China’s foreign infrastructure push is greener than ever

It would be easy to frame this trajectory geopolitically: China’s dominance over the hardware needed for the global energy transition gives it an advantage over the US, even as Washington pulls back on its trade and climate commitments under President Donald Trump. Indeed, renewables’ growing importance in the BRI could help Beijing mitigate the uncertainty and risks brought by Trump’s aggressive trade policy.

Yet its core is more prosaic: Chinese companies’ global footprints reflect the industrial landscape inside China. As the “new three” — solar panels, batteries, and electric vehicles — have become a growth engine, those sectors also received the most attention under the BRI. An assessment by the New York-based Rhodium Group found that automotives, basic materials, and energy collectively accounted for an unprecedented 77% of Chinese companies’ foreign direct investment in 2024.

The BRI could also offer a glimpse at the future and pace of the energy transition in major developing economies.

The BRI’s top five markets — Pakistan, Indonesia, Vietnam, Saudi Arabia, and Malaysia — could see “substantial growth” in wind and solar projects over the next decade, according to Wood Mackenzie analysts. Saudi Arabia is set to have the greatest demand, with 41 GW of solar and 13 GW of wind power currently planned.

The expansion of renewables in the developing world is spurred by increasingly cheap solar as a result of rapid technological innovation — led by China, Alex Whitworth, head of Asia-Pacific power and renewables research at Wood Mackenzie, told me.

China’s Belt and Road Initiative has changed substantially since Xi first announced it in 2013, and its aims, to a large degree, depend on who you ask.

Chinese officials characterize the program — which now has more than 150 partner countries — as a push to revive the ancient Silk Road trading network by building infrastructure to connect Asia, Europe, and Africa. Analysts say it is an amorphous program with no official criteria that can include everything from private lenders catering to international investments to state-directed projects. Western critics say it is a play for Chinese influence in developing nations and in some cases a strategy to lock countries into China’s sphere of influence by loading them with debt, a claim that is widely disputed.

The changing nature of the BRI reflects a wider shift in China’s trade: The country’s exports and their destinations are “much more diversified” compared to 20 or even 10 years ago, said Marc Gronwald, an economist at the Xi’an Jiaotong-Liverpool University in Suzhou, China. In 2000, the country’s main trading partners were mostly richer economies, but in 2022, nations like Vietnam, Malaysia, and India joined that group, he said.

Chinese manufacturers have mostly shipped clean-tech products abroad as commodities rather than as part of a wider project, according to Lauri Myllyvirta, lead analyst of the Finland-based Centre for Research on Energy and Clean Air. In comparison, their role in foreign coal plants comprises financing, engineering, and operation of the facilities. But that has been changing since 2023, when Beijing instructed the BRI to shift away from mega infrastructure projects to “small but beautiful” ones, such as solar plants in Africa.

Myllyvirta’s analysis found that developing countries drove 70% of the growth in China’s exports of solar, wind turbines, and electric cars between 2021 and 2024, with Brazil being the largest market over the period.

Chinese manufacturers have increased building factories overseas, too — a push that will make the country’s renewable exports “more resilient,” said Myllyvirta.

“If there is an EV factory in Brazil or a solar factory in Vietnam employing local workforce, paying local taxes… then their policy makers will think twice before doing something that would completely jeopardize the business,” he said.

Fossil fuels are still prominent in the BRI and dwarf renewables in some aspects. The GFDC report showed that China’s oil and gas engagement last year jumped to $24.3 billion, more than double that of renewables. The increase may be partly driven by Beijing’s efforts to deepen ties with the Middle East, said Kate Logan from the Asia Society Policy Institute.

China is also still building some coal plants under the BRI; most were approved before Xi’s no-coal pledge. Chinese companies built 6GW of coal, and 6GW of gas and oil plants last year, Wood Mackenzie found. An additional 19 GW of coal power projects remain in the pipeline, but some of them could be canceled, it said.

Increasing renewables alone won’t be enough if China is to cement its position as a global leader in the energy transition, argued Yu Aiqun, an analyst at the Global Energy Monitor, a California-based NGO. “It will be more convincing if China gives up overseas investment on fossil fuels altogether,” she said.

Some researchers think China should tone down or simply do less BRI diplomacy in democratic countries if it wants its companies to succeed there. The more Beijing makes clean tech part of its BRI narrative, the greater the risk that these technologies will be associated with “China influence,” said Andrea Ghiselli, a lecturer at the University of Exeter who co-authored a recent paper arguing that view.