China's investments in energy production overseas have been increasing under its ambitious OBOR scheme. According to an analysis published in the Yale School of Forestry & Environmental Studies, China has invested $160 billion in overseas energy projects through its development banks since 2000. What is important to note here is that the majority of these projects have not been renewable energy-based. An interesting statistic for a country leading the world in the sector.
In the prime years of its push for clean energy - between 2014 and 2017 - one of the major financial backers of the OBOR initiative, the Silk Road Fund, invested 93% in fossil fuels in the energy sector, according to a joint report by World Resources Institute and Global Development Policy Center.
There is a clear imbalance in China's renewable energy agenda at home and their agenda overseas. Beijing based climate expert, Alvin Lin argues that "this is a result of two factors." Although Lin insists that the "host country policy" still tend to favour coal power over renewables, he agrees that "Chinese financing institutions and companies tend to view coal power projects as lower risk and easier to finance than renewables projects."
This can be further explained with Chinese development banks, which have rich experience in the financing of renewable energy projects at home. For overseas projects, there is a noticeable difference, however. According to the World Resources Institute and Global Development Policy Center, developing countries also have a high need for financing renewable energy projects. But in total, between 2014 and 2017, the six Chinese development banks have financed less than 1% of the annual investment needed in renewable energy in the region.
Thus, it is not the "goal" of the Chinese state to fund clean projects worldwide to improve climate conditions. And why would it be? Numerous sources indicate that the falling prices of electricity from renewable technology since 2010 have caused investments in renewable technology to be driven by "competitive business models and profit motives". A further predicted fall in electricity prices by 2020 according to the latest report published by the International Renewable Energy Agency cements this observation.
Moreover, China's competitive patent registration should be seen as a profit-oriented venture investing in innovation from a perspective of commercial advantage in the future. As Lauri Myllyvirta puts it, "along with curbing its own pollution at home, China's investment in renewable technology makes total business sense. Because it puts it at the forefront of climate solutions when everyone in the future would require their expertise." This can be substantiated further with Lawrence Nord's book from 2011 on investment by pharmaceutical companies in research and development. He concluded, that investment in innovation and getting patents, gives parties "a temporary monopoly over the market, which provides excess profits."
Another important dimension regarding China not wanting to export its renewable technology abroad is the loss that its domestic coal power plants have suffered at home. This is due to China shooting past the national energy demands and also an upsurge of clean energy availability. Not surprisingly, nearly 50% of China's coal power plants faced net financial loss in 2018.
As predicted in numerous studies, coal technology to generate energy, although far from extinction, is coming to its timely end, being 'phased out'. Many coal power plants with high emission rates are potentially going to be obsolete in the coming decades. This puts China's highly sophisticated and leading heavy engineering companies at risk.
"It is true that the price of renewables is falling. Even in South East Asia where coal is abundant, coal is projected to be uncompetitive in less than a decade. This means that coal-fired power plants face the threat of being stranded assets in the near future," argues professor Kevin Gallagher, who also co-directs Global Economic Governance Initiative in Boston.
China's low drive to export its renewable technology has a lot to do with its coal technology companies racing against time to make profits. The coal industry is in direct competition with increasingly cheaper renewable technology, which is any developing country's first choice for meeting their energy needs. This is especially true since the majority of all countries signed the Paris Climate Agreement. This has direct consequences for China's economy that is heavily dependent on the export of fossil fuel power.
With China's visible double standards regarding renewable energy use at home and abroad, it is important to understand that the global repercussions of climate change remain not just constant but worsening. A report from the Intergovernmental Panel on Climate Change in 2013 found that "taken as a whole, the evidence indicates that the damage due to climate change is likely to be significant and to increase over time."