The issue is whether that irritation can be managed through rules, domestic renewal and cooperation or further fragments the world economy
3-MIN READ3-MINChristine LohChristine Loh is chief development strategist at the Institute for the Environment, Hong Kong University of Science and Technology. Published: 5:30am, 5 Jul 2026There is something odd about the debate on China’s “overcapacity”. Europe says the world needs cheaper and faster clean energy deployment, yet complains when China produces the solar panels, wind turbines, batteries and electric vehicles that make this possible.Bruegel, a Brussels-based think tank specialising in economic policy, recently published a working paper, “To what extent can green infrastructure investment mitigate China’s clean-energy overcapacity?” It argues that China’s industrial policies made it the global leader in renewable technologies but at the cost of severe overcapacity, falling prices and weaker profitability.China has enormous production capacity, but it has also deployed renewable energy at extraordinary speed at home, and exports have grown because prices are attractive. The question is not simply whether China produces too much. It is why the same scale can be seen as a threat by some economies, a climate opportunity by others, and both at once by some.
Yet China’s success creates discomfort. Other economies see manufacturers squeezed, worry strategic industries will disappear, and fear dependence on one country for future technologies. These concerns are understandable. But they are not proof that China has violated any settled international principle.
