The Chinese economy is shifting towards sales of alternative energy systems and electric vehicles

For many years, China has been the world’s largest supporter of alternative energy systems and electric vehicles, making it not only the largest market for these technologies, but also the largest exporter, which helped the country offset economic difficulties in other sectors, and consolidate its position as a major player in the global transformation process.

China’s economy is undergoing a radical transformation, with its once-dominant real estate sector battered by turmoil and no longer the country’s growth engine, Reuters’ Gavin Maguire wrote in a recent column. Instead, Chinese growth increasingly depends on factors such as sales of wind and solar equipment, electric cars, and, of course, the processing of critical minerals in which China holds a global dominant position.

While the Chinese economy has generally moved from primary industries to secondary industries and eventually to tertiary industries to support growth, just like other advanced economies, the alternative energy sectors have remained major contributors. Interestingly, some industries typically associated with real estate have gone the same way. When these industries are affected, those industries are affected as well.

According to Maguire, cement production is an example of this. While China’s real estate sector has contracted and remains stagnant, cement production is booming, due to increasing exports.

Earlier in May 2026, news spread that HSBC Bank was working to establish a special fund to provide loans to Chinese alternative energy exporters, at a time when there is a rise in demand for these products.

“China is home to some of the most dynamic companies in the field of reducing carbon emissions in the world,” said Natalie Blythe, the bank’s global director of sustainable finance and transformation, adding that these companies “are setting new standards in advanced manufacturing.”

Blythe continued: “As they expand internationally, these companies need financial partners with the global reach and experience to support them, and this financial facility is designed to provide exactly that.”

The timing couldn’t be better, as China’s exports of wind and solar energy equipment and electric cars are at record levels, amid the energy crisis in the Middle East. The value of these exports increased in March 2026 to $25.77 billion, according to data from the “Amber” platform specialized in climate affairs, which represents an increase of 30% over February 2026, and an increase of 50% over March 2025. In other words, China is strengthening its dominance in the field of alternative energy and expanding its scope.

“The scale of China’s electric vehicle and battery industries alone has reshaped global flows of related commodities, including lithium, graphite, nickel, cobalt, and rare earth elements, of which China is the world’s largest consumer,” Maguire said.

Analysts who follow Chinese affairs advised paying special attention to these industries, and the impact of the growing Chinese presence abroad on similar industries in countries that are shifting from producing to importing, because China’s global control over supply chains has made continuing production economically unfeasible for most other producers, as purchasing from China has become easier.

Naturally, this raised concerns about heavy dependence on a country with which it has geopolitical differences with other parts of the world, especially in Europe. Indeed, the Financial Times reported earlier in May 2026 that the European Union was preparing plans to oblige European companies to purchase vital components from suppliers other than China, to reduce the Union’s dependence on this country.

The chances of success of such a mission are questionable at best. This is not the European Union’s first attempt to use force in order to reduce its dependence on China, as China has not responded positively to previous attempts.

But when it comes to energy, Europe cannot simply go it alone, or switch to another supplier of solar panels and inverters; there are no other suppliers selling at the same prices. As analysts have pointed out, there can be no energy transition without China. About “Oil Price”

• HSBC Bank is working to establish a special fund to provide loans to Chinese alternative energy exporters.