This chart shows the level of Chinese solar panel manufacturing in 10,000 kW. I have interpolated some gaps, particularly with respect to the usual Chinese practice of not publishing data for January and February separately, or at all. I have seasonally and extreme-adjusted the time series. These would be solar panels for both local use and exports.
It is plotted on a log scale because of its rapid growth. It is up 17-fold since 2014, an annual average growth rate of 33% per annum since 2014. Recently, the growth in output has been accelerating again, which is consistent with the very rapid growth in domestic installations.
Despite all the talk, developed countries didn't really believe in solar, and didn't support it enough. (Ironically, Australia once led the world in solar, but the government decided to withdraw developmental subsidies, and the Chinese graduate student who'd helped develop solar in this country, returned to China to start theirs.)
China decided to support the new technologies needed to fight climate change for three reasons.
First, its coal-led growth had produced terrible, lethal pollution. You could even see it from space.
Second, they knew climate change was real. They had no rancid Right, to try and stop the revolution. And no oil and coal companies to seduce politicians with bribes and poison the public debate with lies.
Third, it saw that these new technologies (wind, solar, lithium-ion batteries, and EVs) were going to be vastly important, and even though they were starting off small, they would grow fast, and would enable China to get rich. They saw the future and they grabbed it.
The West kept on believing that growth would be linear, not exponential. (Many forecasts and projections continue to make this mistake.) China supported these industries in early years with subsidies and directives. This forced them down a rapid learning curve. Cut-throat domestic competition forces the companies in these sectors to past the cost declines on to their customers, which in turn expands the markets. That's called industrial policy. It uses the learning curve to carve out new markets.
End result: China dominates, and these industries outside China are +-5 years behind, except perhaps for wind. Chinese EVs, batteries, and solar panels are cheaper than the rest of the world, and only protectionism keeps other domestic markets safe.
Have developed countries learned their lesson? You have to wonder. The US certainly hasn't. I suspect that this is what Trump is dimly grasping at with his Trump tariffs. But the Chinese have also made a point of training and educating their work force, and companies spend more than their profits on research to improve the technologies. BYD is an excellent example. And they also don't chop and change policies every five minutes.
Will this kind of industrial policy work in other sectors in China? Chinese technology firm, DeepSeek, seems to following the same government-driven development path, but for AI. There was a time when I would have said, but would you trust a Chinese AI? But would you trust an AI from the USA these days? And yet, if you're Pakistan or Thailand or Indonesia, do you even care?
If you're a small or a poor economy--in other words, anyone outside the Big 8--it makes sense to buy these products from China. They're cheap, and will raise your GDP and living standards, while cutting your emissions and your air pollution. If you're one of the Big 8 economies, you need to spend heavily on promoting production of these technologies to catch up. Or you might as well give up.
Meanwhile, the US (the world's largest economy!), has stupidly decided to deal death blows to its own EV, battery and solar industries.
There are lots of lessons here, but I doubt the West, still in thrall to neo-liberalism, still wedded to the belief that the market always knows best, will learn them.
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