China's promotion of overseas green projects: Old models and new dynamics

Over the past 15 years, green industries have developed rapidly in China, and with an increasingly saturated domestic market, Chinese companies have intensified their search for overseas markets. The Chinese government is supporting that pursuit under the Green Belt and Road Initiative. This report provides an overview of how China is promoting its green industries overseas; specifically, which models of co-operation are typically used in non-hydro renewable energy projects (mainly solar and wind) and what are the new dynamics compared with the traditional projects. The analysis is illustrated with examples of projects mainly in Africa, supplemented with examples in Southeast Asia.
This report finds that the old models of traditional BRI projects are also used in green energy projects and still give China some advantage in competing with Western countries for developing country markets. However, the old models need to adapt to the new realities both within China and outside — new geo-economic competition and demands from developing countries.
There are also new mixes of capital, technology, and labour in China’s overseas green expansion, brought about by new dynamics in the green industries. They are potential game-changing dynamics in global green transition, which can both enhance China’s competitiveness and enlarge room for co-operation between Chinese and Western companies that challenge geopolitical divides as well as local obstacles to green transition.
For developing countries, increased competition between development partners in green transition can create room for negotiation over the terms of development cooperation, especially if developing countries wish for fair terms in creating local employment, growth of local businesses, and technological advancement.