China has injected over $80bn in foreign direct investment (FDI) into low-carbon technologies abroad in the past twelve months, according to multiple sector-specific databases. Since early 2023, the total has exceeded $180bn, marking a sharp acceleration from the previous wave estimated at around $100bn over a similar period. This trend signals an explicit intent to transfer entire industrial chains beyond Chinese territory.
Industrial momentum and geopolitical arbitrage
Chinese cleantech FDI is concentrated in non-Western jurisdictions, with a strong presence in Southeast Asia, the Middle East, Africa, and Latin America. These locations allow circumvention of tariff barriers imposed by the United States and the European Union while absorbing the surplus from structural overcapacity, particularly in photovoltaic and storage sectors. Approximately 75% of current Chinese low-carbon FDI stock is located in the Global South.
The strategy relies on integrated projects combining mining, refining, manufacturing, and sometimes recycling. Contemporary Amperex Technology Co. Limited (CATL) has launched a $6bn project in Indonesia spanning the entire nickel battery value chain, while LONGi Green Energy Technology Co. Ltd is investing alongside APPL Hydrogen in a €7.6bn solar and hydrogen infrastructure project in Nigeria.
Contract structures and market pressure
Contracts linked to these projects often combine upfront industrial capex and long-term power purchase agreements (PPAs), ensuring stable revenue streams for Chinese suppliers and securing export volumes for host countries. This approach also facilitates the export of complete industrial ecosystems, which are difficult to dismantle or replace.
Global prices for solar modules and some battery technologies remain under downward pressure due to this outsourced overcapacity. This pricing dynamic weakens non-Chinese producers and pushes offshore developers to seek public support mechanisms to remain competitive.
Regulatory framework and legal risks
US authorities have listed CATL among Chinese companies deemed to have military ties, while the European Union has launched an investigation into LONGi under the Foreign Subsidies Regulation. Though these measures do not directly halt overseas projects, they raise the risk of secondary sanctions for involved partners.
Compliance clauses and supply chain rerouting mechanisms are now standard in contracts to limit exposure to extraterritorial sanctions. Companies co-investing in these ventures must adapt governance frameworks to mitigate risks of financial restrictions, trade barriers, or regulatory scrutiny.
Industrial realignment and lasting dependencies
China’s strategy is building durable technical and financial dependencies with countries across the Global South. This “greening” of the Belt and Road Initiative results in a reconfiguration of the industrial geopolitics of energy. Oil-producing states such as those in the Gulf and Nigeria are integrating these technologies into their diversification plans while maintaining hydrocarbon flows to the West.
Non-Chinese developers face increasing competition from integrated cleantech + finance offers backed by Chinese capital. In targeted regions, these projects are reshaping market structures, relocating industrial gravity centres, and making alternative supply chain emergence more difficult.
