IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/141319.html

How China's growth model fosters green industrial dominance

Author

Listed:
  • Larsen, Mathias

Abstract

What explains China's global dominance of green industries? Here, I show that China's politics determine its growth model, and the growth model fosters clean tech development. First, China's authoritarian politics entail a growth-security trade-off, a preference for investment and exports, the elimination of powerful industrial coalitions, and a high degree of state capacity. Second, clean industries fit all of these four dimensions: 1) They reduce reliance on energy imports and allow China to keep green supply chains within its control. 2) They provide new drivers of investment and exports as real estate and low-skilled manufacturing lose their ability to drive growth. 3) No incumbent industrial coalition can resist their expansion, as the same stateowned companies often own both clean and dirty assets. 4) Finally, without electoral or legal constraints, the party-state supports them through supply-side, demand-side, and macro-structural policies. Consequently, China has achieved green growth by decoupling emissions from growth. However, emission-intensive industries also fit the growth model, meaning the shift to clean technologies is, so far, proportional rather than nominal. Further progress requires either political and economic reform, which is unlikely, or technological progress that lets clean technologies outcompete fossil alternatives.

Suggested Citation

  • Larsen, Mathias, 2026. "How China's growth model fosters green industrial dominance," LSE Research Online Documents on Economics 141319, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:141319
    as

    Download full text from publisher

    File URL: https://researchonline.lse.ac.uk/id/eprint/141319/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Lucio Baccaro & Jonas Pontusson, 2022. "The politics of growth models," Review of Keynesian Economics, Edward Elgar Publishing, vol. 10(1), pages 204-221, January.
    2. Driscoll, Daniel & Kiefel, Max & Larsen, Mathias, 2026. "Internationalizing industrial policy: how China and the United States use state capacity to secure critical minerals for electric vehicles," LSE Research Online Documents on Economics 137142, London School of Economics and Political Science, LSE Library.
    3. Wu, Mingqin & Cao, Xun, 2021. "Greening the career incentive structure for local officials in China: Does less pollution increase the chances of promotion for Chinese local leaders?," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    4. Daniel Driscoll & Max Kiefel & Mathias Larsen, 2026. "Internationalizing Industrial Policy: How China and the United States Use State Capacity to Secure Critical Minerals for Electric Vehicles," Politics & Society, , vol. 54(2), pages 215-246, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nieyan Cheng & Wendong Zhang & Tao Xiong, 2025. "Heterogenous impact of China's place‐based environmental regulations on its hog industry: A synthetic difference‐in‐differences approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 73(2), pages 203-223, June.
    2. Li, Houjian & Tang, Mengqian & Cao, Andi & Guo, Lili, 2024. "How to reduce firm pollution discharges: Does political leaders' gender matter?," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    3. Qi, Yu & Yin, Aoxue & Chen, Jianwei & Yang, Chunfei & Zhan, Pengyu, 2024. "Motivating for environmental protection: Evidence from county officials in China," World Development, Elsevier, vol. 184(C).
    4. Luo, Shiyue & Lu, Mingyue & Ye, Jinhui & Guo, Yuying & Hao, Yu, 2025. "Nurturing finance and harvesting intelligence: The green growth of urban industrial intelligence fueled by green finance," Research in International Business and Finance, Elsevier, vol. 80(C).
    5. Wen, Qiang & Zhang, Teng, 2022. "Economic policy uncertainty and industrial pollution: The role of environmental supervision by local governments," China Economic Review, Elsevier, vol. 71(C).
    6. Klaus Eisenack, 2024. "Why Local Governments Set Climate Targets: Effects of City Size and Political Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(11), pages 2935-2965, November.
    7. Zihao Ma, 2025. "Towards environmental deliberative democracy in China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-11, December.
    8. Qing He & Tianyu Yao & Liang Guo & Chi Zhang, 2025. "Clan culture and carbon emission intensity," International Review of Finance, International Review of Finance Ltd., vol. 25(3), September.
    9. Cheng, Xiaomeng & Li, Zhao & Liu, Pan & Qi, Yu, 2026. "Sticks and carrots: Effect of environmental regulation and local industrial policy on cross-regional subsidiaries," Journal of Asian Economics, Elsevier, vol. 104(C).
    10. Chen, Bochao & Wang, Hang & Wang, Xianbin, 2024. "Innovation Like China: Evidence from Chinese Local Officials' Promotions," China Economic Review, Elsevier, vol. 86(C).
    11. Chen, Ying & Wu, Wenjie & Yun, Yanwen, 2025. "The geography of pollution regulation and productivity," Journal of Environmental Economics and Management, Elsevier, vol. 131(C).
    12. Junsong Wang & Bingquan Lin, 2024. "The dilemma between economic development and environmental protection: How political leadership turnover influences urban air pollution in China?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(9), pages 23663-23681, September.
    13. Bai, Zhouling & Zhang, Pan & Yi, Hongtao, 2025. "Political career incentives and multitasking trade-off: Evidence from setting performance targets in Chinese cities," China Economic Review, Elsevier, vol. 94(PB).
    14. Yu, Haijing & Shen, Shaowei & Han, Lei & Ouyang, Jian, 2024. "Spatiotemporal heterogeneities in the impact of the digital economy on carbon emission transfers in China," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    15. Chun Yang & Jun Zhang & Ruilin Li, 2025. "Political official turnover and environmental governance: who is more influential on local air pollution in China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-14, December.
    16. Yao, Yao & Li, Xue & Smyth, Russell & Zhang, Lin, 2022. "Air pollution and political trust in local government: Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    17. You, Chen & Cifuentes-Faura, Javier & Liu, Xiaoqian & Wu, Jinqun, 2024. "Can the government environmental vertical reform reduce air pollution? A quasi-natural experiment in China," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 947-963.
    18. Yu, Xuewei & Zhou, Junting & Ni, Kejin & Wang, Xiaobing, 2025. "Environmental centralization and firm green transition: Evidence from County-to-District reclassification in China," Energy Economics, Elsevier, vol. 144(C).
    19. Zhengqing Zhou & Hongshan Ai & Jiacheng Liu & Malin Song & Huiyu Yang, 2025. "Auditing the Leader: The Impact of Targeting Local Officials’ Environmental Regulations on Innovation," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 1258-1290, March.
    20. Lei Du & Shenggang Ren, 2024. "CEO poverty experience and corporate environmental violations," Business Strategy and the Environment, Wiley Blackwell, vol. 33(3), pages 1853-1864, March.

    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:141319. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.