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US-China Clean Energy Contest: Economic Security or Quest for Dominance

ChinaUS-China Clean Energy Contest: Economic Security or Quest for Dominance

The international economic stage has a new battleground: the clean-energy sector. As green technologies continue to dominate future industries, the US-China rivalry seems poised to pivot towards this front, highlighting again the persistent theme of “economic security.”

While some see economic security as a legitimate concern in a globalized world, others argue that it’s a veil for hegemonic interests. A worldview that suggests any dominant nation should inherently be concerned if another appears to gain more than it in a vital sector.

During an event in Las Vegas, US Treasury Secretary Janet Yellen delved into this very topic. She hinted at the intention to use the Inflation Reduction Act to foster a diverse clean-energy supply chain in the US. The purpose? To reduce potential vulnerabilities and disruptions. She highlighted concerns about the over-concentration of crucial resources, such as batteries, solar panels, and critical minerals in a limited number of countries.

While Secretary Yellen did not explicitly mention any country, the subtext pointed towards China. The International Energy Agency’s report shed light on this concern, revealing that China boasts a staggering 60% of global manufacturing capacity for significant technologies, especially in the solar photovoltaic and wind sectors.

This focus on China isn’t baseless. In recent years, China’s clean-energy industry has been on a meteoric rise. The country’s adoption of renewable energy resources like wind, solar, and hydrogen has been substantial. The progression in electric vehicle (EV) and energy-storage technologies has been nothing short of phenomenal. These strides can be credited to China’s robust investment strategies, its vast resource reservoir, and unparalleled mass production capabilities. And rightly so, as these feats are a testament to China’s dedicated endeavors in this sector.

However, such rapid progress often leads to uneasy neighbors. As Yellen’s speech insinuated, the US appears perturbed by China’s advancements, often veiling its concerns under the broad term of “economic security.” While clean-energy growth is undeniably tied to environmental benefits, it’s equally tethered to capital interests and fierce market competition. Clean energy isn’t just about environmental conservation; it represents one of the most significant economic transformation opportunities in our times.

The US isn’t just observing from the sidelines. As part of its strategy to lead the global green development, it’s been fervently promoting its new-energy industrial frameworks. However, China’s head start in clean energy has already secured its products considerable market shares, thanks to competitive pricing, superior quality, and innovative technologies.

Washington’s discomfort with China’s meteoric rise in the clean-energy arena isn’t hidden. It has been encouraging its allies to “de-risk” from Chinese clean-energy products, sometimes presenting them in a less-than-favorable light. This isn’t a new playbook. The US has previously leveraged “security risks” as a rationale to counteract Chinese industries. This “economic security” stance translates to the US’s desire to enjoy maximum benefits in pivotal industries and to exert control over the market, a clear embodiment of capital hegemony. A parallel can be drawn to the US’s approach towards Huawei’s 5G technology and China’s photovoltaic products.

But such forceful methods to suppress Chinese products often have repercussions. For instance, the US’s clean-energy sector, particularly wind power, has been experiencing setbacks. Soaring costs of turbines, cables, and other wind equipment have put several US offshore wind power projects in jeopardy. In a recent instance, Spain’s Iberdrola SA decided against a power-selling contract for a planned wind farm in Massachusetts. Danish firm Orsted A/S also encountered a setback in its bid to supply offshore wind power to Rhode Island. Analysts attribute “de-risking” as a pivotal factor leading to these skyrocketing costs in the US and European wind power sectors.

Considering China’s trajectory in enhancing its clean-energy technologies, it’s almost inevitable that the competition will intensify. As this unfolds, it’s expected that the US will heighten its rhetoric about security risks. The onus is on China to remain unwavering in its technological evolution and to clinch global market recognition through its production magnitude and product quality.

In summary, the US-China rivalry in the clean-energy domain is emblematic of larger geopolitical dynamics. While it is dressed up as a concern for economic security, the underlying currents are indicative of a grander play for capital dominance. As the world veers towards a more sustainable future, how these two superpowers navigate this green race will shape global economic and environmental landscapes.

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