2035 is a critical year for China’s development, and clean energy sectors will play a crucial role in reaching the country’s development objectives. By 2035, the country plans to achieve major breakthroughs in core technologies and become a global leader in innovation. In particular, ‘new quality productive forces’ and the ‘new three’ — electric vehicles (EVs), batteries, and solar photovoltaic (PV) — are meant to play a central role in this. Crucially, China also aims to transition from export- and investment-led growth to domestic demand-driven growth, emphasising the ‘dual circulation’ strategy. At the same time, carbon emissions are to decline after the peak, alongside an improved environment with eco-friendly work practices and lifestyles to achieve the goal of a ‘Beautiful China’.
Clean energy industries provide a significant opportunity for China to achieve all of these goals. Clean energy is no longer a marginal sector. In fact, it is rapidly becoming a major industrial engine. In 2024, clean energy sectors already accounted for 10% of the GDP and 25% of GDP growth, overtaking the value of real estate sales for the first time. By 2035, these sectors could double in size, rivalling traditional economic growth sectors and bringing about China’s industrial transformation.
This briefing examines the economic benefits to China of setting ambitious clean energy goals and policies domestically in its upcoming 15th Five-Year Plan (FYP) and promoting strong targets globally.
Key takeaways
- Beyond economic contributions to China’s GDP, clean energy sectors could also cut China’s emissions by 30% compared to current levels, enabling emissions reductions in line with the Paris Agreement.
- China’s clean energy industries could double in value by 2035, adding CNY 15 trillion (USD 2.1 trillion) to the economy, if China and the world’s other large markets follow Paris Agreement-aligned emission targets.
- This expansion in clean energy would make an important contribution to China’s target of becoming a moderately prosperous country in a decade, delivering one fifth of the targeted GDP growth in 2035.
- The contribution of clean energy sectors of CNY 29 trillion (USD 4.1 trillion) under the optimistic scenario would be comparable to the current total GDP of Germany or Japan.
- The sector’s success would be driven by both domestic demand and global market growth, with clean energy becoming a central pillar of China’s transition to high-quality, innovation-led development.
- This shows the economic benefits to China of setting ambitious clean energy goals and policies domestically in its upcoming 15th Five-Year Plan (FYP) and promoting strong targets globally, including through the upcoming nationally determined contributions (NDC) to the United Nations Framework Convention on Climate Change (UNFCCC).
Figure 1 – Economic contribution of China’s clean energy industry in different scenarios
Source: CREA analysis
