How China Transformed Electricity into a Tool for Economic Dominance

Kazi Abul Monsur#
In today’s world, there is a common perception that the larger a country’s population, the higher its electricity demand will be. While this is partially true, the reality is often quite different. In the modern economy, electricity demand is increasingly determined by a nation’s industrial production structure and technological advancements, rather than sheer population size. This largely depends on the country’s overall electricity generation capacity and supply management system.

A closer analysis of global electricity production and consumption reveals that China has developed a modern and highly organized production-based economy, where approximately 68% to 70% of its total electricity generation is consumed by the industrial sector. The remaining electricity is used in the household sector (~14%) and the service sector (~16%). This clearly demonstrates that in the 21st century, industrialization—not population—is the primary driver of electricity consumption.

Over the past four decades, China’s remarkable growth in electricity production, consumption, and demand has been fueled not merely by population, but by the extraordinary expansion of its industrial base and technological progress. As a result, China has emerged as the world’s leading country in electricity generation, supply, and usage. In contrast, the United States held this position for nearly a century as the world’s largest economy and technology powerhouse.

In 2024, China’s total installed electricity capacity was around 2,900–3,000 gigawatts (GW), accounting for roughly 35% of the world’s total generation capacity. The country’s peak instantaneous power demand reached approximately 1,600 gigawatts, and its annual electricity consumption surpassed 8,700 terawatt-hours (TWh)—nearly 31% of global energy use.

Significantly, in 2024 China surpassed coal for the first time in terms of total installed renewable energy capacity (hydro, solar, and wind), reaching 51% of its total capacity. However, coal still remains dominant in terms of actual electricity generation. Despite this progress, China continues to lead globally in carbon emissions.

Across the country, China has ensured affordable and uninterrupted electricity supply to millions of manufacturing industries. Currently, electricity in China’s industrial sector is supplied at just $0.08 per kilowatt-hour (kWh) or even lower, supported by government subsidies. Additionally, special economic zones (SEZs) operate under different pricing policies to accelerate industrial growth and sustainability under President Xi Jinping’s administration.

In contrast, India in 2024 had a total installed electricity capacity of 445–450 gigawatts, with an annual consumption of around 1,700–1,800 TWh. Despite having a population larger than China’s, the stark difference in electricity usage reflects the disparity in the level of industrialization between the two countries.

In India, about 42% of electricity is used in the industrial sector, while significant portions are consumed by agriculture (~15–20%) and households (~25%). However, India has made planned progress in electricity generation in recent years, adding about 18 gigawatts of solar power to its national grid in 2024 alone, marking a major milestone.

In China, over 70% of electricity is consumed by energy-intensive sectors such as steel, aluminum, automobiles, textiles, chip and electronics manufacturing, and heavy machinery. Comparatively, in the US and Europe, only about 35–45% of electricity is used in the industrial sector. This highlights China’s strength not only in electricity production but also in the efficient use of electricity within its industrial ecosystem. For lower-income countries like Bangladesh, this could serve as a model for industrial development through effective electricity production, supply, and management.

China has strategically built a “Massive Manufacturing Ecosystem”, earning it the title of the “World’s Factory Hub.” Today, a vast majority of the world’s mobile phones, laptops, solar panels, home appliances, and electronic components are manufactured in China. Leveraging its immense electricity production capacity, the country has positioned itself at the pinnacle of global market competition.

Currently, China is advancing in Electric Vehicles (EVs), battery technology, artificial intelligence (AI) chips, and semiconductors. While the US, South Korea, and Taiwan still dominate in AI chips and semiconductors, China’s state-led investments and electricity-dependent infrastructure are propelling it toward a stronger position in these sectors.

China’s industrial strength has an impact not only domestically but also in the global export market. In 2024, China exported approximately $927.6 billion worth of electronics, home appliances, telecom, and technology products (Source: UN Comtrade, China Customs), making it the world’s top exporter in terms of revenue.

By comparison, the US exported around $440–450 billion in high-tech products (aerospace, medical equipment, chips, etc.) during the same period, while India—a rising economy in South Asia—exported about $38.58 billion in technology products, primarily mobile phones, TVs, circuit boards, and components.

China has not viewed electricity merely as a source of energy but has transformed it into a strategic tool of the Fourth Industrial Revolution. Countries aspiring to lead the global economy in the coming decades must adopt integrated policies for electricity generation, industrial use, and technological advancement.

In conclusion, for Bangladesh to achieve sustainable industrialization and enhance its export capacity, it is crucial to ensure uninterrupted and affordable electricity supply and to formulate and implement industry-focused electricity policies. In this regard, China’s experience can serve as a guiding example.