China’s main way of serving overseas markets is, by a wide margin, exports, but rising trade barriers may leave the country with little choice but to expand its investments in foreign countries’ clean tech manufacturing capacity.
Since 2014, China has announced $173 billion of FDI in clean technology sectors, but new data from Rhodium Group found that only around half of those commitments have materialized. Chinese investors have largely kept overseas manufacturing as an afterthought. The rise of trade barriers and localization requirements, however, have been gradually forcing Chinese firms to look abroad, outside of their historic pattern of foreign investments, which served to support the extraction of other countries’ resources. In solar PV, for example, Chinese firms moved into Cambodia, Malaysia, Thailand, and Vietnam to circumvent US and EU trade barriers; as those hubs drew scrutiny, investment shifted to Ethiopia and the Philippines.
