Sustainable investing
5 min read 5 Jun 25
At the 2023 COP28 summit, governments committed to tripling global renewable power capacity by 20301 – a target that will depend heavily on these two nations. While their starting points and approaches may differ, the scale of ambition and investment is clear. Together, China and India are poised to deliver nearly half of the world’s new renewable capacity this decade2, underscoring their central role in the shift toward a low-carbon future.
China has become a powerful force in the global clean energy transition. As both the world’s largest emitter and its biggest investor in renewables, the country is driving momentum at a scale few can match. In 2023, China added more solar capacity than the rest of the world combined3. Wind, hydro, and grid investments also continued at pace, supported by clear policy direction and industrial coordination.
Years of focused investment have enabled China to build a vertically integrated clean energy supply chain dominating in solar panels, batteries, and wind components. Its manufacturing scale has helped drive down global prices, making clean technologies more accessible worldwide. In that sense, China has become not just a user, but also an exporter of its energy transition.
Concerns around overcapacity and pricing pressures are not unfounded, but they do not diminish the country’s importance in the broader global shift. If anything, they underscore the impact China has had in lowering the cost curve for green technologies. For investors, China remains a complex but critical part of the energy transition story – one where global scale meets domestic imperatives.
India’s energy transition story is shifting from ambition to action. With bold targets and foundational investments across solar, wind, and emerging technologies, the country is laying the groundwork for a greener future. The government has pledged to reach net zero by 2070 and aims to build 500 GW of non-fossil fuel power capacity by 20304. By the end of 2023, India had surpassed 180 GW of renewable capacity5, with solar and wind contributing the lion’s share.
Momentum is building. In 2023, India added nearly 15 GW of new solar capacity – its highest ever annual increase6. Domestic manufacturing incentives, streamlined auctions, and large-scale infrastructure projects are beginning to converge. The private sector, backed by global capital and local demand, is helping to scale up deployment across the country.
At the same time, India is navigating the complexities of building a future-oriented energy system while still meeting the immediate needs of a fast-growing population. Grid infrastructure, energy storage, and financing mechanisms will need to keep pace. But the intent is clear – and the trajectory is increasingly upward.
While China and India are pursuing different models shaped by their unique contexts, both are moving with purpose toward the same goal: building economies powered by clean, sustainable energy.
China’s transition has been driven from the top down through state-led planning, massive capital deployment, and policy support across supply chains. India’s path is more decentralised and market-led, with public-private partnerships and competitive bidding at its core. One approach is defined by scale and speed, the other by structural buildout and resilience.
Yet the underlying momentum is aligned. Both countries are investing heavily in renewables, upgrading transmission networks, encouraging domestic manufacturing, and committing to long-term climate targets. Both are shaping not just national energy systems, but also regional and global clean tech ecosystems.
For investors, this divergence in models offers diversification. But more importantly, the convergence in direction presents a powerful signal: that Asia’s largest economies are not only participating in the global transition – they are helping define it.
The road forward in Asia’s energy transition may be uneven, but the direction is clear. As China and India lead the charge, long-term investors have an opportunity to identify the real enablers of progress – those creating value amid transformation.
In China, that may mean looking beyond raw scale to focus on companies driving innovation, improving grid efficiency, and integrating renewables more effectively. In India, it may involve tracking the buildout of solar and wind, the growth of energy storage, or the financing and infrastructure supporting local clean energy champions.
Decarbonisation will not happen overnight. Policy signals may fluctuate. Supply and demand dynamics will evolve. But the commitment from Asia’s two largest economies – and their growing momentum – offers a source of stability in a changing world.
In this pivotal moment for energy and economic systems alike, China and India offer both the scale and the resolve to lead.
* This article was first published, in Chinese, in the Hong Kong Economic Journal.
The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. The views expressed in this document should not be taken as a recommendation, advice or forecast. Past performance is not a guide to future performance.