China's green reform reshapes its energy future, eases global pressure

Editor's note: Zhang Xuan is the director of the Energy Strategy and Policy Research Institute at the Energy Research Development Institute under China Southern Power Grid (CSG). Guo Bowei is an associate professor and the executive director of the Center for Research on Global Energy Strategy at Renmin University of China. The article reflects the authors' opinions and not necessarily the views of CGTN.

Two years after the adoption of the Resolution of the Central Committee of the Communist Party of China on Further Deepening Reform Comprehensively to Advance Chinese Modernization, China's ecological civilization reform has continued to advance, with green development becoming an increasingly important driver of its economic and energy strategies.

Through institutional innovation, industrial upgrading and energy transition, China's green transformation is reshaping its energy future while helping ease global energy pressures and offering valuable experience for advancing global energy security and green governance.

The logic of China's reform is clear: Carbon reduction should not rely only on administrative requirements. It must be embedded in markets, finance, industry and everyday economic decisions. This is why China has continued to improve its national carbon market. Starting from the power sector, the carbon market has been expanded to include major industrial sectors such as steel, cement and aluminum smelting. These sectors are closely linked to infrastructure, manufacturing and urban development. Bringing them into the carbon market means that carbon costs, emissions data and low-carbon technologies will increasingly influence corporate investment and production decisions.

At the same time, China has strengthened the role of green finance. Clearer standards for green loans, green bonds and other financial products are helping capital flow toward renewable energy, energy efficiency, clean transport, green manufacturing and other low-carbon projects. For enterprises, this changes the nature of the green transition. Low-carbon upgrading is no longer only a compliance requirement; it can also become a source of financing advantage and long-term competitiveness.

These reforms are part of a broader effort to reshape China's development model. China has invested heavily in renewable power, electric vehicles, energy storage, smart grids and low-carbon manufacturing. The growth of these sectors is not accidental. It reflects the combined impact of policy guidance, large-scale markets, infrastructure construction, technological innovation and industrial competition. In this sense, ecological civilization reform is not separate from modernization. It is becoming one of the foundations of Chinese modernization.

The automobile sector offers one of the clearest examples. China is now the world's largest electric vehicle market. The rapid rise of electric mobility is changing the energy demand structure of the transport sector. In the past, economic growth, urbanization and rising household incomes usually meant higher consumption of gasoline and diesel. Today, a growing share of mobility demand is being met by electricity. As China's power system becomes cleaner, this shift also creates a pathway for deeper decarbonization of transport.

The significance of this transformation becomes even clearer when viewed against the background of global energy turbulence. In recent years, geopolitical conflicts, supply-chain disruptions, uncertainty over shipping routes and repeated oil price volatility have reminded the world that energy security remains central to economic stability. For many developing countries, high oil prices are not merely a market fluctuation. They mean inflation, pressure on foreign exchange reserves, higher transport costs and weaker growth prospects.

China is not immune to these shocks. It remains a major energy consumer and a major oil importer. But green reform has made China's energy system more resilient. Electrification, renewable energy expansion and improvements in energy efficiency have reduced the oil intensity of China's growth. When international oil prices fluctuate, China is less locked into the old pattern in which every additional unit of economic growth required more oil consumption.

This matters not only for China, but also for the world. If China, with its huge market and industrial capacity, had continued along a traditional fossil-fuel-intensive path, global oil demand would face even greater pressure. Oil prices could be higher, and the burden on energy-importing countries could be heavier. Instead, China's green industrial transformation has shifted part of its incremental energy demand away from oil and toward electricity and clean energy. This does not eliminate global energy risks, but it does provide an important buffer.

In this sense, China's internal reform has external significance. By reducing the fossil-fuel intensity of its growth, China is strengthening its own energy security while also contributing to global energy stability. The world often discusses China's green transition in terms of climate change. That is important. But its contribution to global energy security should also be recognized. A more flexible and cleaner Chinese energy system helps ease pressure on global fossil fuel markets.

For developing countries, China's experience does not mean copying every policy tool. Countries differ in resources, industrial structures, fiscal capacity and development stages. What is more useful is the underlying logic.

First, green development needs institutions, not only slogans. Carbon markets, green finance, emissions disclosure and energy-efficiency standards can change the incentives facing firms and investors. They help turn carbon reduction from an external constraint into an internal business decision.

Second, decarbonization should be linked with energy security. For many developing countries, reducing dependence on imported fossil fuels is not only a climate goal. It is also a way to reduce exposure to oil price shocks, protect macroeconomic stability and strengthen development autonomy.

Third, green industries need scale. China's experience shows that clean technologies become affordable when they are supported by infrastructure, large markets, supply chains and competition. The goal is not permanent dependence on subsidies, but the creation of conditions under which green technologies can compete, expand and benefit ordinary consumers.

Two years after the reform resolution was adopted, China's ecological civilization reform shows that green development is not a constraint on modernization. It is a driver of modernization. By using reform to guide markets, industries and finance toward a low-carbon future, China is reshaping its own energy future while easing pressure on the world. This reform path, which balances both domestic and external imperatives, also offers a replicable example of institutional innovation for global energy governance.