Domestic Incentives and the Internationalization of Chinese Manufacturing in Clean Tech

Chinese firms are leading players in the production of clean energy technologies and appear set to expand further. In this paper, Ilaria Mazzocco (CSIS) analyzes trends in Chinese clean tech manufacturing including internationalization, and the outlook for manufacturing facilities outside of China in the clean energy technology industry, including EVs, batteries, and wind turbines. Among the main findings: Chinese clean energy technology companies have been relatively quick to expand their foreign market share but production outside of China is still lagging. Europe is likely to be the preferred destination for Chinese battery, EV, and wind companies but current investments are limited to the battery industry. The production of different technologies is subject to different sets of incentives including cost and political considerations that will determine how quickly companies will internationalize production. Overall, the diversification of production would bolster the resilience of supply chains and economic development but is likely to proceed more quickly for batteries and more slowly for other technologies.

This working paper is part of an IGCC series on China’s science, technology, innovation and industrial policies. This work was made possible through support from the U.S. Department of State’s Bureau of Intelligence and Research.