What's Happening?
Since early 2023, Chinese companies have committed over $180 billion to clean energy projects outside China, significantly impacting the energy and industrial sectors in the Global South. This investment includes major projects like Gotion's $5.6 billion battery
factory in Morocco and JA Solar's $564 million solar plant in Oman, along with hydrogen initiatives in Egypt and clean energy agreements in Nigeria. These efforts are part of a broader strategy to shift industrial power towards the Global South, aiming to accelerate global net-zero goals and establish sustainable energy systems. The investments cover complete supply chains, from mining to recycling, helping other countries build green power systems. China dominates new clean energy plants, controlling 80% of new solar, wind, battery, and hydrogen facilities worldwide from 2018 to 2024.
Why It's Important?
China's extensive investment in clean energy projects in the Global South is reshaping global energy and trade dynamics. By focusing on developing nations, China is not only helping these countries reduce energy costs and create jobs but also positioning itself as a leader in the global clean-tech supply chain. This strategy enhances China's influence in international energy markets and supports its geopolitical goals. The investments also contribute to global efforts to achieve net-zero emissions, providing a model for integrating industrial production with renewable energy. As a result, developing nations gain industrial capacity and technological know-how, while China secures a strong position in global supply chains.
What's Next?
The continuation of these investments is likely to further solidify China's role as a global leader in clean energy technology. Host nations will need to manage these projects carefully, enforcing local rules and building long-term capacity to maximize benefits. If successful, these initiatives could accelerate the transition to net-zero emissions and shift industrial power towards the Global South. The focus on technology sharing and joint ventures with local partners will be crucial in ensuring sustainable development and fostering economic growth in these regions.
