Cleantech Group’s Managing Director for APAC, Summer Bae, gathers perspectives from investors across the Asia Pacific to assess which markets exceeded expectations in 2025 and offers her take on their retrospective overviews.
Looking back:
Which Asian markets showed stronger-than-expected momentum in 2025, and why?
Max Han, CEO, Managing Director, Sopoong Ventures
In 2025, the Asian market was defined by a shift from “green promises” to “geopolitical green reality.” Three areas significantly outperformed expectations:
- China’s “Green Soft Power” and Early Peak:
- China demonstrated overwhelming momentum, reportedly reaching its carbon emission peak in 2025—years ahead of schedule. By leveraging its 95% global market share in solar cells and dominant battery supply chain, China transitioned from a mere manufacturer to a “Green Infrastructure Exporter” across Southeast Asia and the Global South. This forced other Asian markets to accelerate their own deployments to remain competitive.
- South Korea’s AI-Climate Intersection:
- While the “AI Transformation (AX)” was expected, the speed at which it collided with energy constraints was startling. The massive surge in power demand for AI data centers (predicted to reach 6.2GW in Korea by 2029) turned Energy Efficiency AI and Grid-Management Tech from “nice-to-have” into “survival-critical” sectors. Korea’s ability to pilot high-density energy solutions in a restricted grid environment served as a powerful blueprint for other industrialized Asian nations.
- The Strategic Tension: Green Finance vs. Transition Finance
- As we move toward the end of 2026, the central tension in Asian capital markets lies between “Pure Green Finance” and “Pragmatic Transition Finance.”
- The Conflict: Green Finance has traditionally focused on “born-green” assets (solar, EVs). However, we are seeing a saturation in these “easy” wins. The real battle for the 1.5°C goal is now in the Hard-to-Abate sectors (steel, petrochemicals, cement).
- I see a growing momentum for Transition Finance—capital specifically designed to decarbonize “brown” industries. The tension arises from fears of “greenwashing,” but as the 2026 outlook suggests, without massive capital flow into industrial process innovation, reaching Net Zero is impossible. I think we need to prioritize startups that provide the “technological bridge” to make transition finance transparent and verifiable.
Summer’s take:
Really sharp framing on the shift from “green promises” to “geopolitical green reality.” And China’s low-carbon technology adaptation and deployment speed have been genuinely astonishing—few markets can move from innovation to scaled execution that fast. That speed will increasingly shape the broader APAC playbook, not just through supply chains, but by pushing innovation and competitive responses across the region.
The point on Korea’s AI-climate intersection also lands: the AI + grid collision is making energy efficiency, grid intelligence, and storage feel less like “nice-to-have” and more like infrastructure survival.
On the green versus transition finance tension, I’d slightly challenge the framing that “transition finance is the new wave.” It’s been the unavoidable reality for years because heavy industry doesn’t flip overnight. The real question isn’t whether we need transition finance—it’s how to structure it so it funds measurable, credible trajectory change.
Dr. Eric Wang, Managing Partner, GRC SinoGreen
In early 2025, China experienced a sharp rise in AI optimism. Following Deepseek’s rise in January, governments, corporates, and investors globally recognized the possibility of China emerging victorious in the AI Era.
From a capital markets perspective, this sentiment is clear: Greater China is leading the world in terms of AI-related IPO financings. Driven by the new A-to-H dual listing and Chapter 18A+18C reforms, Hong Kong has become a market primed for China’s AI IPOs and reclaimed its spot as the top IPO market globally. In the past few weeks alone, several AI companies have successfully floated in Hong Kong, including Zhipu AI, MiniMax, Omnivision, GigaDevice, and Biren Technology. Mainland China exchanges have also seen AI IPOs from companies such as Moore Threads and MetaX.
Summer’s take:
As recently contended in Anthony DeOrsey’s 2026 Cleantech Outlook, AI growth poses a challenge for current power systems, but there are opportunities for AI-enabled cleantech to make the system more efficient. The case of China’s AI market surge substantiates this contention. With AI set to be central to the CCP’s 15th Five Year Plan, power-hungry AI systems will continue to rapidly expand. Despite this, Xi Jinping’s policy to peak emissions by 2030 will simultaneously encourage funding for energy-efficient AI infrastructure technologies that bridge the gap. Although China’s AI expansion will accelerate, impactful AI-enabled cleantech innovations will emerge in tandem.
Fariz Ali, Managing Partner, Twin Tower Ventures
China outperformed in 2025 with its $1.2T trade surplus (all-time high), which provided a stabilizing macro pillar despite tariff and geopolitical concerns. China continues to invest and export cleantech extensively, with 2025 foreign FDI exceeding $80 billion across the green energy sector. Hong Kong also reclaimed its position as the world’s top IPO market, driven by technology-led listings and strong policy support. China’s technological leadership remained evident with the Australian Strategic Policy Institute (ASPI) Critical Technology Tracker reporting China leading in 66 of 74 critical technologies and topping 8 of the 10 newly added categories, reflecting sustained policy alignment and execution depth across frontier technologies.
Summer’s take:
China’s movements will have an outsized impact on global cleantech—but not simply because of scale or capital flows. What matters is how China aligns policy, infrastructure, and industrial execution, and how those signals reshape global cost curves.
The surge in AI activity highlights a familiar pattern. As AI-driven compute demand accelerates, it is already colliding with grid constraints, power availability, and emissions targets. That tension is where China tends to move fastest—deploying solutions across energy-efficient data centers, grid optimization, power electronics, and storage at system scale.
Unlike the U.S. or Europe, China’s innovation model is infrastructure-led and mandate-driven. When deployment is locked in through policy and state-backed execution, learning rates compress, and global prices move—as seen previously in solar, batteries, and EVs.
China’s influence will come as realities: lower costs, higher efficiency expectations, and faster timelines. In the AI era, China’s cleantech impact will be indirect but unavoidable, shaping the pace and economics of the global transition.
By the end of 2026, which investment themes in Asia are most likely to gain traction—and which may lose momentum?
