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Renewable Energy: The Trillion Dollar Opportunity for Chinese Overseas Investment

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  • Miquel Muñoz Cabré
  • Kevin P. Gallagher
  • Zhongshu Li

Abstract

This paper compares the global flows of Chinese overseas investment in power plants with renewable energy investment potential embodied in “Nationally Determined Contributions.” With over US$1tn (671 GW) in Nationally Determined Contributions renewable energy investment potential in developing countries, we estimate the total level of power plant investments from China's policy banks and commercial entities since the early 2000s at US$216bn (158 GW). Although past investment has mainly been directed at fossil fuels and hydroelectric power, we argue that China is uniquely poised to lead renewable energy global investments for three reasons: (i) China's solar and wind industries are globally competitive; (ii) Chinese policy banks can give domestic firms advantages in financing global expansion; and (iii) renewable energy investment opportunities still exist in developing countries with less sovereign risk than for traditional energy investments. The Chinese government should provide special incentives for the policy banks to capitalize on these investment opportunities by deploying Chinese solar and wind technologies to Belt and Road countries and beyond.

Suggested Citation

  • Miquel Muñoz Cabré & Kevin P. Gallagher & Zhongshu Li, 2018. "Renewable Energy: The Trillion Dollar Opportunity for Chinese Overseas Investment," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(6), pages 27-49, November.
    • Handle: RePEc:bla:chinae:v:26:y:2018:i:6:p:27-49
    DOI: 10.1111/cwe.12260
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    2. Pedersen, Rasmus Hundsbæk & Andersen, Ole Winckler, 2023. "A contested agenda: Energy transitions in lower-income African countries," Energy Policy, Elsevier, vol. 175(C).
    3. Zhao, Jinjing & Pan, Jie & Xie, Xiangwei & Su, Miao, 2024. "Green outward foreign direct investment and host country environmental effects: The home country's carbon emission reduction system is crucial," Energy, Elsevier, vol. 290(C).
    4. Aghilasse Kashi & Mohamed Eskandar Shah, 2023. "Bibliometric Review on Sustainable Finance," Sustainability, MDPI, vol. 15(9), pages 1-30, April.
    5. Emodi, Nnaemeka Vincent & Wade, Belinda & Rekker, Saphira & Greig, Chris, 2022. "A systematic review of barriers to greenfield investment in decarbonisation solutions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 165(C).
    6. Karolina Daszyńska-Żygadło & Krzysztof Jajuga & Justyna Zabawa, 2021. "Bank as a Stakeholder in the Financing of Renewable Energy Sources. Recommendations and Policy Implications for Poland," Energies, MDPI, vol. 14(19), pages 1-22, October.
    7. Lin, Boqiang & Bega, François, 2021. "China's Belt & Road Initiative coal power cooperation: Transitioning toward low-carbon development," Energy Policy, Elsevier, vol. 156(C).
    8. Vladimir Litvinenko, 2020. "The Role of Hydrocarbons in the Global Energy Agenda: The Focus on Liquefied Natural Gas," Resources, MDPI, vol. 9(5), pages 1-22, May.
    9. Springer, Cecilia Han, 2022. "China’s withdrawal from overseas coal in context," World Development Perspectives, Elsevier, vol. 25(C).
    10. Yang, Bo & Swe, Thidar & Chen, Yixuan & Zeng, Chunyuan & Shu, Hongchun & Li, Xin & Yu, Tao & Zhang, Xiaoshun & Sun, Liming, 2021. "Energy cooperation between Myanmar and China under One Belt One Road: Current state, challenges and perspectives," Energy, Elsevier, vol. 215(PB).
    11. Lema, Rasmus & Bhamidipati, Padmasai Lakshmi & Gregersen, Cecilia & Hansen, Ulrich Elmer & Kirchherr, Julian, 2021. "China’s investments in renewable energy in Africa: Creating co-benefits or just cashing-in?," World Development, Elsevier, vol. 141(C).

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