China's Cleantech Investments Exceed $100 Billion Overseas

Chinese firms have invested more than $100 billion in cleantech projects overseas since 2023. Concerns are raised about China's dominance in solar panels, lithium batteries, and electric vehicles. Tariffs imposed by the United States, Canada, and possibly the EU are encouraging Chinese companies to invest abroad.

Credit: UNSPLASH

This surge in overseas investments is the result of a strategic move to avoid tariffs imposed by the United States and other countries.

According to CEF, China is the world's leading producer and exporter of solar panels, lithium batteries, and electric vehicles, with unparalleled investment, innovation, and manufacturing capabilities. According to the research report, China is far ahead of the rest of the world in these sectors.

CEF's report revealed that China accounts for 32.5% of global electric vehicle exports, 24.1% of lithium batteries, and a staggering 78.1% of solar panels. However, concerns have been raised that China may use its massive production capacity to saturate markets, drive prices down, and undercut competitors.

The United States and Canada have already imposed 100% tariffs on electric vehicles manufactured in China, and the European Union is expected to vote on a similar measure this week. Furthermore, U.S. imports of Chinese solar panels and lithium batteries are subject to 50% and 25% tariffs, respectively.

Xuyang Dong, an analyst at CEF and co-author of the report, stated that Chinese private companies are primarily motivated by the need to navigate trade barriers. For example, leading electric vehicle manufacturer BYD is building a $1 billion plant in Turkey to avoid an expected 40% EU tariff, while battery maker CATL is planning facilities in Germany, Hungary, and other countries.

According to a study conducted by Britain's Grantham Institute, by 2030, approximately two-thirds of China's cleantech capacity will exceed domestic demand and seek export opportunities, with total solar production capacity expected to reach 860 GW.

China has expressed dissatisfaction with the tariff increases, claiming that restrictions on low-cost Chinese imports will impede global efforts to combat climate change. Senior Chinese climate envoy Liu Zhenmin warned in March that disengaging from Chinese manufacturing could increase global energy transition costs by 20%.

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• Chinese firms have invested over $100 billion in cleantech projects overseas since 2023.

• Concerns arise over China's dominance in solar panels, lithium batteries, and electric vehicles.

• Tariffs imposed by the U.S., Canada, and potentially the EU are driving Chinese companies to invest abroad.

Source: REUTERS