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China’s economy posted 5% GDP growth in Q1 2026 despite the energy crisis triggered by the Middle East conflict. However, it is expected to have a negative impact over time across sectors such as solar cell manufacturing and electric vehicles (EVs).
While the broader economy still has buffers, the report noted that the energy crisis is gradually eroding growth momentum, with some sectors and regions feeling the impact more quickly and sharply than others. Another report by the Centre for Research on Energy and Clean Air (CREA) highlighted a stark contrast between renewable energy and coal generation.
The research noted a rise in coal power generation as wind, solar, and nuclear output underperformed. It found that in April, power generation by large-scale power producers rose 2.6% year-on-year, while total power generation is estimated to have increased by 6.6%.
In contrast, Wood Mackenzienoted that electric two-wheelers received a boost from rising orders in Southeast Asia. The report stated that export orders from Myanmar, Laos, and Cambodia jumped by 617%, 26%, and 34% year-on-year in the first quarter, respectively, as smaller developing Asian economies faced growing oil shortages.
The CREA research noted that, following the March surge, China’s solar cell production fell 25.6% year-on-year, reflecting weaker domestic installations and a slight pullback in exports. The report added that China’s solar manufacturing sector declined as it adjusted after last year’s exceptionally rapid deployment boom.
In contrast, battery production maintained a strong growth trajectory in April, reaching 184 GWh, up 55.6% from a year earlier, driven by robust demand from energy storage and export markets. Meanwhile, despite solar and wind generation rising by 15.4% and 9.9%, respectively, growth was constrained by exceptionally poor wind conditions during March–April and weaker solar performance. China also recorded a 13.2% decline in hydropower generation, while nuclear output fell 7.7% due to extended refuelling outages.
The report also noted that weaker crude oil imports affected refinery activity in April. Crude throughput fell 5.8% year-on-year, a decline that was 3.6 percentage points steeper than in March. Refined oil product exports also dropped sharply, plunging nearly 38% year-on-year to 3.12 million tonnes — the lowest level in almost a decade.
China saw that in the first three months of 2026, it added around 41.4 gigawatts (GW) of solar power capacity, down 31% from last year. It also added 15.8 GW of wind power capacity, which is up 8% from last year.
To meet its energy requirement, CREA’s data indicated that China relied on thermal power, which reached 24 GW capacity, up 160% from last year. On the other hand, its hydro power capacity went down 33% from last year to reach 1.4 GW with its nuclear power capacity touching around 1.2 GW.
In March 2026 alone, China added 8.9 GW of solar power capacity, down 56% from last year, 4.8 GW of wind power capacity, down 9% from last year, 4 GW of thermal power capacity, down 26% from last year, 0.22 GW of hydro power capacity, same as last year; 0 GW of nuclear power capacity, same as last year.
We are India’s leading B2B media house, reporting full-time on solar energy, wind, battery storage, solar inverters, and electric vehicle (EV)
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