China’s investments in clean tech — $625 billion in 2024, according to the International Energy Agency — have fueled a staggering transformation. China now produces about two-thirds of the world’s electric vehicles, more than 60 percent of its wind turbines and more than 85 percent of its battery capacity. Last year, the I.E.A. predicted that China’s export of clean-energy technologies in 10 years will reach $340 billion annually, roughly the same as the current oil exports from Saudi Arabia and the U.A.E. combined.
The world’s two superpowers are speeding in opposite directions. As America abandons its commitment to wind, solar and electric vehicles — the Trump administration’s so-called “big beautiful bill” slashes support for all three — China is strengthening its hold over nearly every link in the supply chains for renewable energy. “There are tectonic shifts underway in clean energy that cut to the core of the great power competition between the U.S. and China,” says Milo McBride, a clean-energy expert at the Carnegie Endowment for International Peace. “The U.S. is doubling down on its position as the largest oil and gas producer and exporter. Across the Pacific, China is expanding its prowess as the world’s manufacturer and exporter of clean-energy technologies of the future.”
The changes inside China are vital for the planet. But what is happening outside its borders — in the proliferation of China’s clean-energy exports — may have a more enduring impact on the climate and geopolitics. The flood of relatively low-cost Chinese green technology now reaches nearly every corner of the world. Sleek new Chinese electric vehicles fill the streets of Bangkok, São Paulo and Addis Ababa. Chinese-built solar panels blanket the sun-drenched cities of Pakistan and the 13,000-foot altiplano of Argentina. Wind farms with towering Chinese turbines dot the narrow coast of Bosnia, the plains of Kenya and, of course, the highlands of southeastern Laos. Last year, astonishingly, China exported clean-energy technology to 191 of the 192 other U.N. member states, according to an analysis by Lauri Myllyvirta of the Centre for Research on Energy and Clean Air (CREA) in Helsinki. The only country not on the list: the Central African Republic.
So far, these foreign deals have not alleviated debt or poverty in Laos, where the average rural income is estimated to be around $18 a month. Even if official corruption can be avoided, analysts say, a good portion of Laos’s energy revenues ends up servicing the country’s ballooning external debt. It’s a Catch-22: Costly infrastructure projects meant to bolster the economy have saddled Laos with more than $10 billion in external debt, about half of which is owed to China. The Lao government is not only unable to repay its debt to China; it struggles even to make the interest payments. “Whether by design or neglect, China has created a debt trap in Laos,” an April 2025 report by the Lowy Institute, an Australian think tank, concluded.
This is not unusual. Following Woirld War II the US offered grants and loans to countries in Europe and to Japan. The grants were gifts, but the loans had to be repaid, and in fact Great Britain did not finish paying off those loans until 2005. I cannot find a record of when Japan finished paying (assuming it did) but the loans were for hundreds of millions of dollars - which came in addition to grants worth billions. Both Europe and Japan seem to have done fairly well by it, no?
That doesn’t mean that China’s loans to Laos, for example, will, just that “the debt trap” is a boogey-man scary word - that every home owner witbh a mortgage understands can end happily, and sometimes sadly.
Both Europe and Japan had developed economies that could be rebuilt for growth and to pay off the debts. Laos is certainly not a developed economy, and the money generated by the wind projects must be paid for by the electricity exports – China isn’t giving the turbines away.
Laos does export electricity, almost all of it from hydropower. But, as the article notes, Laos is struggling to even meet the interest payments, much less pay down the debt for the wind projects.
In addition, the turbines have a finite lifetime and will need to be replaced in a couple of decades. If the debt hasn’t been paid off then Laos will have to borrow more money to finish paying for them or borrow more money to replace them (or both). Hence the phrase ‘debt trap’.
AS the NYT article notes, “Even under the most optimistic scenarios, Laos cannot escape the crisis in the absence of substantial debt relief.”