Anyone unusually keen to feel anxious, depressed or even utterly terrified might wish to quietly leaf through the pages of the World Economic Forum’s Global Risks Report. This annual analysis of the threats facing our planet and its inhabitants invariably makes for sobering reading.
As if the sheer variety and scale of the challenges weren’t daunting enough, the WEF scans the horizon through the lens of interconnected causality. Such a framing underlines how the dangers we collectively face form a complex network of cascading and compounding interactions.
Like every edition before it, 2026’s report places great emphasis on the climate crisis. Environmental decline is directly or indirectly linked to nearly every other risk, including economic downturn, inequality and even cyber-insecurity1.
“Climate action is caught in societal, political and economic crosswinds,” warns the report. “The growing divergence between rising demand for energy on the one hand and climate change and associated social realities on the other could come to a head in the coming years. Difficult, values-based choices will continue to emerge in the race between economic, political, climate and societal considerations.”
This sounds suspiciously like a polite way of saying we’re in an absolute mess. Both as citizens of the Earth and as investors, we might usefully ask who could be best placed to lead us out of it.
It seems futile to look to the world’s largest economy, at least under its current aegis. Re-withdrawing from the Paris Agreement, branding climate change “a scam”, espousing an ethos of “Drill, baby, drill!” – no, the US doesn’t exactly fit the bill right now.
So what about the world’s second-largest economy? Sceptics – including many investors – might scoff, but there’s good reason to believe China represents a far more convincing candidate.
Established leadership
Although the news went practically unremarked in much of the West, including the UK, China recently passed a major milestone in its retreat from fossil fuels. Solar energy accounted for 1,286 gigawatts of the country’s overall power generation at the end of July – three gigawatts ahead of coal2.
While it could be viewed as a hair’s breadth in the grand scheme of things, this gap is hugely significant. China first embraced electrification more than a century ago and coal had been its principal power source ever since. Having lived in Shanghai in the mid-2010s, even I can remember when blue skies were a rarity.
With some justification, the National Energy Administration (NEA) hailed solar’s long-awaited supremacy as “a signature achievement”3. Yet this is just the latest in a series of environmental and energy-related landmarks – some widely appreciated, others less so.
Most of us are by now well aware, for instance, that China builds and sells more electric vehicles (EVs) than any other nation. BYD officially knocked Tesla off its perch earlier this year, having racked up over 4.5 million sales in 20254.
It pretty much follows that China also enjoys primacy in the field of EV batteries. CATL, a company founded only 15 years ago, is at the vanguard, with an international client roster that includes BMW, Ford and Volkswagen.
Then there’s wind. Beijing claims China has ranked first globally in terms of installed wind power capacity for the past 15 years and it’s hard to imagine any other economy could seriously contest this assertion5.
And we mustn’t overlook the bigger picture with regard to solar, of course. In the words of the NEA, China boasts “the most complete and competitive” photovoltaic industrial supply chain in existence. Around 80% of all solar modules are now made in China.
Interconnected causality as a positive
A vital point here is that the impacts of China’s energy-transition efforts aren’t confined to China itself. Chinese EV, battery, wind and solar companies are constantly furthering their reach.
Crucially, many of the most promising businesses in this space – as in so many others – can be found beyond the obvious names. As a fund that specialises in Asian smaller companies, we particularly like brand-agnostic “enablers” that are capable of responding to or even pioneering disruption.
CATL is a classic example. Today we believe the likes of Zhejiang Shuanghuan Driveline and Precision Tsugami are among the promising, high-quality businesses that are cut from similarly green and attractive cloth.
It’s worth noting, too, that the phenomenon of interconnected causality works both ways. Just as failures in one sphere can trigger negative ripple effects elsewhere, progress in one sphere can trigger positive ripple effects elsewhere.
By way of a quick illustration, take the aforementioned link between environmental damage and cyber-insecurity. It’s by no means as tenuous as it might initially appear.
The rise of artificial intelligence and the consequent energy-intensive demands imposed by data centres have made reliable energy systems a must. In Changshu, a city in China’s Jiangsu province, computing infrastructure now safely consumes more electricity than residential air-conditioning6.
In the final reckoning, investing requires optimism – which helps explain why a key trick to surviving The Global Risks Report lies in recalling that humanity has a remarkable way of innovating its way out of trouble. Both in relation to environmental issues and other challenges, investors shouldn’t underestimate China’s capabilities in this regard.
Xin-Yao Ng is co-manager of the Aberdeen Asia Focus investment trust. The views expressed above should not be taken as investment advice.
2 South China Morning Post: Beyond coal: China’s installed solar power capacity crosses historic threshold, September 2 2026.
3 Ibid.
4 BBC News: China’s BYD overtakes Tesla as world’s top EV seller, January 2 2026.
5 CGTN: China’s installed wind power generation capacity tops world for 15 consecutive years, October 21 2025 –
6 South China Morning Post: Beyond coal: China’s installed solar power capacity crosses historic threshold, September 2 2026