China will focus its overseas investment this year on mining and energy as part of Beijing’s signature Belt and Road initiative, benefiting the domestic economy as well as its overseas partners, according to a report by a university think tank.
The projects correspond to the next phase of the initiative, which seeks to facilitate cross-border trade by building infrastructure projects in Asia, Africa and Europe, Fudan University’s Center for Green Finance and Development said on Monday.
“The reasons appear to be economic – good opportunities for China in these technologies – political support for the green transition from China and many Belt and Road countries, as well as high demand for engagement in these sectors, driven by rising electricity needs and the rise of the need for transition minerals,” said author Christophe Nedopil Wang.
Chinese investors are watching Africa’s Mauritius as it goes green, trying to sweeten deals
Chinese investors are watching Africa’s Mauritius as it goes green, trying to sweeten deals
China is likely to continue mining and energy development through investment projects and construction contracts, Wang added.
He expects China to create “strange partnerships” with nations that are “politically tied” to Beijing, such as through previous Belt and Road projects.
Mining and oil deals will be “resource-backed”, according to the report, which was jointly researched by the Griffith Asia Institute in Australia.
The study added that batteries, pipelines, roads, railways and data centers are also likely to be on China’s agenda for the Belt and Road initiative.
06:32 a.m
The Chinese belt, one time, 10 years later
The Chinese belt, one time, 10 years later
China said it would prioritize “small and beautiful” projects with low investment and “sound economic, social and environmental benefits.”
Belt and Road projects have previously raised questions about environmental damage and debts owed to China by developing countries.
However, several countries in the Middle East and Central Asia have already turned to China to help transition to renewable energy sources.
‘Growth nothing to write home about’: 7 takeaways from China’s economic data
‘Growth nothing to write home about’: 7 takeaways from China’s economic data
It needs oil to power its factories, while lithium is used to make batteries for electric vehicles, a key growth sector.
China’s $7.9 billion in so-called energy-related commitments — including investment projects and construction contracts — to Belt and Road projects once last year were already “the greenest in absolute and relative terms,” the Center said for green finance and development.
Total commitments in Belt and Road projects stand at US$1.053 trillion by the end of 2023, the center said.
We also see an opportunity to invest in early shutdown of existing older coal projects
The report identified a “clear need” for investment in renewable energy to drive growth and support a “green transition” in China as well as in countries participating in the initiative.
The study predicts “tremendous opportunities” for deals in green energy, mining, mineral processing and electric vehicle and battery manufacturing.
“Investors in BRI projects in China and outside China should focus on smaller projects that are easier to finance and faster to implement, especially in infrastructure and energy investments, scalable solar and wind investments seem viable, as long as local conditions provide the appropriate networks to manage renewable energy supplies,” the report said.
“As energy costs for renewables fall, we also see an opportunity to invest in early decommissioning of existing older coal projects, which would be both economically and environmentally relevant.”
China discovers new oil field that could be a ‘rich oil and gas resource base’
China discovers new oil field that could be a ‘rich oil and gas resource base’
Commitments to mining technology through the Belt and Road Initiative rose 1,046 percent last year, the report added, while metals and mining rose 158 percent.
It said mining overtook transportation in 2023 to account for 21 percent of China’s overseas commitments.
“Chinese companies are investing heavily in metals and mining, which are particularly suited to the green transition, and batteries for electric vehicles,” the report said.
