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China will focus its overseas investment on mining and energy this year as part of the Chinese government’s signature Belt and Road Initiative, benefiting the domestic economy and foreign partners, according to a report by a university think tank.
These projects fit into the next phase of efforts to facilitate cross-border trade by building infrastructure projects across Asia, Africa and Europe, the Fudan University Green Finance Development Center said on Monday. Ta.
“The reasons appear to be economic and political support for the green transition from China and many Belt and Road countries, as well as high demand for engagement in these areas due to increasing electricity demand and increasing transition needs.” minerals,” said author Christoph Nedpil Wang.
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China is likely to promote mining and energy development through investment projects and construction contracts, Wang added.
He expects China to form “national partnerships” with countries that are “politically aligned” with Beijing, such as through previous Belt and Road projects.
The report, co-authored by Australia’s Griffith Asia Institute, says mining and oil trade will become “resource-backed”.
The study added that batteries, pipelines, roads, railways and data centers are also likely to be on the agenda of China’s Belt and Road Initiative.
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China’s Belt and Road, 10 years
China’s Belt and Road, 10 years
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 developing countries’ debt to China.
However, several countries in the Middle East and Central Asia have already approached China to help them transition to renewable energy.
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Oil is needed to power factories, but lithium is used to produce batteries for electric vehicles, a major growth area.
China’s so-called energy-related engagements (including investment projects and construction contracts) under the Belt and Road Initiative last year are already among the “greenest in absolute and relative terms” said the Green Finance Development Center.
According to the center, the total value of involvement in Belt and Road projects reached US$1.53 trillion at the end of 2023.
We also see opportunities to invest in the early phase-out of existing older coal projects.
The report identified a “clear need” for renewable energy investment to boost growth and support a “green transition” in China and countries participating in the initiative.
The study predicts “significant opportunities” in deals related to green energy, mining, mineral processing, and electric vehicle and battery manufacturing.
“Investors in Belt and Belt projects within and outside of China are looking for smaller projects that are easier to finance and faster to execute, especially infrastructure and energy investments, and scalable as long as local conditions provide suitable transmission grids. “Addressing renewable energy supplies should focus on investing in solar and wind power to address renewable energy supplies,” the report said.
“With the energy costs of renewables falling, we believe there is an opportunity to invest in the early phase-out of existing older coal projects where it is both economically and environmentally sound.”
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Mining technology initiatives through the Belt and Road Initiative increased by 1,046% last year, while metals and mining increased by 158%, the report added.
According to the report, mining will surpass transportation in 2023, accounting for 21% of China’s overseas business.
“Chinese companies have strong investments in metals and mining, particularly with regard to the green transition and electric vehicle batteries,” the report said.
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