The Global Green-Tech Race and the EU-China Strategic Choice
China has emerged as a global leader in green technology, with companies like CATL and BYD making significant strides in electric vehicle (EV) battery development. CATL recently introduced an EV battery that can provide a driving range of 520 kilometers (323 miles) after just five minutes of charging. This innovation follows BYD's launch of its ultra-fast charging system. In the solar sector, Chinese firms are producing over 1,200 gigawatts of solar panels annually, showcasing their dominance in renewable energy manufacturing.
These achievements reflect the broader global green-tech race, where China leads by a wide margin. While some critics argue that this represents an oversupply problem, others see it as a sign that the rest of the world is not adopting these technologies quickly enough. As China continues to advance at high speed, other regions appear to be lagging behind.
For Europe, this presents a critical strategic decision. It can either pursue defensive industrial policies—such as securing supply chains, raising tariffs, and attempting to catch up—or adopt a more collaborative approach. A shared competitiveness agenda would allow Europe to leverage its strengths in rulemaking, coalition-building, and norm-setting. By shaping the deployment environment, defining standards, and guiding green investment frameworks, Europe could position itself as a leader in clean technology.
Despite recent tensions between the European Union and China, collaboration on clean trade and investment remains a viable option. The climate transition is one of the most pressing political and economic challenges of the 21st century, and both the EU and China have become interdependent in this space. If Europe slows its decarbonization efforts, Chinese assets could face stranded value. Conversely, if China refuses to collaborate, it may face retaliation. The key question is whether both sides can constructively shape this interdependence.
To capitalize on the narrow window for establishing a climate partnership, both parties need to find a deal that aligns with their core economic interests. For the EU, this means reducing reliance on Chinese imports while moving up the value chain. For China, it involves maintaining access to a high-value export market amid shifting global trade dynamics. Pragmatism on both sides will be essential for success.
Several factors will determine whether the EU and China can cooperate effectively. First, they must agree on local-content requirements. The EU should aim to produce at least 40% of green technologies domestically by 2030, focusing on higher-value activities such as research and development rather than just low-paid assembly. This would create jobs and build resilience.
Second, joint ventures should be encouraged. These partnerships have played a crucial role in China’s technological advancement and are already emerging in the EU’s battery and automotive sectors. When structured properly, they can drive mutual gains and integrate cooperation into long-term industrial strategies.
Third, trade measures must be carefully balanced. While the EU has imposed tariffs as high as 45.3% on Chinese EVs, import barriers alone cannot close competitiveness gaps. They should complement more strategic policies such as local-content rules and industrial partnerships. Poorly implemented tariffs could further weaken Europe’s technological position instead of helping it catch up.
Fourth, structured mobility schemes are needed. Some EU member states have begun restricting visas for Chinese engineers, which is short-sighted. Allowing European firms to host Chinese talent and vice versa would ensure that R&D and design occur in Europe, not just final assembly.
Collaboration on decarbonisation efforts could yield significant economic and geopolitical benefits for both sides. For the EU, it would strengthen resilience, bolster the industrial sector, and reinforce its position as a clean-tech leader. For China, it would help offload surplus green goods, secure market access, and signal its commitment to green growth despite the U.S. retreating from climate action.
The EU and China are more aligned than many realize. Both are net fossil-fuel importers and major producers of zero-carbon technologies. Their shared interest in sustaining global demand for green products makes cooperation a logical step. Amid growing uncertainty, both have bet on the energy transition as a path to competitiveness and innovation.
This window of opportunity will not last forever. As scientific and political timelines converge, the coming months are critical for keeping the world on track to meet the Paris Agreement’s 1.5 degrees Celsius goal. The recent EU-China Summit laid the groundwork for closer cooperation on decarbonisation, but the next steps will be pivotal.
With many European countries, particularly France, pushing for a clearer industrial and investment plan before committing to a strong 2035 emissions-reduction target, EU leaders must develop a framework for transforming industry. An important part of this plan will involve how the bloc engages with China.
By embracing the idea that the new must be built before the old can be phased out, Europe is beginning to follow China’s strategy. However, it must also learn from China’s coherent and systematic execution, which emphasizes long-term planning across the entire clean-tech value chain.
China, too, must take a more ambitious approach by setting a 2035 emissions target aligned with its 2060 net-zero goal. A roughly 30% reduction from peak emissions would enhance its international credibility and create space for a strong EU target.
Both Europe and China have wagered their future on green growth. To make this a winning bet and capture the full benefits of decarbonisation, they must find common cause on clean trade and investment—one of the few areas where strategic self-interest and global public goods still converge.