China’s overseas investments in renewables have surpassed fossil fuels for the first time since Beijing began subsidizing foreign energy projects in the early 2000s.
This shift has wide-ranging international implications for everything from climate change to geopolitics, and highlights China’s growing dominance in renewable energy technologies and the mineral and technology supply chains that support them.
Historically, coal-fired power plants have dominated China’s state-backed Belt and Road Initiative (BRI) and its predecessor program. But between 2022 and 2023, 68% of China’s overseas energy investments went to solar and wind projects, according to a new analysis from Boston University’s Center for Global Development Policy.
From 2000 to 2021, only 13% of China’s investments in foreign energy went to solar and wind projects, according to a new analysis by the Center for Global Development Policy at Boston University.
China’s state-backed overseas investment program has pumped hundreds of billions of dollars into infrastructure and energy projects in Latin America, Africa, Southeast Asia and elsewhere.
China’s overseas investments in wind and solar energy were mainly concentrated in countries in Asia and the Americas, while only 4% flowed to African countries, according to Diego Moro, co-author of the analysis and a data scientist at Boston University.
The analysis indicates that China is sticking to its 2021 pledge not to finance new coal-fired power plants abroad, although there is no indication that coal power investments underway as of 2021 will be canceled. These investments “are still underway and will emit carbon dioxide for decades to come,” the researchers said.
“This shift does not represent a significant breakthrough in the renewable energy sector, as the amount of funding is still relatively small,” the researchers say. Only 3 gigawatts of solar and wind power were financed between 2022 and 2023. By comparison, China’s average annual investment in offshore energy between 2013 and 2019 was 16 gigawatts.
While coal power dominated those earlier investments, hydropower and gas projects came in second and third.
Global leadership
Domestically, China continues to lead the world in the development of new coal-fired power plants. Last year, 94 gigawatts of coal-fired power began construction in China, compared to 7.4 gigawatts in the rest of the world combined, according to Global Energy Watch.
In 2013, Chinese President Xi Jinping announced the Belt and Road Initiative. This program is a continuation of China’s “exit” policy from the early 2000s and has recently been dubbed the China Global Development Initiative (CGDI).
While these programs have given Beijing unprecedented geopolitical influence over more than 150 countries around the world, they have drawn heavy criticism for the environmental and human rights damage associated with the ports, mines, railways, highways and other projects financed and built by Chinese companies.
Environmentalists have criticized China, currently the world’s largest emitter of greenhouse gases, for funding dozens of coal-fired power plants in developing countries, effectively locking them into carbon-intensive forms of energy for decades to come.
In 2023, Chinese-funded power plants abroad emitted almost as much carbon pollution as Malaysia, according to a Boston University analysis.
Beijing and its allies claim that these investments have brought energy access and economic growth to some of the world’s poorest people, people who have contributed little to global warming.
Still, these criticisms prompted Xi to pledge in 2021 to stop financing and building new coal-fired power plants abroad. The new Boston University analysis suggests that Beijing has so far kept this promise in the context of state-funded projects.
Analysts see China’s shift toward low-carbon overseas investments as a strategic move. With a slowing domestic economy and a surplus of solar and wind technologies, Beijing is seeking new overseas markets to absorb its renewable energy exports.
However, there are signs that Beijing may increase its overseas investments in wind and solar, pledging $51 billion in 2024 during the China-Africa Forum to support African development and build 30 low-carbon energy projects over the next three years.
China has sought to establish itself as a global leader on climate change, with the Chinese president recently telling world leaders at a UN conference that China has built “the world’s largest and fastest-growing renewable energy system, as well as the largest and most complete new energy industrial chain.” He urged other governments to support the free flow of “high-quality green technologies and products,” especially to developing countries.
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2025-06-01 04:46:00
