BEIJING, Dec 8 (Reuters) – Chinese firms have committed some $80 billion in clean technology investments overseas over the past year as they sought new markets to absorb a supply glut, according to a report by Australian research group Climate Energy Finance (CEF).
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Chinese firms dominate supply chains for clean technologies such as critical minerals processing, solar panels, and batteries. Chinese foreign investment in clean energy infrastructure helps create markets for such products.
“China’s got a supply glut when it comes to green technology, like solar panels and batteries, because of a structural supply-demand mismatch, so they need overseas markets to absorb their products,” report author and CEF China engagement lead Caroline Wang said.
OPPORTUNITIES FOR EMERGING MARKETS, RISK OF MISSING OUT
That also presents opportunities for emerging economies seeking to reduce their dependence on imported fossil fuels, Wang said.
Research from the Net Zero Industrial Policy Lab at Johns Hopkins University found that 75% of China’s low-carbon foreign direct investment is in Asia, the Middle East, Africa, and Latin America.
The Middle East and North Africa were the fastest-growing investment destinations, driven by national strategies for diversifying away from oil.
Chinese firms increasingly favoured large-scale projects integrating upstream and downstream supply chains, CEF found.
Another incentive for emerging economies is “not wanting to miss out on this technological revolution,” Wang said.
“China’s leading the world in the technologies, in the innovation, and if you don’t get into the supply chain quickly, there’s a risk you miss out on innovation opportunities.”
Reporting by Colleen Howe; Editing by Aidan Lewis
Our Standards: The Thomson Reuters Trust Principles.
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