During China’s annual national legislature this month, Premier Li Qiang announced plans to construct more solar and wind farms as well as hydropower projects.

China is currently the top global producer of renewable energy and has significant control over the manufacturing and supply chain of renewable energy worldwide. In the previous year, China produced a larger quantity of solar panels than the United States has ever produced in its entirety.

China’s significant control over the production of electric vehicle batteries and solar panels has caused concern among Western governments, including the European Union and the United States. These governments attribute Beijing’s success to extensive government subsidies. In response, the U.S. has implemented its own subsidies and incentives to increase production within the country.

Reworded: China is currently the largest consumer of fossil fuels and the top contributor of carbon dioxide emissions globally. However, experts suggest that this positions Beijing to collaborate with an unexpected group – oil-producing nations in the Persian Gulf – in promoting the growth of renewable energy.

According to the U.S. Energy Information Administration, in 2022, Gulf States such as Saudi Arabia, the United Arab Emirates, Iran, Kuwait, and Iraq collectively produced one third of the world’s crude oil. However, analysts suggest that these countries are also expanding their economies beyond the oil industry with support from China.

The Energy and Geopolitics Researcher at Israel’s Bar-Ilan University, Elai Rettig, tells VOA that the transition to green energy will have mutual benefits as it will allow for the sale of oil to be freed up for the main consumers in Asia, particularly China.

According to Rettig, in this area, oil is less expensive than water. He also states that the greater your investment in the Gulf, the more likely you are to receive oil even when facing sanctions. As the largest oil importer globally, China must ensure they have a reliable source of affordable oil in the event of a conflict with the U.S.

According to Li-Chen Sim, a nonresident fellow at the Middle East Institute in Washington, the Gulf states are more interested in China’s ability to complete large projects at a lower cost rather than their fondness for the country.

According to the speaker from VOA, China is able to offer affordable polysilicon for solar panels due to lower labor costs, resulting in cheaper products. The cost of assembling solar models in China is reported to be 50% less expensive compared to Europe.

Developed nations have increased import duties on goods from China and provided new incentives to stimulate domestic rivalry. The European Union recently authorized tariffs on Chinese-made electric cars and is contemplating imposing them on solar panels.

The European Union has taken steps to prohibit the use of forced labor in the production of goods. This includes polysilicon components used in solar panels, which are largely manufactured in China’s Xinjiang region and make up a significant portion of the world’s supply.

In 2022, the United States halted all imports from the region in an effort to combat forced labor affecting the ethnic Uyghur Muslim minority, a practice which China denies.

Despite opposition from Western countries, the decreasing costs of solar power are making it more challenging to rival Chinese producers.

Despite this, according to Sim, China faces competition in regards to renewable energy from the Gulf States.

“China has an important presence in the Gulf region, particularly in terms of financing, contracting, and equipment industries. However, their contribution in financing, although significant, is not as substantial as the role played by Japan. Japan’s involvement in financing green energy projects in the Gulf is immense.”

In July 2023, while on a tour of the Middle East to promote Japan’s green technology and strengthen economic ties with the region, Japanese Prime Minister Fumio Kishida signed 23 agreements with the United Arab Emirates to enhance collaboration and current partnerships.

In 2017, Japan became the initial nation to develop a nation-wide strategy focusing on hydrogen and aims to become the premiere “hydrogen society.”

However, it will face competition from China, which is currently the leading producer and consumer of hydrogen globally. However, a majority of China’s hydrogen production comes from fossil fuels with high carbon emissions, such as coal.