Xiao Xinjian: China's new energy industry poised for a compelling future

Despite the recent concerns on the capacity of China's new energy industry and its future growth potential, Dr. Xiao Xinjian, Director of the Second Research Department at the Xi Jinping Thought on the Economy Studies Center, remains optimistic. "China's new energy industry holds immense potential for future development," he asserts.

Domestically, China's ambitious carbon goals call for a significant increase in renewable energy capacity. "In order to peak carbon emissions and achieve carbon neutrality," explains Dr. Xiao, "we need to increase our solar power capacity to over 3 billion kilowatts and our wind power capacity to more than 2 billion kilowatts, more than quadrupling our current capacities."

The new energy vehicle (NEV) market also boasts enormous room for growth. "By replacing just half of traditional fuel vehicles, the potential market for NEVs could reach 150-160 million units," says Dr. Xiao. "Moreover, with ongoing improvements in living standards and economic growth, the long-term growth potential is even greater."

In the context of economic globalization, a global outlook on market demand and growth prospects is crucial in evaluating potential overcapacity. Xiao mentioned the projections from the International Energy Agency (IEA), indicating that by 2030, global demand for NEVs will skyrocket to 45 million units, a 4.5-fold increase from 2022. Moreover, annual incremental needs for photovoltaic capacity are projected to reach 820 million kilowatts by 2030, quadrupling the 2022 level. All of this represents a significant potential demand worldwide.

"China's green, low-carbon development will continue to contribute significantly to the world." concludes Dr. Xiao.