In a recent analysis of the Asia-Pacific region, insights were gathered from various investors on which markets outperformed expectations in 2025. Leading this discussion was Summer Bae, Managing Director for Cleantech Group’s Asia-Pacific division. The examination focused on the shift in markets, particularly emphasizing China and South Korea, and how their strategies shaped the future trajectory of cleantech in the region.
Key Performers in 2025: A Closer Look
China: The Green Infrastructure Exporter
In 2025, China marked a pivotal moment in its environmental strategy, reaching its carbon emissions peak earlier than anticipated. The nation harnessed its substantial 95% global market share in solar cells and a robust battery supply chain. This enabled China to transition from a manufacturing hub to a leader in green infrastructure exporting, influencing Southeast Asia and the Global South.
South Korea: The AI-Climate Intersection
South Korea’s unexpected rapid integration of artificial intelligence (AI) within its energy systems highlighted its role in the cleantech sector. As power demand surged due to the rise of AI, projected to hit 6.2GW by 2029, sectors focused on energy efficiency became crucial. The country’s innovative strategies in high-density energy solutions have set a benchmark for industrialized nations.
The Climate Finance Dilemma
Transition Finance vs. Green Finance
As we approach the end of 2026, tensions in Asia’s capital markets revolve around Green Finance and Transition Finance. Green Finance traditionally prioritized renewable energy assets, but the saturation of these investments compels a shift towards decarbonizing high-emission sectors like steel and cement. Without substantial funding for industrial processes, achieving net-zero emissions remains a formidable challenge.
There is an increasing emphasis on startups that facilitate a clear pathway for Transition Finance, providing solutions that enable measurable changes towards sustainability.
China’s AI Surge and Capital Markets
IPO Landscape on the Rise
In early 2025, China experienced a wave of optimism surrounding AI. This positive sentiment was evident as Greater China led globally in AI-related initial public offerings (IPOs), particularly in Hong Kong. Innovative companies like Zhipu AI and others successfully launched on this platform, showcasing China’s dominance in AI technology.
According to the Australian Strategic Policy Institute, China leads in 66 out of 74 critical technologies, which solidifies its position as a technological powerhouse and impacts policies driving AI infrastructure development.
Economic Stability and Trade Surplus
Trade Surplus of $1.2 Trillion
China recorded a historic trade surplus of $1.2 trillion in 2025, providing a reliable economic foundation amid global tariff challenges. This consistent investment in cleantech, with foreign direct investment surpassing $80 billion, reflects China’s commitment to leading the global transition towards sustainable energy practices.
Future Investment Themes in Asia
As 2026 approaches, investors are keenly observing which sectors may flourish and which might lose traction. The emphasis will likely remain on integrating AI with energy systems, fueling demand for innovative cleantech solutions. China’s influence will continue to reshape the industry, setting the stage for accelerated transitions in the global energy landscape.
