decelerated in June on a year-over-year basis. The service economy also remains depressed, and economic pessimism has become widespread. A contact at a leading carbon consultancy reported that most of their government contracts have dried up due to local budget constraints and that the firm has shrunk to one-third of the size it was five years ago. The NGO sector, meanwhile, is entering a period of contraction. Many organizations have frozen hiring after two decades of rapid expansion, though this retrenchment appears to be driven less by the broader economic slowdown than by funding uncertainties stemming from geopolitical tensions.

2. China’s industrial ecosystem is not only more cost-competitive but increasingly greener than production in other countries. In three separate conversations, my interlocutors pointed to new developments in China’s industrial ecosystem that are reinforcing China’s advantage: new aluminum production is relocating from coastal provinces to western China in order to leverage large-scale renewables; European chemical companies that initially moved to China for cost reasons are now finding their local production less carbon-intensive; and green iron ore production, or the processing of iron ore with minimal carbon emissions, is becoming more cost-competitive in China than in Australia, thanks to renewable energy integration. These examples all tell a larger story of how abundant, cheap green energy is beginning to fundamentally reshape China’s industrial landscape. The West’s advantage in lower-carbon production is steadily eroding while Chinese analysts expect China’s competitive lead to widen further. A presentation from a leading research agency explored a critical strategic question: What are the chances that other countries will surpass China in clean tech competitiveness, whether through incremental sector development or disruptive technological breakthroughs? The agency’s conclusion—based on detailed technology-specific analysis, supply chain mapping, and market share breakdowns—was that overtaking China in the most consequential and widely deployed low-carbon technologies is unlikely. This view is shared by a battery expert, who emphasized the accumulated engineering know-how Chinese companies have built up through years of manufacturing—expertise that is difficult to transfer and almost impossible to replicate in places lacking production capacities.

3. Economic and trade tensions, most notably between Brussels and Beijing, are likely to persist and will require fresh perspectives to manage effectively. China’s international relations experts are not optimistic about the EU-China relationship, acknowledging the direct economic competition between two parties. Some have even posed a provocative question: Will China lose the EU in the same way it lost the United States? Others have countered with the reverse: Will the EU lose China? While the relationship appears to have avoided an immediate escalation following the European Council’s mid-June meeting on China, recent interactions, including PRC Commerce Minister Wang Wentao’s visit, seem to have generated little goodwill. Both sides will almost certainly dig in ahead of the next European Council meeting in October, and Brussels will pay close attention to the September Trump-Xi meeting in the United States.

The bottom line is this: the direct conflict of economic interests between China and the EU is real and will remain a feature of the relationship. If both sides insist on rhetorical confrontation, it will generate endless friction. The danger is that these tensions may ultimately lead both sides to pursue policies that work against their own interests. Clear examples already exist. In clean tech, for instance, there is a persistent tendency to overstate the economic benefits of domestic production while underappreciating other parts of the value chain. In the solar sector, for example, installation generates more jobs than manufacturing. In the auto sector, vehicle sales and leasing, as well as an increasingly broad range of business models built around EVs, also generate substantial jobs and economic value. The broader industrialization debate could also benefit from articulating the “win.” Rather than rhetorically championing diversification or domestic production, policymakers from both sides need to specify exactly how much should be reshored, to where, at what cost, at whose expense, and on what timeline. Instead of focusing primarily on industrialization “inputs”—subsidies in the U.S. context and regulations in Europe—the expected “outputs” and “outcomes” also need to be clearly articulated. For example, how many leading companies should be in Europe, or what percentage of completely “China-free” domestic production in a given sector should be expected by 2030, and what level of subsidies or policy intervention would be required to get there?

4. The Strait of Hormuz closure has both reinforced China’s energy security strategy and prompted it to evolve. According to China’s oil experts, a combination of measures has helped to drive a sharp decline in oil imports in recent months: reducing spot and long-term purchases in response to high oil prices, suspending commercial and strategic reserve purchases, releasing reserves onto the market, imposing export controls on refined products, clearing warehouse inventories, and rapidly adopting EVs. In addition, the coal chemical sector played just a minor supporting role in reducing dependence on foreign energy supplies. The prevailing sentiment in Beijing is that this comprehensive set of measures, many of them planned and executed over years, has served China well during the current global market volatility. My Didi drivers concurred, telling me that the fuel cost of an EV is at most one-fifth that of a gasoline vehicle in Beijing and sometimes even lower. Some said they would not be in the ride-hailing business at all with a conventional vehicle. Indeed, unless one drives a gasoline car or flies frequently (a fuel surcharge was imposed earlier in the war), the Iran energy shock seems rather remote in the daily life of a Chinese citizen.

The Middle East crisis has also subtly but importantly shaped China’s thinking on energy security. An oil sector executive highlighted a shift in priorities from ensuring supply security to ensuring supply stability—the former emphasizing sufficient volumes and the latter minimizing price volatility once those volumes are secured. Another important lesson is that energy security can come from not only securing supplies but also from maintaining flexibility in demand. Compared with the significant political push from the coal industry in 2022 following the Russia-Ukraine conflict, another expert observed that the Iran crisis did not seem to trigger a similar push from the coal sector. That said, Chinese officials largely maintain their existing position on new coal power plant construction, viewing coal power as an additional source of grid flexibility and pointing to continued growth in electricity demand as industries increasingly electrify. There is little indication that they intend to curb new construction. The coal chemical sector also emerges as a clear beneficiary, now bolstered by strategic considerations that diminish the force of environmental and economic counterarguments.

5. China’s sense of international responsibility is evolving, offering new structural opportunities for environmental advocacy. Chinese experts noted that recent policy documents have taken an important step, vowing to “firmly” take the lead (从“引领”到“坚定引领”) in multilateral governance—a phrase first used in 2017 during the first Trump administration and a sign of the leadership’s resolve to take a more proactive role. China’s strategic community appears to be moving ahead of its climate community in thinking about the country’s global role. In their view, China’s expanding global interests increasingly require a more proactive international posture. This position will gradually shape downstream policy domains, including climate change, making climate responsibility an extension of China’s broader global strategy. Even conversations within the climate policy circles offer revealing insights into China’s perception of its future global role. The Chinese climate envoy and policy advisors all expressed hope that Washington would return to the UN Framework Convention and the Paris Agreement. This desire should not be dismissed as merely rhetorical. One could even ask: In an increasingly competitive relationship, why would China want the United States back in the multilateral climate system, only to face more pressure from Washington? The answer lies in a deeper shift in how China views its international climate position, particularly its cost-benefit calculus. As the world’s dominant producer of clean energy technologies, Beijing increasingly sees ambitious global climate action as advancing its own economic interests. Sustained American absence, in China’s view, weakens the global demand needed to support that commercial opportunity.

Written by Kate Logan, Director of the China Climate Hub

In May, China’s power sector capacity breached 4000 gigawatts (GW) – exceeding the total magnitude of the U.S., EU, Indian, Russian and Japanese power sectors combined. The paradox of this scale, of course, is that China leads the world in clean power installations and is approaching a power sector based primarily on non-fossil sources while still burning the most coal of any country, accounting for over half of the global total.

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Beijing recently released its 15th five-year plan for building a new-type energy system, which introduced little by way of flashy new targets for clean energy or emissions control. But asking why officials avoided any surprises, along with a deeper read of the plan, can reveal useful insights about how domestic policymakers are approaching China’s energy transformation. In particular, three points deserve attention from those aiming to understand how Beijing intends to thread the needle between the triple imperatives of economic growth, energy security, and decarbonization.

First, the plan centers the next phase of China’s efforts to safeguard its energy security as it emerges from the Hormuz energy crisis relatively unscathed.

Recent weeks have seen a flurry of media coverage declaring China to be the “winner” from the Strait of Hormuz energy crisis. While some analysts were surprised by China’s relative ability to weather deep shocks to global energy markets, Beijing emerged from the crisis with greater confidence, reaffirming its conviction to double down on energy independence and self-sufficiency. The new plan places energy security at the center while outlining how officials plan to reduce China’s remaining import dependencies. This focus is evident from the opening paragraphs, which foreground compounding security risks while framing energy security and supply adequacy as the prerequisite for economic viability, technological innovation, and decarbonization.

The document outlines a variety of steps for further substituting imported fuels with domestic alternatives, while pledging that “energy imports will be diversified and controllable.” Major components of this strategy include expanding the development of coal-based synthetic fuels; expanding and commercializing green fuels, including by increasing green hydrogen output eightfold by 2030; and deepening electrification of heavy-duty trucking and marine shipping. In the power sector, natural gas, which already plays a minimal role in electricity generation, is to be constructed “rationally” while scaling up domestically produced gas turbines. China will also aim for 35 percent electrification by 2030, five years ahead of a newly proposed global target.

For China’s emissions, the implications of this strategy are likely mixed. On one hand, further minimizing oil and gas use and accelerating electrification will deepen reductions. However, even with the emphasis on green fuels, renewed political support for coal-to-chemicals investments risks unleashing a massive new emissions “bomb” – and one that may become increasingly difficult to track via official statistics.

Second, the plan’s emphasis on enhancing grid flexibility signals Beijing’s concern over high levels of “wasted” renewables, which are a bottleneck for both economic growth and decarbonization.

With newly installed wind and solar capacity growing at record rates in recent years, China’s relatively inflexible grid has struggled to integrate this sudden influx of intermittent power. Just last year, China added 434 gigawatts of wind and solar, a figure nearly one and a half times the size of Japan’s entire power sector. Official data now place renewable energy curtailment at just under the government’s recently-established limit of 10 percent, which was doubled from 5 percent last year. Analysts, however, believe that the actual curtailment figure is substantially higher than official figures suggest. High curtailment is impeding clean power from keeping up with

China’s rapidly growing power demand, which increased by around 5 percent last year, forcing greater coal consumption than it would be otherwise.

The solution – making China’s power sector more flexible – is at the core of the new plan. It includes a new target for the grid’s “regulating capacity” to rise by over 40 percent, which serves as a proxy for the grid’s adaptability. Details about how this will look in practice are vague, however, and the language seems to indicate Beijing’s intention to continue “bundling” coal alongside cleaner sources of generation. But several additional targets for 2030 provide a strong growth incentive for cleaner means of balancing load variation: raising “new energy storage,” which includes batteries, to 300 GW; increasing pumped-storage hydropower to 160 GW; and expanding vehicle-to-grid capacity and virtual power plant capacity to 50 GW each. Some of these targets fall short of industry association benchmarks, but they are more ambitious than the objectives around clean energy installations – reflecting Beijing’s focus on making the existing system work better before adding even more new energy.

Third, the plan reaffirms Beijing’s shift away from control-based targets and toward an “additive” approach that leverages China’s clean technology dominance as the main driver of decarbonization.

For those hoping for firmer signals on how China will limit fossil fuels and cap its emissions, the new plan will disappoint. Although the overall 15th Five-Year Plan pledges to peak oil and coal consumption – and another recent initiative integrates oil and coal use totals into local cadres’ evaluations – the new energy plan provides no additional details about the timing and level of such peaks. This is despite earlier indications in state media that oil consumption will likely peak around 2026 and coal consumption around 2027. On renewables, the plan mostly consolidates existing targets, including 2030 goals for non-fossil energy to account for 25 percent of total energy consumption and for “new energy generation” – i.e., wind and solar – to reach 30 percent of total power generation. An additional, new target for all non-fossil sources to comprise over half of power generation would still leave room for overall emissions to rise.

From Beijing’s perspective, these conservative renewables targets and the absence of hard caps on fossil fuels allow China the flexibility to grow its economy and weather potential geopolitical shocks while remaining on track to peak its emissions before 2030, as Xi pledged in 2020. They also underscore that Beijing’s level of ambition is likely to be driven less by climate commitments than by economic incentives from its leading clean technology industries, as my colleagues Neil Thomas and Guoguang Wu argued in a recent CCA report. Innovation will be an important part of China’s recipe: the plan puts forth new targets for international patent applications to rise by 5 percent and for over 100 “first-of-its-kind” demonstration projects to be launched by 2030. The plan also elevates a May 2025 policy calling for computing power demand to be met with green sources, marking the first time that “computing power” was referenced in a national energy plan.

Observers may debate whether Beijing’s new energy strategy meets the moment, especially whether it balances economic and security interests with the realities of climate change: in 2025, China suffered over $35 billion in economic losses from natural disasters, and Xi recently chaired a Politburo study session on emergency management in the wake of disastrous flooding in China’s Southern regions this year. Even without ambitious targets, however, Beijing would argue that it has already demonstrated the essential role of electrification for bolstering energy security in a volatile world. With an electrification rate significantly higher than those of the United States or Europe, China may also be better positioned to transform a wide range of industrial sectors while reducing both energy costs and carbon emissions.

We’re glad to have you here for the inaugural issue of the China Energy Brief, a monthly newsletter from the China Climate Hub. Each issue offers forward-looking, evidence-based insights into the forces shaping China’s green tech and energy action—and what it means for the U.S. and beyond.

This month, we take you onto the floor of the world’s largest-ever Beijing Auto Show, where the future of the electric vehicle industry was on full display. Beyond the gleaming new models, we unpack two trends with far-reaching implications: the accelerating global push of China’s cleantech exports, and how those tailwinds are reshaping Beijing’s leverage in its dealings with the rest of the world.

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China Energy Brief: Issue 1

Written by Kate Logan, Director of the China Climate Hub

The Beijing Auto Show was held from April 24 to May 3, setting an official record as the world’s largest auto show by both scale and vehicle count. What was once a standard car exhibition has morphed into a showcase for the forefront of electric vehicle innovation. I visited this year’s show, which coincided with the lead-up to Trump’s recent summit with Xi in Beijing and took place as the global energy crisis from the Iran conflict entered its third month. Beyond the shiny new car models, two important trends reflect how China and its leading firms are approaching their global strategies.

First, China’s cleantech exports will grow even stronger, which will pivot cleantech companies’ hypercompetitive mindsets into the global domain.

The official tagline of the Beijing Auto Show was translated as “future of intelligence.” But a secondary, unofficial theme permeating countless booths was “made in China, for the world”—underscoring the shift from serving the domestic market to serving overseas consumers. This trend is driven by both domestic and international factors.

Within the Chinese market, demand for EVs and other cleantech is waning, especially as incentives are removed and prices and purchases adjust accordingly. Weakening demand started “pushing” Chinese cleantech exports toward global markets well before the current energy crisis. One analyst shared that they had to revise their earlier projections that EV exports would slow by mid-2025 after observing sustained strong flows, especially in markets with few trade barriers, such as Australia and the Philippines. Export growth has been further amplified in recent months by the “pull effect” from international consumers looking to take advantage of low-cost clean energy amid spiking fuel prices. In April, domestic auto sales fell for the seventh straight month and were down 21.6% year-on-year, while EV and plug-in hybrid exports surged to more than double the same month a year prior.

Amid the Auto Show’s 17 massive exhibition halls spanning two separate conference centers, nearly every major automaker showcased a new, competitively priced luxury electric or hybrid-electric SUV—a trend that surprised me given the international obsession with China’s uber-affordable electric sedans, such as the BYD Seal. The factors elevating SUVs to the forefront reflect shifting market dynamics. Some of these vehicles will be sold domestically in an attempt to recover declining revenues. But with many of these models appearing nearly identical, many brands emphasized their desire to court global consumers, especially in high-end markets, including the Middle East. In Europe, hybrid vehicles are not subject to the same tariffs as EVs, paving the way for these battery-electric hybrids to make greater inroads.

While the show was about cars, batteries were the real stars. Attendees clustered around the pavilions of CATL and BYD’s battery arm, both of which featured cold chambers to showcase their batteries’ consistent performance even in Arctic environments ranging from –30 to –50 degrees Celsius (approximately –22 to –59 degrees Fahrenheit). While BYD emphasized the speed of its flash chargers—“ready in 5, full in 9”—CATL’s centerpiece was battery swapping, with a working model demonstrating the speed and convenience of swapping. CATL has touted its use of large language models (LLMs) to revolutionize battery chemistry research, thus freeing up revenues to spend on other areas of its global strategy.

The technologically sleek, all-electric vehicles of Chinese firms stood in contrast to those of several legacy foreign automakers, such as BMW, Audi, and Mercedes-Benz, which positioned some of their most historic vehicles as the centerpieces of their pavilions—as if to remind consumers that they had invented the internal combustion engine that powered the original automobile revolution.

Second, the tailwinds behind China’s exports have empowered Beijing to wield its leverage in responding to various demands from other countries.

In the weeks before the Trump-Xi Summit, letters emerged from House Democrats and Republicans, respectively—followed by bipartisan House and Senate bills—urging President Trump to prevent Chinese EVs from entering the U.S. market. Legislators feared he might strike a deal with Xi, akin to Canadian Prime Minister Mark Carney’s offer, in which Canada would import a limited number of Chinese EVs in exchange for Chinese investments into Canada.

But few in Beijing were closely following each escalation of this American pushback. Instead, Chinese players are eyeing more compelling opportunities elsewhere. This dynamic is perhaps also underscored by the Chinese companies invited by Xi to the state banquet with Trump during the summit: the overall absence of China’s cleantech darlings, save for perhaps tech brand Xiaomi, reflects Beijing’s hesitation to push deals if Washington remains ambivalent about accepting them.

The lingering effects of China’s October 2025 export controls on rare earth elements and lithium-battery materials still loom large, with companies lacking confidence that bilateral relations are stable enough to guarantee that Beijing will renew its temporary suspension. Moreover, Chinese companies that had been pursuing deals involving international tech transfer in other markets are facing down bureaucratic uncertainty from their own government. As one example, Chinese battery maker Hithium’s proposed partnership with Indian renewable conglomerate Reliance has yet to move forward despite sustained efforts. The important role of China’s Ministry of Commerce (MOFCOM) as a closed-door arbiter introduces significant procedural uncertainty into potential deals; new State Council regulations on overseas investment will further compound this. Beyond bureaucratic factors, competition among leading cleantech firms with similar products is so intense that preserving leverage vis-à-vis rivals may further dampen companies’ willingness to share their technology.

Commercial interests are most attracted to those markets that have issued some sort of political signal that Chinese firms are welcome to invest. As one example, while cynicism abounds toward the EU’s proposed Industrial Accelerator Act—especially since Japanese and Korean firms would be exempt from the various strings attached to future Chinese investments—enthusiasm for the Spanish market remains strong in the wake of Spanish Prime Minister Pedro Sánchez’s trip to Beijing. Following the visit, SAIC Motor announced its decision to locate a new EV factory in Spain rather than Hungary, underscoring how political signals can tilt Chinese investment decisions even at the margins. Reports also indicate that wind manufacturer Ming Yang, fresh off a UK rejection on security grounds, is now eyeing the Spanish market.

These two trends will no doubt accelerate global electrification—but they will also pose tough questions for international markets, especially those struggling to preserve their local industries. As I wandered around the show, I could not help but wonder how long global consumers could resist the high quality and marked affordability of the products I was seeing. Will other markets continue doubling down on trade barriers, or will they reconsider them? And will Beijing be willing to engage with increasingly restrictive investment environments, or will it start abandoning them in lieu of those that welcome Chinese firms?

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