July2024OIESPaper:CE14CleanenergyinnovationinChina:factandfiction,andimplicationsforthefutureAndersHove,SeniorResearchFellow,OIESiThecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.Thecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsmembers.Copyright©2024OxfordInstituteforEnergyStudies(RegisteredCharity,No.286084)Thispublicationmaybereproducedinpartforeducationalornon-profitpurposeswithoutspecialpermissionfromthecopyrightholder,providedacknowledgementofthesourceismade.NouseofthispublicationmaybemadeforresaleorforanyothercommercialpurposewhatsoeverwithoutpriorpermissioninwritingfromtheOxfordInstituteforEnergyStudies.ISBN978-1-78467-249-2iiThecontentsofthispaperaretheauthor’ssoleresponsibility.TheydonotnecessarilyrepresenttheviewsoftheOxfordInstituteforEnergyStudiesoranyofitsMembers.ContentsContents................................................................................................................................................iiFiguresandTables...............................................................................................................................iiSummary...............................................................................................................................................11.Introduction:FourmainfactorsdrivingChina’scleanenergyinnovation.............................32.China’scleanenergyindustrieshavebenefitedfromstrongandsustainedpolicysupport42.1Solarandwindsupportedbyfeed-intariffs,targets,andmandates.......................................42.2Stationarybatteriespromotedrecentlyforrenewableintegration...........................................62.3Electricvehiclepolicybeganearly,butacceleratedonlywhenindustryachievedsuccess...62.4R&Dfundingandsupportingpoliciessteadilyrampedup.......................................................72.5Cleanenergypolicycontinuityaidedindustrialtransition,withoccasionalabruptshifts........83.China’sindustryclusters,theunsungheroesthathelpedachievescaleandcontributedtoinnovation..............................................................................................................................................93.1Manufacturing-intensiveclean-energytechnologiesfavourclosesupplychainlinks...........103.2China’spolicieshavesupportedsupplychainintegration.....................................................123.3Manypatternsofsupplychainclusteringandinteraction.....................................................133.4Clustersandcompetitioncontributetothepaceofinnovation..............................................143.5Proximitytoalargedemandbasefurthersupportsinnovation.............................................154.China’sinnovationbenefitedfromgloballinksandtechnologytransfer.............................164.1TechnologytransferswereafirststepinwindandsolarinnovationinChina......................174.2BatteriesandEVsbenefittedfromlicensing,jointventuresandlocalisationrules...............184.3RisingChinesedominanceevidentinbatteriesandEVs......................................................195.Talent,humancapitalandentrepreneurswereinstrumentaltocleanenergy’srise...........195.1Theextraordinar...