IDEAS home Printed from https://ideas.repec.org/a/bla/glopol/v12y2021i3p260-272.html
   My bibliography  Save this article

Chinese Overseas Investment Policy: Implications for Climate Change

Author

Listed:
  • Kelly Sims Gallagher
  • Qi Qi

Abstract

President Xi Jinping launched the Belt and Road Initiative (BRI) in 2013. In total capital, China is now the largest investor in least‐developed countries and in developing Asia, and the fifth‐largest investor in Africa. Motivated by concerns about the climate change consequences of China’s overseas investments, this paper identifies and evaluates Chinese policies governing China’s overseas investments and analyzes how those policies influence environmental outcomes in recipient countries. Policies governing domestic investments are analyzed in order to clarify inconsistencies between domestic and overseas policies. Key findings are that the Chinese government’s environmental policies governing domestic investments are more stringent than those governing overseas investments. Chinese environmental overseas investment policies are mostly voluntary in nature so long as firms comply with host country regulations. Disclosure and transparency of information about China’s investments is opaque. Even if there is a failure to comply with host country regulations, there do not appear to be serious enforcement consequences. Finally, China encourages overseas investments in clean energy as well as exploration and development of higher carbon industries and fails to specifically restrict or prohibit investment in carbon‐intensive and fossil fuel industries in its overseas investments, revealing a discrepancy between policy for domestic and overseas investment.

Suggested Citation

  • Kelly Sims Gallagher & Qi Qi, 2021. "Chinese Overseas Investment Policy: Implications for Climate Change," Global Policy, London School of Economics and Political Science, vol. 12(3), pages 260-272, May.
    • Handle: RePEc:bla:glopol:v:12:y:2021:i:3:p:260-272
    DOI: 10.1111/1758-5899.12952
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1758-5899.12952
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1758-5899.12952?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Tancrède Voituriez & Wang Yao & Mathias Lund Larsen, 2019. "Revising the ‘host country standard’ principle: a step for China to align its overseas investment with the Paris Agreement," Climate Policy, Taylor & Francis Journals, vol. 19(10), pages 1205-1210, November.
    2. Tancrède Voituriez & Wang Yao & Mathias Lund Larsen, 2019. "Revising the ‘host country standard’ principle: a step for China to align its overseas investment with the Paris Agreement," Post-Print hal-02567887, HAL.
    3. Hensengerth, Oliver, 2018. "South-South technology transfer: Who benefits? A case study of the Chinese-built Bui dam in Ghana," Energy Policy, Elsevier, vol. 114(C), pages 499-507.
    4. Joel Backaler, 2014. "China Goes West," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-29393-0.
    5. Frederick van der Ploeg & Armon Rezai, 2020. "Stranded Assets in the Transition to a Carbon-Free Economy," Annual Review of Resource Economics, Annual Reviews, vol. 12(1), pages 281-298, October.
    6. Kirchherr, Julian & Matthews, Nathanial, 2018. "Technology transfer in the hydropower industry: An analysis of Chinese dam developers’ undertakings in Europe and Latin America," Energy Policy, Elsevier, vol. 113(C), pages 546-558.
    7. Li, Zhongshu & Gallagher, Kevin P. & Mauzerall, Denise L., 2020. "China's global power: Estimating Chinese foreign direct investment in the electric power sector," Energy Policy, Elsevier, vol. 136(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ali Rıza Güngen, 2023. "New Multilateral Development Banks and Green Lending: Approaching Scalar Complexities in the Global South," Development and Change, International Institute of Social Studies, vol. 54(2), pages 251-279, March.
    2. Bhandary, Rishikesh Ram & Gallagher, Kelly Sims, 2022. "What drives Pakistan’s coal-fired power plant construction boom? Understanding the China-Pakistan Economic Corridor’s energy portfolio," World Development Perspectives, Elsevier, vol. 25(C).
    3. Mathias Lund Larsen, 2023. "Bottom-up market-facilitation and top-down market-steering: comparing and conceptualizing green finance approaches in the EU and China," Asia Europe Journal, Springer, vol. 21(1), pages 61-80, March.
    4. Mathias Lund Larsen & Tancrède Voituriez & Christoph Nedopil, 2023. "Chinese overseas development funds: An assessment of their sustainability approaches," Post-Print hal-04052167, HAL.
    5. Lin Ni & Lei Li & Xin Zhang & Huwei Wen, 2022. "Climate Policy and Foreign Direct Investment: Evidence from a Quasi-Experiment in Chinese Cities," Sustainability, MDPI, vol. 14(24), pages 1-19, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. Christoph Nedopil & Mathias Lund Larsen & Mengdi Yue & Yao Wang, 2022. "Prospects of the Multilateral Cooperation Center for Development Finance (MCDF) to catalyse infrastructure financing," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 9(1), pages 81-110, January.
    3. Mireille Chiroleu-Assouline & Mouez Fodha, 2023. "Debt, tax and environmental policy [Dette, taxe et politique environnementale]," Post-Print halshs-04181981, HAL.
    4. Mercy Berman DeMenno, 2023. "Environmental sustainability and financial stability: can macroprudential stress testing measure and mitigate climate-related systemic financial risk?," Journal of Banking Regulation, Palgrave Macmillan, vol. 24(4), pages 445-473, December.
    5. Ricardo Reboredo, 2021. "Disaggregating Development: A Critical Analysis of Sino-African Megaprojects," Progress in Development Studies, , vol. 21(1), pages 86-104, April.
    6. Cahen-Fourot, Louison & Campiglio, Emanuele & Godin, Antoine & Kemp-Benedict, Eric & Trsek, Stefan, 2021. "Capital stranding cascades: The impact of decarbonisation on productive asset utilisation," Energy Economics, Elsevier, vol. 103(C).
    7. Frederick Ploeg, 2021. "Carbon pricing under uncertainty," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(5), pages 1122-1142, October.
    8. Ajayi, V. & Pollitt, M .G., 2022. "Green growth and net zero policy in the UK: some conceptual and measurement issues," Cambridge Working Papers in Economics 2255, Faculty of Economics, University of Cambridge.
    9. Stefano Carattini & Garth Heutel & Givi Melkadze, 2023. "Climate Policy, Financial Frictions, and Transition Risk," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 778-794, December.
    10. van der Ploeg, Frederick, 2020. "Race to burn the last ton of carbon and the risk of stranded assets," European Journal of Political Economy, Elsevier, vol. 64(C).
    11. Schulhof, Vera & van Vuuren, Detlef & Kirchherr, Julian, 2022. "The Belt and Road Initiative (BRI): What Will it Look Like in the Future?," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    12. Tong, Tong & Chen, Xiaoyue & Singh, Tarlok & Li, Bin, 2022. "Corporate governance and the outward foreign direct investment: Firm-level evidence from China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 962-980.
    13. Wang, Kai-Hua & Su, Chi-Wei & Lobonţ, Oana-Ramona & Moldovan, Nicoleta-Claudia, 2020. "Chinese renewable energy industries’ boom and recession: Evidence from bubble detection procedure," Energy Policy, Elsevier, vol. 138(C).
    14. Ong, Ardvin Kester S. & Prasetyo, Yogi Tri & Kishimoto, Ryuichi T. & Mariñas, Klint Allen & Robas, Kirstien Paola E. & Nadlifatin, Reny & Persada, Satria Fadil & Kusonwattana, Poonyawat & Yuduang, Nat, 2023. "Determining factors affecting customer satisfaction of the national electric power company (MERALCO) during the COVID-19 pandemic in the Phillippines," Utilities Policy, Elsevier, vol. 80(C).
    15. Hansen, T.A., 2022. "Stranded assets and reduced profits: Analyzing the economic underpinnings of the fossil fuel industry's resistance to climate stabilization," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    16. Campiglio, Emanuele & Dietz, Simon & Venmans, Frank, 2022. "Optimal climate policy as if the transition matters," LSE Research Online Documents on Economics 117610, London School of Economics and Political Science, LSE Library.
    17. Angelika von Dulong, 2023. "Concentration of asset owners exposed to power sector stranded assets may trigger climate policy resistance," Nature Communications, Nature, vol. 14(1), pages 1-9, December.
    18. Kemfert, Claudia & Präger, Fabian & Braunger, Isabell & Hoffart, Franziska M. & Brauers, Hanna, 2022. "The expansion of natural gas infrastructure puts energy transitions at risk," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7, pages 582-587.
    19. Huang, Youxing & Yang, Yu, 2023. "Determinants of Chinese energy OFDI location decisions and entry failure risk: The roles of public diplomacy endeavors and firm investment strategies," Energy, Elsevier, vol. 267(C).
    20. Mehling, M. A., 2023. "Supply-Side crediting for accelerated decarbonization: A political economy perspective," Cambridge Working Papers in Economics 2346, Faculty of Economics, University of Cambridge.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:glopol:v:12:y:2021:i:3:p:260-272. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.