Atlantic Council
April 2026
GLOBAL ENERGY CENTER
Issue brief A US strategy for energy competition with China in emerging markets
By Steven Burns
Bottom lines up front •
Emerging economies are set to drive the largest share of energy demand growth over the next two decades, making them a central arena for competition over influence in the future of global energy systems.
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China has positioned itself as the dominant partner for energy and infrastructure development across the Global South, in part by pairing state-backed finance with turnkey project delivery, which allows Chinese firms to shape technical standards and financing norms while securing long-term positions in future procurement and service markets.
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The United States can compete more effectively by organizing its financing, project development, and technical capabilities into a coherent offer that is closer to the speed and simplicity of competing models, while preserving the transparency and predictability on which partners rely.
Introduction The United States faces a pivotal strategic challenge: how to compete with China for influence in the energy markets of developing countries. As the global energy transition accelerates, emerging economies are set to drive the largest share of energy demand growth over the next two decades. The countries that succeed in supplying these markets with the necessary goods and services will secure more than commercial advantage; they will define the technical standards, financing norms, and long-term political alliances that govern the future of global energy systems. For Washington and its allies, the stakes couldn’t be higher. China has positioned itself as the dominant partner for energy and infrastructure development across the Global South. Through the Belt and Road Initiative (BRI) and other state-directed programs, Beijing has paired concessional loans, export credits, and sovereign guarantees with
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turnkey project delivery. Underpinned by an industrial policy that subsidizes production across the supply chain, this model has enabled Chinese firms to supply everything from ports to power plants, often at lower cost than Western competitors. By bundling finance and delivery, China has offered governments a politically attractive package: rapid infrastructure development with few governance conditions attached, even if this approach has raised some concerns about opaque terms and longterm dependence on Chinese suppliers and financing. The result is that Chinese products and standards increasingly dominate critical sectors of the energy economy. The United States and its allies bring different strengths. Western firms lead in advanced technologies such as natural gas turbines, digital energy management systems, grid-enhancing technologies, and advanced wind, solar, and hybrid renewable