How China's growth model fosters green industrial dominance

Mathias Larsen

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: What explains China's global dominance of green industries? Here, I show that China's politics determine its growth model, and the growth model fosters clean tech development. First, China's authoritarian politics entail a growth-security trade-off, a preference for investment and exports, the elimination of powerful industrial coalitions, and a high degree of state capacity. Second, clean industries fit all of these four dimensions: 1) They reduce reliance on energy imports and allow China to keep green supply chains within its control. 2) They provide new drivers of investment and exports as real estate and low-skilled manufacturing lose their ability to drive growth. 3) No incumbent industrial coalition can resist their expansion, as the same stateowned companies often own both clean and dirty assets. 4) Finally, without electoral or legal constraints, the party-state supports them through supply-side, demand-side, and macro-structural policies. Consequently, China has achieved green growth by decoupling emissions from growth. However, emission-intensive industries also fit the growth model, meaning the shift to clean technologies is, so far, proportional rather than nominal. Further progress requires either political and economic reform, which is unlikely, or technological progress that lets clean technologies outcompete fossil alternatives.

JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2026-10
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