China's Climate Gambit: Bet On Coal While Winning The Green Race

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At the same time, Chinese oil and gas giants (CNPC, Sinopec) have set up solar, wind and battery divisions, redirecting fossil profits into green ventures. Yet China's capital continues to flow through fossil channels. Even after Xi Jinping's 2021 pledge to halt new overseas coal financing, Chinese development banks still funded roughly four times as much coal/oil abroad as renewables during 2013-21.

In short, China's state capital remains tied to both legacy and clean energy.

Electric vehicles: a Southeast Asian rush

China's EV juggernaut is rolling across Asia. Bolstered by huge domestic subsidies and a world-leading battery industry, Chinese automakers are flooding neighboring markets. In Thailand, Asia's long-time auto hub, Chinese EV brands now command more than 70% of EV sales.

Battery-electric vehicle sales in Thailand surged from under 10,000 units in 2022 to about 76,000 in 2023 , with BYD alone taking roughly 40% . Chinese firms have invested heavily in Thai assembly: BYD and Great Wall Motor pledged about $1.4 billion for EV plants there, and Chery's new Thai factory will produce 50,000 cars per year by 2025.

Some smaller Chinese brands are finding the Thai market cut-throat. One analyst notes Neta's recent troubles show that second-tier Chinese EV makers are“fragile” under intense price competition. Many have cut prices by 20% or more to stimulate demand, squeezing profit margins. Some smaller Chinese brands are finding the Thai market cut-throat.

One analyst notes that Neta's recent troubles show that second-tier Chinese EV makers are“fragile” under intense price competition. Many have cut prices by 20% or more to stimulate demand, squeezing profit margins.

Thai dealers warn that a glut of cheap Chinese EV imports could undermine domestic automakers but that said, Chinese EV ventures often involve local joint ventures bringing technology and some jobs to the region. Some analysts see these Chinese EV ventures in Thailand as a potential 'back door' to Western markets, allowing firms to export cars assembled locally, even if trade restrictions target Chinese-made products.

Financing and infrastructure in South Asia

China's fossil-clean mix is visible in South Asia, too, and Bangladesh is a prime example. Nearly 90% of Dhaka's planned power projects are financed by China. Bangladesh had approved 13 Chinese-backed coal plants, but environmental and popular pressure forced Dhaka to cancel 10 of them in 2021.

The government has since pivoted to solar, wind and LNG. Officials say Bangladesh now needs roughly $80-100 billion – and thus is in talks with China, Japan, the ADB and others – to reach ~40% renewables by 2050.

In effect, Bangladesh's energy future hinges on China: if Beijing redirects funds from coal to green energy, Dhaka can meet its goals. If not, it could be saddled with stranded coal debts.

Pakistan's story is the converse. Under the China-Pakistan Economic Corridor (CPEC), Chinese companies built large coal-fired plants (over 2 GW) to provide baseload power. Yet Pakistanis themselves have driven a solar boom: Renewables First reports that about 39 GW of solar modules have been imported since 2020, nearly all from China – exceeding three-quarters of Pakistan's grid capacity.

In 2024 alone, 16 GW of panels arrived, making China Pakistan's largest solar supplier. The result is strategic tension: China is financing coal on the one hand and flooding the market with solar on the other. As analyst Basit Ghauri notes ,“China's solar panels are outcompeting China's power plants” and Pakistan has become“ground zero for this energy disruption.”

Regional energy dependence: risks and rewards

Across Asia, the coal-to-clean linkage cuts both ways. On the one hand, Chinese-built solar farms, transmission lines and EV factories have driven down costs and accelerated renewable deployment.