China’s Electricity Strategy Is Becoming Its Industrial Edge

Allianz Global Investors argues that China’s push toward large-scale electrification is evolving from an energy transition into a core driver of industrial and technological competitiveness. 

• China already operates the world’s largest power system, with significantly higher generation and capacity than the U.S. and EU, and electrification rates projected to rise toward 50% over time.
• Massive investment is shifting from generation to grid efficiency, storage and ultra-high-voltage transmission, enabling nationwide integration of renewable energy.
• A vertically integrated domestic supply chain—from solar panels to power equipment—supports rapid deployment, though oversupply is pushing firms to expand globally.

As electricity becomes the backbone of AI, manufacturing and mobility, the report suggests China’s advantage may lie not just in scale—but in building a self-reinforcing energy-industrial system.