China’s overseas investment in renewable energy projects jumped last year by 60 percent to a record US$32 billion, marking its leadership in the global market for clean energy, a report said on Friday.
Last year, China finalized 11 foreign deals worth more than US$1 billion each and is expected to pick up the pace this year, according to the Institute for Energy Economics and Financial Analysis (IEEFA).
On Thursday last week, China announced that it would sink at least US$361 billion into “renewable” energy resources by 2020, key to the country’s transition away from polluting coal power.
“Renewable energy will be the pillar for China’s energy structure transition,” Chinese National Energy Administration deputy head Li Yangzhe (李仰哲) said, Xinhua news agency reported.
Overseas investments last year ranged from lithium battery makers in Australia and Chile to an electricity distribution deal in Brazil and the building of a solar cell factory in Vietnam.
China now owns five of the six largest solar module manufacturing firms in the world, according to the report.
On the domestic front, the world’s second-largest economy had already emerged as a “renewables” powerhouse, outstripping the US.
China poured more than US$100 billion in domestic renewable energy — wind, solar, hydro — and related sectors in 2015, more than double the US investment, according Bloomberg New Energy Finance.
“The US is already slipping well behind China in the race to secure a larger share of the booming clean energy market,” IEEFA director Tim Buckley said in a statement. “With the incoming [US] administration talking up coal and gas, prospective domestic policy changes don’t bode well.”
US president-elect Donald Trump has vowed to restore the US’ flagging coal industry and has appointed several fossil fuel executives and lobbyists to key posts in his administration.
China’s emerging dominance of the clean energy sector also extends to jobs.
The International Energy Agency (IEA) estimates that China holds 3.5 million of the 8.1 million “renewable” energy jobs globally, compared with less than 800,000 in the US.
The Chinese National Energy Administration said the nation’s “renewables” sector would generate at least 13 million jobs by 2020.
Frankfurt School of Finance and Management professor Ulf Moslener said that China has emerged as “the world leader on renewable energy,” with clear advantages over rich-nation competitors, such as the US and Germany.
“Standard solar modules are no longer rocket science,” he said. “It will be really hard to compete with China on the cost side.”
The same applies to wind energy.
However, US and European entrepreneurs “should still have an advantage” when it comes to high tech, he added, pointing to thin-film solar and cutting-edge engineering services as examples.
Last year, China boosted its overseas influence by establishing the Asia Infrastructure Investment Bank.
It is also funneling billions of dollars into the New Development Bank, set up by the BRICS nations, Brazil, Russia, India, China and South Africa. All the bank’s initial loans were for “renewable” energy projects.
Add in its established overseas investment banks and “China is clearly building the financial capacity to drive global mergers and acquisitions,” the report said.
In 2015, China overtook the US as the largest market for electric vehicles and today two Chinese firms — BYD Auto Co Ltd (比亞迪汽車) and battery maker Contemporary Amperex Technology Ltd (寧德時代新能源) — are challenging Tesla Motors Inc for leadership of the sector.
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