Beijing model vs Brussels effect: the new race for clean energy power

The Beijing Model with the Brussels Effect

PARIS—For many years, Europe and China have embodied competing models of development and energy transition. Europe has emphasized markets, common rules, and multilateral organizations, while China has focused on industrial policy, infrastructure investment, and manufacturing. Europe developed regulations that often became global benchmarks (the “Brussels effect”). Meanwhile, China built factories.

But this distinction is beginning to fade. Europe is trying to rebuild its industrial base, while China has developed an interest in influencing international standards and governance systems. While European authorities are studying Beijing’s industrial strategy, Chinese leaders have come to realize what Europe has long understood: long-term dominance is secured not only by creating technologies, but also by developing the rules that govern those technologies.

These trends can be explained by shifts in the structure of geo-economic power. Questions about who controls resources, manufactures products, or leads in particular technologies are no longer decisive.

What matters is who controls the value chains that will drive the new energy and technological transition. These chains do more than simply link factories together; they organize finance, logistics, digital infrastructure, standards, and entire industrial ecosystems, forming a mechanism of economic power.

The European aspect of this story is well known. Faced with China’s industrial dominance in clean energy technologies and its own growing dependence, the European Union has rediscovered industrial policy. European laws on “Industrial Acceleration” and “Critical Raw Materials,” along with related measures, stemmed from the realization that climate ambitions without industrial capacity create dependence rather than sustainability.

China Has Joined the Effort to Shape Global Rules

The Chinese aspect of this story has received less attention. After twenty years of building the world’s largest ecosystem for the production of solar panels, batteries, electric vehicles, and power grids, China has concluded that industrial leadership alone is not enough. This has prompted it to invest in shaping global rules.

The most notable sign of these changes is institutional. Through the new Organization for Global Energy Integration Development and Cooperation (GEIDCO), China is establishing technical committees to set standards for photovoltaics, hydrogen, energy storage, high-voltage transmission, smart grids, and carbon accounting.

All of this may seem like technical matters, but they are far more significant. This is China’s attempt to take control of the operating system of the clean energy economy. A country that sets industry standards does more than simply regulate a particular technology. It positions itself to direct investment, determine what is compatible with what, and establish an architecture that everyone else must adhere to.

Europe has understood this for many decades. Its single market was built on common rules, not just tariff reductions, and European standards have traditionally become global.

But now European leaders have discovered that rules without manufacturing capacity do not ensure strategic autonomy, while China has realized that factories without standards limit its international influence. Each side is striving to gain the strategic advantages that the other has been refining for decades.

But this convergence does not necessarily imply symmetry. Each side is venturing beyond its traditional sphere of dominance, which means it faces new, unfamiliar challenges. Rebuilding an industrial base requires capital, cheap energy, a dense network of suppliers, and tacit knowledge. None of this can be achieved through regulation alone.

But setting global standards is by no means easier. A country can fill all the technical committees, but it still cannot force the rest of the world to accept its products. If a plant is to be built, the standard must gain widespread recognition.

Such tasks are neither easy nor quick to accomplish. Since both China and Europe are attempting to master something entirely new to them, the question of what the outcome will be remains open.

The Third Stage of the Clean Energy Race

The outcome will also be influenced by a third important factor: all other countries. This large group, of course, is not monolithic. There are a handful of ambitious countries (India, Indonesia, Brazil, and a number of Gulf states) that are building their own industrial capacity and using critical minerals, growing markets, and patient capital as levers to help them claim a share in new value chains.

But most countries cannot follow such a strategy. They will neither develop standards nor build factories, so they will end up with operating systems designed in Brussels or Beijing, resigning themselves to a dependence they did not choose.

Then there is the United States, which has decided to opt out of this race by completely abandoning the energy transition. Instead of building factories or developing rules for electrification, the U.S. is erecting tariff barriers, ceding the field to Europe and China.

The stakes are high, because managing value chains is as much a political issue as it is a technical one. It is a mini-constitution capable of quietly distributing benefits and obligations for decades to come.

That is precisely why traditional approaches to industrial policy must change. Too often, they boil down to nothing more than subsidies, tariffs, and domestic factories.

But if the first stage of the clean energy race was about inventing technologies, and the second stage was about mass-producing them, the third will be about managing the chains in which they circulate, interconnect, and create value.

For Europe, the lesson is not simply that it needs to build more factories. Europe’s real strategic advantage lies in its proven ability to turn its own rules into rules for everyone. It should not take this ability for granted, especially now that it is being challenged. Europe must continue to develop sensible regulations and offer the world standards worthy of adoption—not merely of patient tolerance.

The energy transition rewards a rare combination: the ability to produce; the authority to set rules; and institutions capable of preventing complex systems from collapsing.

No single party will be able to win by relying solely on its traditional strengths.

Emmanuel Guérin