Trump’s energy stance could solidify China’s clean tech role in APAC

The re-election of President Donald Trump could boost China’s role in renewable energy across Asia-Pacific (APAC), as Beijing continues to develop alternative markets for its technology.

Trump recently increased tariffs on Chinese imports into the US, including on renewable energy inputs. However, such tariffs have been present for some time (albeit at a lower level), and the US has also increased tariffs on many other countries. It is therefore not clear what impact the higher Chinese tariffs will have.

Perhaps more significant is Trump’s stated desire to promote US fossil fuels, and the suggestion he wants to roll back at least some of the country’s initiatives to support renewable energy. In the first days of his second term, he has already announced the withdrawal (again) of the US from the Paris Agreement, pledged support for the country’s oil and gas producers and confirmed plans to ease pollution standards¹.

At Lombard Odier, we believe that, across numerous industries, demand is shifting to cleaner, more efficient electricity-based technologies such as heat pumps and electric vehicles

Building relationships through exports

Trump’s stance could help solidify China’s dominance in the renewable energies sector, and help the country build relationships and expertise in APAC, at a time when the region is struggling to meet its Paris Agreement carbon transition obligations².

It also signals that the US will not make significant inroads in exporting clean technology to APAC and/or emerging markets globally under Trump’s presidency, while China has invested over USD 100 billion in clean tech projects overseas since 2023³.

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China is already the leading global supplier of clean energy technologies, holding at least 60% of the world’s manufacturing capacity for most relevant equipment (e.g. solar PV, wind systems and batteries)⁴. Furthermore, the country is projected to account for 60% of the expansion in global renewable energy capacity from now until 2030⁵.

Only 4% of China’s total exports of solar and wind power equipment and electric vehicles (EVs) go to the US (compared with 15% of China’s overall exports). Half of these clean energy technology exports now go to the Global South, with emerging and developing countries driving most of the recent growth in export volumes⁶.

This comes in the context of the recent COP29 meeting in Baku, which disappointed many observers and participants who were looking for a greater financial commitment from rich nations.

APAC needs to step up its game

Many in APAC are suggesting that the region needs to step up its investment in, and progress on, the carbon transition. For example, a recent report suggests that USD 88.7 trillion of investment is needed within APAC for the region to meet its Paris Agreement targets⁷. On a delivered project basis, APAC’s combined solar photovoltaic (PV) and offshore wind market is set to exceed USD 1.1 trillion in investment value from 2025 to 2050⁸.

It is clear there are opportunities for local expertise to develop, to take advantage of the region’s abundant natural resources and transition away from fossil fuels; but, in many APAC countries, this will take a long time to materialise. Furthermore, while some countries can rely on nuclear power, such as Japan, China and Korea, others have geographic constraints, such as those prone to earthquakes and typhoons.

With clean energy technology and expertise needed across the supply chain and throughout APAC, Trump’s current positioning suggests the US will not challenge China in taking advantage of the opportunity.

Establishing a clean technology ecosystem in APAC based on Chinese technology and industrial strength represents a promising strategy for building expertise across the region and accelerating the CLIC® transition

China is increasing clean tech exports to APAC

China’s exports of various clean technologies to APAC have been increasing for some time. For example, Asian countries saw the largest increase of all regions in solar module imports from China in 2023, led by Malaysia, Thailand and the Philippines, growing more than European nations for the first time since 2020⁹. Europe remained the largest overall destination for Chinese solar modules, but the region’s share of total Chinese solar exports dropped to 46.35% in 2023, from 55% in 2022¹⁰.

This trend of growing Chinese clean energy exports is set to continue, particularly as the US enters another period of uncertainty when it comes to their approach to climate change and renewable energy. According to the IEA, the value of China’s clean technology exports is set to exceed USD 340 billion in 2035, based on current policy¹¹.

At Lombard Odier, we believe that, across numerous industries, demand is shifting to cleaner, more efficient electricity-based technologies such as heat pumps and electric vehicles. This shift will play a key role in the transition away from today’s linear, wasteful economic model, towards one that is Circular, Lean, Inclusive and Clean (CLIC®).

Establishing a clean technology ecosystem in APAC based on Chinese technology and industrial strength represents a promising strategy for building expertise across the region and accelerating the CLIC® transition.

Learn more about the semiconductor chip’s sustainability paradox in APAC’s semiconductor industry.

Uncertainty remains, however, as observers watch the direction and impact of geopolitical developments – this will become clearer in the first months of the new Trump administration.

Either way, continued investment and innovation will be key, and China’s proximity to many of the most at-need areas may prove critical: to the growth of sustainable solutions in those countries, and to its own status as leader in many renewable energy segments.