We are moving into the Intelligent Age – an era where advances in fields from renewable energy, robotics to artificial intelligence (AI) unleash new sources of prosperity and drive a global green transition.

The shift is already well underway in China, where electric vehicles (EVs) – identifiable by their bright green license plates – sweep softly through the streets and gleaming rows of solar panels run for kilometres.

A confluence of factors drives this shift.

Starting with an ambitious commitment to hit peak carbon emissions before 2030 and reach carbon neutrality before 2060, China is growing new industries and building a new generation of energy infrastructure at a scale and speed unmatched globally.

This commitment – backed with investment – provides the incentives for a new generation of companies to fund research, driving a nearly 70% increase in expenditure between 2018 and 2023.

It enables enterprises to tap deep pools of expertise and develop green energy solutions in a country that hosts three of the five biggest science and technology clusters globally.

The results of these innovations are being felt worldwide; from Sichuan Province to Zimbabwe, China is creating a roadmap for sustainable development on a global scale.

China spent more than twice as much on its green transition in 2023 than any other country, and this investment has made it a global powerhouse in clean energy production.

Battery technology is a case in point. China is home to the world’s largest suppliers of components for lithium-ion batteries, upon which EVs depend for power. Chinese EV battery makers had a global market share of 60% and grew their exports by 30% year-on-year in 2023.

China is similarly dominant in its embrace of low-emission hydrogen, a residue-free energy source that releases steam instead of smoke. The largest green hydrogen project on the planet is located in China, as are around 40% of the world’s hydrogen refuelling stations. These stations support a small but quickly growing population of hydrogen fuel cell vehicles.

Solar and wind energy are also areas of strength. In 2023, the country commissioned as much solar photovoltaic capacity as the entire world did the year before and was responsible for 75% of global wind farm installations.

The rapid growth of green technology production in China has helped cut green energy costs worldwide, making sustainable energy solutions more accessible than ever for billions of people.

China’s low-cost solar panels are helping to light rural Zimbabwean communities, while Chinese EVs, which are affordable, clean transportation choices on city streets from Mexico to Thailand, are growing in popularity.

The nation’s sustainable development drive also makes tackling emission-cutting targets easier for other countries. In New Zealand, which aims to reach net-zero emissions by 2050, China supplied 89% of solar PV equipment by value in 2023.

To reach its own ambitious carbon targets, China’s enterprises are taking a leading role in developing, producing and implementing green technologies.

More than 800 large Chinese companies have undertaken to reach carbon neutrality by 2050. They are doing this by deploying energy-saving automated processes and AI from farm fields to factory floors.

A leading Chinese cloud computing company is using AI to optimize energy consumption in data centres, commercial buildings, and even Olympic stadiums. Automation has also helped a major dairy company increase operational efficiency by 19%.

Some enterprises are reaping the benefits of sustainable AI quite literally. A Chinese agri-tech venture has deployed drones and algorithms to collect and analyze soil and weather data with the goal of using less water and fertilizer while improving crop yields.

Overseas companies and consumers are also reaping the benefits of these efforts as the latest green technologies seep into China’s manufacturing sector.

Consider the world’s first zero-carbon factory in Sichuan province. There, AI monitors data in real-time and algorithms optimize energy consumption, enabling the operating company to reportedly reduce carbon emissions by 400,000 tons annually.

These new high-quality productive forces have the potential to extend technological applications, transform global manufacturing and build a more sustainable world.

There’s no question about it – the future is here, in China.

The green transition has immense potential to connect investors with new sources of growth. By 2030, some $40 trillion is expected to be allocated to ESG strategies worldwide.

It’s an exciting and vital time for exchanges because, as core market infrastructure, exchanges play a key role in connecting capital with opportunities, and the opportunities in the global green transition are vast.

At HKEX, we have seen a range of sustainability-forward companies come to market in recent years, from Chinese lithium-ion battery makers to advanced materials manufacturers.

HKEX is taking proactive steps to create the conditions for the green transition. For example, it is launching new listing chapter rules to open access to capital for specialist technology companies and building out the sustainable finance product ecosystem, including ESG exchange-traded funds, green, social, and sustainability bonds, and carbon credits.

We have also made great strides at our subsidiary, the London Metal Exchange (LME), a central marketplace for minerals and metals vital to the clean energy technologies being developed and produced in China.

The LME has introduced requirements to help ensure that the metal traded meets global responsible sourcing standards, and it launched a digital credentials register to record and share information about the metals’ sustainability characteristics, with a sustainability-related pricing differentials solution under development.

Now, with the World Economic Forum Annual Meeting in Davos upon us, we look forward to finding out how, together, we can continue to connect capital with opportunities, create more connectivity, not less, and unleash new sources of prosperity for the world.

https://www.weforum.org/stories/2025/01/why-china-matters-to-the-worlds-green-transition/