China’s leading the green revolution – 2 fund ideas to benefit

China is at the forefront of the green revolution, shaping the future of the global energy with a scale and speed unmatched by any other nation.

The country dominates clean energy manufacturing, producing eight out of every 10 solar panels, two-thirds of wind turbines, and over 75% of the world’s lithium batteries. It’s also the largest player in electric vehicles, controlling more than 60% of the global market.

China is building more wind and solar power capacity than the rest of the world combined – nearly twice as much.

By driving down costs through economies of scale, it’s made green energy more affordable globally, while securing its position as a leader in the transition to net zero.

Why China matters

Unlike the US, which faces uncertainty over its climate leadership, China is stepping into the spotlight.

It’s provided more than $30bn for climate projects in developing countries, largely through its Belt and Road Initiative. This isn’t just altruism – China is building economic ties, creating markets for its green technologies, and strengthening its global influence.

China’s dominance in renewable energy manufacturing gives it significant geopolitical leverage. Much like OPEC’s control over oil markets, China could influence global supply and pricing for green technologies like solar panels and EV batteries. This puts it in a powerful position as countries race to transition their energy systems.

But there’s a flip side.

Heavy reliance on China comes with risks. Labour violations and alleged human rights abuses in supply chains raise serious environmental, social and governance (ESG) concerns, while trade tensions could disrupt the flow of essential green technology.

Is there opportunity on offer in China?

As the world’s largest emitter, China’s own net-zero journey will be critical to meeting global climate goals. At the same time, its scale and innovation in clean energy are helping drive the transition worldwide.

With 16% of Chinese exports heading to the US, incoming president Donald Trump’s proposed 35% tariff on Chinese goods could disrupt this trade flow.

While tariffs might initially slow China’s exports of renewable technology to the US, they could also push China to diversify its markets and deepen its influence elsewhere.

By accelerating investments in other regions, particularly Belt and Road Initiative countries, China could expand its global green energy footprint, making it even more integral to the net-zero transition.

For investors, China’s pivotal role in the green revolution presents both opportunities and challenges.

Balancing the benefits of its industrial might with the need for ethical and diversified supply chains will be key as we move toward a greener future.

For investors looking for opportunities in China’s green revolution, here are two fund ideas.

This article isn’t personal advice. Remember, investments can rise and fall in value, so you could get back less than you invest. If you’re not sure if an investment’s right for you, ask for financial advice.

2 fund ideas that could benefit

Investing in these funds isn’t right for everyone. Investors should only invest if the fund’s objectives are aligned with their own, and there’s a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a diversified portfolio.

For more details on each fund and its risks, use the links to their factsheets and key investor information.