Some data on how Trump is helping China by opposing green energy

Trumps' attacks on green energy are actively helping China overtake the USA

Trump is accelerating America’s industrial eclipse by China. Trump boasts his hatred of green energy in a White House document pithily entitled ‘ENDING THE GREEN NEW SCAM’ (see HERE). Yet this is a disaster for the USA. Trump is fighting to defend declining American industries and to slow the progress of green energy. In doing so Trump is (inadvertently) helping China grow its industrial base at the expense of the USA.

As the data in this post shows the US, and the West in general is already far behind China even on a per capita production basis for green energy. China is taking over key parts of the world’s industrial economy. This includes solar PV, EVs, batteries, soon wind power and, in the future, (electric) aircraft production as well.

Green energy and energy security

Ten years ago I was researching for a book I wrote about China and carbon emissions (See HERE). I found that the opinion poll evidence I saw suggested that the Chinese as a people were more concerned about climate change than western countries. According to Carbon Brief (see HERE). China’s carbon emissions have, if anything, fallen over around the last year (2024-25). They may or may not plateau in the next few years. But whether they do or not, production from China’s green energy industries threaten to bury the West’s increasingly lacklustre efforts.

As I also argued in my book, an overriding reason for China’s move towards green energy technologies was energy security. The energy security advantages for China of green energy are clear - it reduces imports of oil, gas and coal from abroad. But green energy gives the same advantage for everybody else. This is even countries that are currently fossil fuel exporters, like Saudi Arabia, who can get paid more money if they sell their products abroad. They can provide their energy needs very cheaply with solar power. The oil and gas that would be used can be sold for a much higher price abroad than it is worth supplying domestic needs.

Nevertheless the Danish originators of the green energy revolution who put together backyard-assembled wind turbines at the end of the 1970s did not know much (then) about the climate crisis. But they did know that green energy was good for energy security. Besides this, it is not just western greens that want green energy - it is the rest of the world as well. 93 per cent of new electricity generation in the world (led by solar PV) came from renewables in 2024 (See HERE). That is because they are cheaper than everything else! - And also they are much less prone to the wild swings in prices when fossil fuel prices spikes happen.

Rapid expansion of renewable energy is crucial for combatting climate change. On the other hand, producing and consuming more and more renewable energy will not in itself stop climate change. We need a lot more than just more renewable energy. But building up the green energy industries is essential if superpowers want to continue to be……superpowers. Building green energy is what China is doing in a very efficient and successful way. Yet in the USA Trump and his political allies wish to defend the declining energy industries and associated technologies and block green energy. This Trumpian strategy is industrial suicide.

In reality Biden’s efforts in the ‘Inflation Reduction Act’ (IRA) represented a partial, last-gasp, effort to plough money into green energy technologies to head off the challenge coming from China. The IRA represented an attempt to build up US based renewable energy, battery and EV industries. But Trump will damage this in his so called ‘Big Beautiful’ budget reconciliation bill. This is on top of a string of restrictions and cancellations being meted out to renewable energy schemes. Trump and his anti-green allies are losers. They are big time losers who threaten to destroy American industrial prospects.

A stark comparison between the West and China

The comparison between China, the USA and the EU in terms of production of batteries, solar PV, electric vehicles (EVs) and wind generators can be seen in Charts 1,2,3 and 4 below. The charts compare production of these things between the USA, the EU and China on the basis of per capita production. Of course China can be expected to be ahead, ceteris paribus, given its population size of 1.4 billion compared to the USA’s 340 million and the EU’s 450 million.

Indeed, in absolute terms China’s production is stupendously ahead of western production. But what is startling is how far China is ahead of the USA in green energy production on a per capita basis as well. Indeed the same is true of the EU, apart from wind turbine manufacture (and China is set to overtake in that as well). That is what is shown in the Charts 1-4 below.

Even in the case of wind turbine production (Chart 4) , where per capita production in the EU is still higher than China, China is now rapidly catching up with the EU. It is doing so through exports outside the traditional markets of the EU and the USA (see HERE). China is likely to surpass the EU by the end of the decade in per capita wind turbine production. It is already well ahead of the EU ansd the US interms of absolute production of GWs of wind turbines.

With regard to solar PV modules, China’s position has been strengthened still further in the world since the 2021 data shown in Chart 1. 80 per cent of the solar PV modules used in the world today were made in China n 2024.

Chart 1 Solar PV Modules

Source: IEA

Chart 2 Electric Vehicles

Source: IEA and Autovista

Chart 3 Batteries

Source: IEA

Chart 4

Wind generator manufacturing

Source: Energy Digital

Why is China leading the West in green energy production?

Probably one word sums up the biggest factor in why China is winning in producing cheap solar PV modules and batteries: Automation. The West may produce a lot of start-ups and new ideas, but China is proving to be the master of industrial manufacturing (see HERE). Hannah Ritchie says, in the comparison between China and the USA in batteries: ‘The biggest factor in labour costs is automation. The US uses six times as many workers per GWh (I initially found these numbers pretty shocking and hard to believe), so it’s not surprising that labour costs much more. China has invested heavily in automation, meaning many processes run with very little human input.’ (See HERE). It is much the same story with other green energy technologies.

According to economic analysis of wage growth in China, industrial wages tripled in the period 2006-2015. This put a premium on automation to replace workers in order to maintain China’s competitive advantage in costs. This point is made by Daniel Susskind in his book (see HERE on page 211). He quotes data from Jack Gao, see HERE). Rather than low wages being the reason for China’s continuing success in manufacturing, it has been the stimulus of rising wages.

In the West the dominant narrative is that low wages and Government subsidies are the reason for China’s green energy success. The West is deluding itself. In fact Chinese green energy industry is way ahead of the West in applying software and AI to manufacturing. I understand that Chinese green energy engineers will freely talk to visting western engineers about their techniques, confident in the knowledge that the westerners are incapable of being able to make use of the knowledge!

China has grown its green energy industrial base through clear Government policies that have supported industrial production in the provinces and cities. Local officials get their advancement through effective execution of national policies which means supporting local companies start production. These local companies compete with each other, later producing big company giants like solar PV manufacturer Jinko Solar and battery makers BYD and CATL. They are not based on subsidies. They are based on cutting edge industrial competitiveness.

Recent advances

Chinese EV companies, led by BYD, are adept at choosing, and then manufacturing step change advances in batteries and EVs. One change has been the switch from mainly using nickel-cobalt lithium ion batteries to lithium iron phosphate (LFP) batteries and, now, to sodium ion batteries.

These are cheaper, have fewer metal resource problems and they have a lower fire risk. BYD and other Chinese companies are producing cheaper and cheaper EVs. Faced with this price-cutting fossil fuel vehicles may be on their way out sooner than we think!

According to Robert Llewellyn from ‘Fully Charged’: ‘BYD have 110,000 employees in its R&D department alone, and just this year passed 1 million total employees. They started out as a battery company back in the 1990’s. Their understanding and knowledge about batteries, along with CATL, is now way ahead of everyone else………They are now mass producing Sodium-ion batteries at a fraction of the cost of lithium ion batteries.’ (See HERE). BYD announced recently that it is ‘rolling out’ no less than 15000 ‘super fast’ chargers across China that will deliver 400 km worth of charge in just 5 minutes.

I remember when I was young (quite a while ago!) we used to look at new developments in the USA. We’d say ‘It’ll be here in 10 years time’. Now we have to look at new developments in China and say ‘It’ll be here in 10 years time’.

The signs of American industrial decline

The Chinese economy is still only two-thirds the size of the US economy. But if you look at the weakness of US exports I can see that this gap will close quickly. This process will be speeded up with Trumpist policies.

According to Shipping Solutions the top three as well as the fifth most valuable categories of exports are fossil fuel based. THe top US exports are:

‘1. Civilian Aircraft Parts

2. Oil

3. Gasoline and Other Fuels

4. Low-Value Shipments

5. Liquified Natural Gas (LNG) and Other Petroleum Gases’ (See HERE)

Oil and gasoline is under threat because of the growth of electric vehicles. When peak demand for oil is reached - maybe now not far away - the American oil frackers will be among the first to go out of business when oil prices drop. LNG exports are under threat from renewable energy. Around 40 per cent of LNG around the world is used in gas fired power plant, and they are going to be used less and less. Generally electrification is going to replace gas in the coming decades. Global electricity consumption has doubled over the last 25 years, and it should double again in less than 20 years time. That is the fast growing market, not oil or gas.

Without effective competition from Western based green energy industries China will capture most of the world’s markets in green energy. The West will lose an important chunk of 21st century industry. They West will also slow the energy transition in their own countries.

As for the USA’s strength in making aircraft parts, even that is under threat in the long term as electric airplanes are developed. CATL are testing battery electric planes. As batteries become lighter for a given energy storage this becomes more possible.

CATL say they will have an 8 tonne plane (which would carry around 30 people) ready for 2028 to travel up to 1800 miles (see HERE). Batteries with ever-improving energy densities will be produced, making battery electric aircraft more and more effective. Boeing have put together a ‘hybrid’ electric plane. However this prototype is still based on the fossil fuel model and is powered by biofuel. Oh dear……. I do not think this is going to go very far, probably literally! Unless the USA develops an effective battery industry to compete with China, it will lose its dominance of the aircraft industry, as well as a great deal else.

The EU is not, in general in a better position. Indications, for example by the German Government to loosen EU policy on a phase-out of fossil fuel cars will again only help China. The EU has not done anything like enough to build up its own green industrial capacity. There are calls for the EU to develop partnerships with Chna to develop battery production in the EU (See HERE).

Conclusion

The debate about the Budget Reconciliation Bill is dominated by real concerns that the legislation will simultaneously reduce taxes for the rich and reduce medical provision and food provision for the poor. The Administration’s attack on green energy receives less attention. It may be argued that Donald Trump is a big threat to the struggle for climate action. Certainly his efforts will not help the cause. But the thing that has not received as much attention as it should is that the attempt to block green energy by Trump and his associates is a major threat to the future of the USA’s economy.

The USA and the EU need to be doing an awful lot more to get solar PV, wind power, EVs, and battery industries going a lot stronger than they are, both for the planet but also for their own relative industrial survival. Instead the US Government is trying to cancel the modest incentives given to green energy by the Biden Government. In sum, through inaction both the USA and European nations risk their industries being sidelined by China.

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