China’s clean-energy stocks closing gap with global peers as renewables surge
News Summary
Shares in China's clean-energy companies are showing signs of catching up with a global rally in renewable equities, driven by supportive policies. Over the past six months, the Hang Seng Shanghai-Shenzhen-Hong Kong Clean Energy Index rose about 30%, with most gains occurring recently due to a nationwide “anti-involution” campaign and new support policies for energy storage. Analysts note that Beijing's “anti-involution” effort, initiated in July 2024 and intensified mid-2025, aims to curb irrational price competition and oversupply in the solar sector. This policy has improved confidence in the sector's longer-term profitability, narrowing the gap with global peers. Moody's suggests that effective implementation could “restore corporate margins, improve fiscal sustainability and capital allocation and enhance the quality of growth”. Citi's equity strategist Pierre Lau projects energy-storage system prices in China could increase in the second half of the year due to higher battery-cell costs, issuing a buy rating on major makers including Sungrow and Deye.
Background
The global clean energy sector has seen a robust rally, with the S&P Global Clean Energy Transition Index jumping nearly 50% over the past six months, outperforming the S&P 500 and gold, both of which gained 35% in the same period. However, Chinese clean energy stocks had previously lagged behind. China's solar sector has historically faced challenges of overcapacity and intense price competition, impacting corporate profitability. To address this, the Chinese government launched an “anti-involution” campaign in July 2024, intensifying it by mid-2025. This initiative aims to optimize industrial structure and enhance sector health through policy guidance and production controls. Against this backdrop, with the implementation of supportive policies and ongoing industry consolidation, China's clean energy sector, particularly solar and energy storage, has begun to show momentum in catching up with its global counterparts.
In-Depth AI Insights
What are the deeper strategic implications of China's “anti-involution” campaign beyond mere sector profitability? - This initiative is not merely about short-term profit enhancement but is integral to Beijing's long-term industrial upgrading strategy. By curbing low-end capacity and irrational competition, the government aims to push the clean energy industry towards higher value-added segments and technological barriers. - The goal is to solidify China's dominant position in the global clean energy supply chain, particularly in critical technologies and high-end manufacturing, making it more resilient in global competition and less reliant on price-driven external markets. - Furthermore, this move reflects an emphasis on “high-quality development,” shifting from a pursuit of quantity and scale to a focus on technological innovation and profitability for sustainable economic growth. How might the Trump administration's trade policies interact with China's domestic clean energy push and its global competitiveness? - While China's policies aim to strengthen its domestic industry, the Trump administration's