China’s Leading Green Tech Companies Invest $210 Billion Overseas, Navigating Opportunities and Challenges

Xiaokang Xue, a researcher at the Net Zero Industrial Policy Lab and one of the report’s authors, commented that China is no longer exporting its green products but is undergoing a structural transition to internationalise its green manufacturing capacity and value chains by building factories globally.

China’s leading companies in solar energy, batteries, and electric cars have sharply increased their foreign investment plans in recent years, committing more than $210 billion since 2022, according to recent research.

Chinese companies are expanding their supply chains internationally to capture new markets, avoid tariffs, and get closer access to raw materials, as stated in a report from Johns Hopkins University’s Net Zero Industrial Policy Lab.

Researchers from this lab and Brown University have identified over 460 international green manufacturing projects announced by Chinese companies since 2011. More than 80% of these projects were announced after 2022.

As the US President Donald Trump administration dismantles the green project policies put in place by the previous government and Europe faces regulatory challenges, China has taken this change to become a key player in the global energy transition.

China’s investment in leading clean technology has lowered costs both at home and abroad. However, some countries  were worried about relying too much on China, as well as about environmental and labour conditions at some overseas sites.

Xiaokang Xue, a researcher at the Net Zero Industrial Policy Lab and one of the report’s authors, commented that China is no longer exporting its green products but is undergoing a structural transition to internationalize its green manufacturing capacity and value chains by building factories globally.

Major companies, such as Contemporary Amperex Technology Co. Ltd. (CATL), BYD, and Trina Solar Co., have announced plans to invest billions in factories abroad in more than 50 countries.

Even though some of the announced projects may be abandoned before the shovel hits the ground, the total amount invested has already exceeded the inflation-adjusted equivalent of the Marshall Plan that the US used to help Europe’s reconstruction after World War II, noted Mathias Larsen, another researcher from Brown University involved in the report.

The study showed that Indonesia had the highest capital, with a focus on battery materials like nickel and solar initiatives. 
Morocco has also received investments in battery materials and green hydrogen, as it boasts abundant natural phosphate resources and is strategically located near Europe. Countries in the Middle East are attracting funding for solar module and electrolyzer facilities, supported by sovereign offtake deals.

In the United States, investors are focusing on the solar supply chain and lithium-ion battery manufacturing plants, as the domestic market is protected by tariffs and incentives from the Inflation Reduction Act. 
The researchers highlighted that changes have been made to the IRA tax credit regulations, and policy uncertainty may postpone or delay some of the announced projects.

The number of projects that were announced earlier is likely to plateau, staying below the 2024 peak, as companies review their plans and try to manage geopolitical risks, the researchers said.

Over time, companies have changed where they invest and what they focus on. Southeast Asia, which was once the primary destination, has seen its share decline, while investments in the Middle East and North Africa have increased from nearly nothing to 20% of the total last year, according to the researchers. Before 2021, most of the investors focused their funds on solar energy; now, investments are more evenly distributed across various sectors, including batteries, electric vehicles, and green hydrogen. But not everyone likes this expansion.

US lawmakers have created barriers for companies linked to China. Local communities in countries such as Indonesia and the Democratic Republic of the Congo have expressed concerns about ecological degradation, inadequate labor protections, and unsafe working conditions. These issues are further complicated by language barriers.

As Chinese companies plan to expand globally, countries must come up with a plan, secure funding, and implement green industrial policies, while also negotiating hard with Chinese firms to reach their sustainable development goals, according to Tim Sahay, co-director of the Net Zero Industrial Policy Lab.