China's Technological Dominance Reshapes Global Energy and AI Markets

Beijing, China. In the sprawling AI computing hubs of Shanghai and Shenzhen, researchers work around the clock, optimising algorithms on domestic hardware while their counterparts in Beijing coordinate a national venture capital fund worth US$138 billion. This coordinated effort represents China's strategic push to lead the global artificial intelligence race, even as the United States maintains export controls on advanced chips.

"China is going to win the AI race," Nvidia CEO Jensen Huang declared at a recent London summit, suggesting Chinese competitors were just "nanoseconds" behind their American counterparts. His assessment highlights the intensifying technological competition between the world's two largest economies, with China leveraging its scale, state-guided investment and research talent to close the gap.

The geopolitical context is defined by what experts call "techno-nationalist globalisation," where major powers view national ownership of advanced technology as core to their security and geopolitical rivalry. The Trump administration's ban on selling China the most advanced chips has galvanised Beijing to accelerate domestic innovation, with Chinese researchers optimising algorithms to perform efficiently on local hardware.

China's research dominance is already evident in key areas. At the 2025 International Conference on Computer Vision, half of all research paper authors were affiliated with Chinese institutions, far ahead of the second-placed United States at 17%. This strength stems from Beijing's 2017 artificial intelligence development plan, a national strategy to make China the world leader in AI by 2030.

Greg Slabaugh, Professor of Computer Vision and AI at Queen Mary University of London, notes that "China's combination of scale, strategy and coordination gives it a real prospect of emerging as the world's leading force in AI development and deployment." With 1.4 billion people generating massive data volumes and producing more science PhDs than anywhere else, China creates a self-accelerating loop driving both research and industrial adoption.

Yet the United States maintains significant advantages. It boasts all of the world's top ten AI firms by market value and 37 of the top 50, with Nvidia becoming the first company valued at US$5 trillion. The US commands 39.7 million petaflops of AI compute power - half the world's total - compared to China's 400,000 petaflops, ranking seventh globally.

Sean Kenji Starrs, Lecturer in International Development at King's College London, argues that "the massive headstart that US rivals have will likely only grow as they continually have unrestricted access to the world's most advanced chips, as well as capital spending of hundreds of billions of dollars. This is a marathon for the long-term, not a dash, and China is running with much weaker legs."

Parallel to the AI competition, China has established dominance in clean energy that is reshaping global markets. As COP30 convenes in Belem, Brazil, the real shift in climate action is already visible in global energy markets, with China at the centre of the clean energy transition.

By the end of 2024, China had already surpassed its 2030 target for installed wind and solar capacity, reaching about 1,400 gigawatts, according to the National Energy Administration. This year, renewable capacity overtook fossil fuel power for the first time in the country's energy mix.

The International Energy Agency projects that China will account for nearly 60% of all new global renewable power capacity installed through 2030. Industrial scale has driven down the cost of solar modules, wind turbines and batteries to levels that make clean power competitive without subsidies in most regions.

China now controls more than 80% of the world's solar manufacturing supply chain and dominates production of electric vehicles and storage batteries. These developments are reshaping the global cost base, with every investor portfolio exposed to energy, infrastructure or commodities now reacting to how China prices and deploys clean technology.

The ripple effects extend across global markets. Inside China, overcapacity in solar manufacturing has led to fierce price competition, with the country's six largest solar producers reporting combined losses of about US$2.6 billion in the first half of 2025. Outside China, the transition supports suppliers of copper, lithium, nickel and rare earths, as well as grid operators and logistics companies serving new energy infrastructure.

Credit markets are evolving in parallel, with green and transition bonds linked to Chinese exports multiplying. Emerging market issuers are financing renewable projects built with Chinese technology, creating a new layer of investable debt and strengthening balance sheets tied to the energy transition.

Private equity and infrastructure funds are positioning accordingly. Belt and Road energy projects that once relied on coal now focus on solar and wind, with regional developers securing Chinese components to meet domestic decarbonisation targets. Clean power is shifting from a cost to a growth engine across multiple regions.

Still, challenges remain. China's grid struggles to absorb the rapid expansion in renewable generation, some provinces face curtailment, and local debt constraints slow new approvals. Coal remains an important stabiliser of power sources, though the percentage of clean power generation continues to rise.

The investment implications are clear. China's dominance has made clean energy the world's most powerful source of cost deflation in real assets, driving new cycles of industrial demand, commodity use and infrastructure spending.

Industrial ecosystems of this scale cannot be duplicated quickly, representing decades of accumulated capital and experience. Energy security, competitiveness and productivity will increasingly depend on access to China's clean energy ecosystem, with economies that hesitate to engage risking both growth and influence in the decades ahead.

As technological competition intensifies and climate action accelerates, China's dual dominance in AI and clean energy positions it at the centre of two defining global transformations. The combination of technology, capital and industrial discipline emerging from Chinese cities is setting the direction of economic opportunity across Asia, the Middle East and Africa, creating a new global economic reality that markets and governments must navigate in the years to come.

China | Technology, Energy, International Relations | | slashnews