China supply chains will complicate energy transition

Significance

These include equipment manufacturing and critical metals. The United States and allied governments see this dominance as a security risk and are taking steps to reduce it. The issue is becoming more urgent due to the growing mismatch between supply and demand as countries worldwide prioritise the transition to green energy.

Impacts

• Chinese providers of clean energy technologies and their inputs will continue to drive down prices thanks to economies of scale.
• The quality of China's green energy technology has risen significantly, but its firms still seek foreign expertise and technological inputs.
• Washington and its allies will develop technology partnerships and alternative supply sources, but probably with limited near-term success.