Bruegel

The article discusses the Western concern over China's 'overcapacity' in clean energy production, highlighting Europe's contradictory stance on needing cheaper clean energy solutions while criticizing China's manufacturing of solar panels, wind turbines, and electric vehicles. Bruegel, a Brussels-based think tank, released a working paper examining how green infrastructure investments might address China's clean-energy overcapacity.

European tech leaders are more concerned about U.S. technological influence than China, focusing on building sovereign systems to avoid reliance on American AI trained on American values. The article highlights warnings from European experiences with Chinese dominance in electric vehicles as a cautionary example.

Global investments in clean technology manufacturing dropped 42% to $155 billion in 2025 after peaking in 2023, with significant declines in China and the US. China's decline reflects market oversupply from state support, while the US decline is more concerning as it occurs before planned investments materialize. Washington's rollback of clean energy incentives and trade restrictions on Chinese imports, along with policy unpredictability, have deterred Chinese companies from US manufacturing investments.

Europe spent €10 billion to address the energy shock caused by Iran-related issues, according to Bruegel. The report highlights financial measures taken amid rising fuel prices, as illustrated by a gas station in Berlin.