AI Vibes: Development of China's new energy industry conforms to market economy laws

(People's Daily Online) 15:32, June 04, 2024

The rapid development of China's new energy industry is fundamentally driven by the country's commitment to green and low-carbon transformation, its economy of scale, and comparative advantages built over years of growth.

China introduced relevant laws and policies relatively early, putting into effect the Renewable Energy Law on Jan. 1, 2006. The country also proposed developing solar power, new energy vehicles (NEVs), and other low-carbon industries in its medium- and long-term development plans for renewable energy and the restructuring and revitalization plan for auto industry in 2007 and 2009, respectively.

With the swift development of renewable energy sources such as wind and solar power, China achieved its target of a 15-percent share of non-fossil fuels in primary energy consumption in 2019, one year ahead of schedule.

Since China announced its carbon peaking and carbon neutrality goals in 2020, its new energy industry has shifted to large-scale, market-driven development.

China's economy of scale helps foster a comprehensive and competitive new energy industrial chain.

On the one hand, the added value of its manufacturing sector accounts for around 30 percent of the world's total. China boasts prominent systematic advantages, with a complete range of industrial categories and a sound supporting system. After years of accumulation and development, the country has established relatively complete new energy industrial and supply chains.

On the other hand, China's super-large market enables companies to rapidly dilute costs, allowing them to leverage the low-cost, high-performance advantages gained from domestic competition to go global with strong international competitiveness.

China's immense market also provides ample opportunities for various technological and business innovations, allowing genuinely competitive products and companies to grow quickly in line with industrial upgrading.

Long-accrued and dynamically evolving comparative advantages underpin China's new energy boom.

China has emerged as a world leader in new energy vehicles (NEVs), wind power, and photovoltaics technologies. Between 2016 and 2022, Chinese patentees secured 178,000 out of 558,000 patents granted globally in these fields, representing 31.9 percent of the total.

The country's new energy sector is bolstered by a large, diligent workforce, with around 5.55 million people employed in China's renewable energy industry in 2022, representing nearly 40 percent of the global total, according to a joint report by the International Renewable Energy Agency and the International Labour Organization.

China's skilled engineering teams have attracted multinational automakers to establish new energy research and development centers in the country.

In 2023, Volkswagen opened its largest overseas R&D hub in Hefei, Anhui Province, to develop intelligent connected NEVs.

Rising capital abundance has significantly sustained China's capital-intensive new energy sector, with the country developing advanced infrastructure assets such as railways, power grids, transportation pipelines, energy storage facilities, and charging piles to support the sector's growth.

As the world's second-largest digital economy, digitalization has dramatically improved the manufacturing and logistics efficiency of China's new energy sector, enabling timely customer response, more active innovations in technologies and business models, and more rapid iteration of products and technologies.

In December 2023, Aion, an electric vehicle brand under China's Guangzhou Automobile Group, was recognized as a member of the Global Lighthouse Network (GLN) for its smart eco-factory. This recognition makes Aion the only NEV manufacturer worldwide to achieve lighthouse status.

As automakers, chipmakers, software houses, and telecom firms seek integration, and technologies, including autonomous driving and intelligent connected vehicles, continue to evolve, smart applications and services have seamlessly integrated vehicles with social activities in China.

(Web editor: Sheng Chuyi, Wu Chengliang)


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