The window for the U.S. to have a chance to outbuild China in the race for what the Trump administration has dubbed global “energy dominance” may be closing.
According to a report out today from energy think tank Ember, China’s clean energy technology exports are rapidly approaching the scale of the country’s traditional “old three” export engines: garments, furniture, and appliances. In the first half of 2026, cleantech accounted for 6.6% of all Chinese exports, or $140 billion. That’s up from just 2.7% in 2020
This surge also comes as the country’s power demand grew by 5% last year — and all of it was met with clean power. That clean buildout pushed thermal (mostly coal) generation down slightly, even as total power consumption crossed a record 10.4 trillion kilowatt-hours. Just last week, solar beat out coal for capacity in China for the first time.
These aren’t unexpected numbers. Analysts have long predicted that China’s massive manufacturing buildout would eventually outpace domestic demand and transform clean technology into a dominant global export engine. Now that it has happened, China has enormous influence over global cleantech markets — but still consumes quantities of fossil fuels at home. China is home to the world’s largest coal fleet and remains the world’s largest crude oil importer.
But in an economy as massive and complex as China’s, Ember senior analyst Muyi Yang said, national aggregates aren’t particularly useful for understanding how the market is changing. A look at province-level coal generation and sector-specific fuel consumption, however, makes it clear that China’s energy transition has arrived at a turning point: from simply adding clean power to meet growing demand, to actually displacing fossil fuels more structurally. The tipping point has come in part as a result of the Iran war, he added, which has created a powerful push for countries to accelerate electrification.
Sub-national trends
Across 17 of the 26 regions Ember tracks across China, coal generation has slowed, flattened, or is in an active downturn, the report found. Those 17 provinces account for more than half of China’s total national thermal power capacity. Even large industrial hubs have seen a downturn; Shandong, for example, is home to several major ports and is one of the country’s most important manufacturing provinces, and coal generation there has decreased by 10% since 2021.
A parallel shift is visible across industrial end-uses. Many of China’s “light manufacturing” industries, like textiles and transport equipment, hit peak fossil fuel use years ago, Yang explained. But consumption is now flattening even in hard-to-abate heavy industries like metals smelting and processing.
Broadly, these sub-national shifts show China is moving beyond its longstanding “building before breaking” industrial policy, a guiding framework that focused on building out the scale and depth of the country’s clean energy system before attempting to displace the legacy fossil fleet, in order to maintain the country’s rapid pace of industrial growth.
Now, the economy is entering a new, far more demanding phase of “building while breaking,” Yang explained. Inside China, that will mean policy changes aimed at managing declining run-hours for legacy coal plants and financially cushioning the economic fallout for coal-dependent regions, Yang added.
For more on the U.S. electro-industrial race with China, listen to this episode of Open Circuit:
Outside China, it means the shifting focus from securing volatile oil imports to deploying physical energy hardware domestically is likely here to stay. That’s partly because other countries aren’t just importing the final energy technology product, like a solar panel, for example. They’re also investing further up the supply chain, Yang explained. Importing countries are increasingly using Chinese upstream components and raw materials to build out their own domestic industrial bases. He pointed to Southeast Asia, where economies are advancing from single panel assembly into solar cell and silicon fabrication.
There’s a debate in those countries around whether increasing cleantech imports from China will simply lock countries into a new form of dependency, Yang said. “But clean manufacturing sectors are gradually spreading into those economies, helping them leverage domestic advantages, climb the value chain, and build their own long-term industrial ecosystems,” he added.
The energy dominance gap widens
Far from stunting China’s international cleantech expansion, U.S. tariffs seem to have simply redirected exports into the global south. China’s solar imports to Sub-Saharan Africa grew by 37% year-over-year, while Brazil imported enough Chinese electric vehicles to drive a 300% surge in registrations. Pakistan, meanwhile, imported more than 50 gigawatts of Chinese solar modules to hedge against the volatility of fossil fuel import costs caused by tariffs and geopolitical disruptions.
Meanwhile, in the U.S., 2025 was the first year of net negative clean energy investment since at least 2012 — a $22 billion drop over 2024.
As Latitude Intelligence analyst Nick Zenkin wrote earlier this year, the “ping pong” of American federal energy and industrial policy has chilled long-term manufacturing investments and created chronic regulatory uncertainty.
It’s not clear that the Trump administration is actively trying to challenge China’s energy dominance, despite protectionist policies ostensibly aimed at doing so. Instead of taking China’s approach of adding new energy sources before phasing out legacy generation, the U.S. is actively removing certain forms of generation and replacing them with fossil fuels. Things like blocking large-scale wind and solar projects, slapping tariffs on imports, and doubling down on U.S. oil and LNG exports are positioning the U.S. toward a role as a commodity supplier, rather than a technological competitor to China.
