Beijing’s Belt and Road Initiative Funding Surges by 80 Percent Due to Net Zero Initiative
Chinese companies have been highly involved in the manufacturing of electric vehicles (EVs) and lithium batteries and have invested heavily in renewable energy products worldwide.
The global movement towards net zero has proven to be beneficial for Beijing’s Belt and Road Initiative (BRI). This global investment and lending program targets major projects worldwide. Despite facing intense scrutiny about its lending practices (debt-trap diplomacy), Chinese companies (state-owned and private) have poured a staggering US$50 billion into the BRI last year, an 80 percent increase from the previous year.
The greatest increase in investment has come from the green transition, with technology-related investment accounting for $8 billion of the BRI, particularly in the electric vehicle and lithium battery manufacturing sectors. This represents a significant growth of 1,046 percent between 2022 and 2023.
Notable investments include those from Zhejiang Hezhong, a Chinese EV brand, in car manufacturing in Thailand, and a major partnership between Zhejiang Huayou Cobalt, one of the world’s largest battery makers, and the South Korean company LG. Wind turbine manufacturer Goldwind is also working on a $36 million project in Brazil, set to generate 1,100 jobs.
Beijing Leverages Green Energy Supply Chain
Linked to technology investment, the “metals and mining” sector has also seen a major uptick in investment in the mining and processing of critical minerals such as lithium, nickel, cobalt, and graphite. The report recorded a 158 percent jump between 2022 and 2023, particularly in developing countries in Africa, South America, and parts of Asia.
Examples of this investment include CATL, the world’s largest battery manufacturer, acquiring a share in mining operations in Indonesia’s largest nickel producer, PT Aneka Tambang Tbk, Jiangxi Ganfeng’s investment in a Mali lithium mine, and projects in Zimbabwe and Saudi Arabia.
In fact, the top five largest (non-construction) companies investing in the BRI overall were all involved in renewable energies. China is estimated to control about 50 percent of the world’s processing of key minerals like lithium, nickel, cobalt, and graphite.
Which Regions is BRI Making Headway?
Africa has been the largest recipient of BRI investment, with $21.7 billion, followed by the Middle East at $15.8 billion. However, the Middle East still saw a 31 percent increase in investment growth compared to 2022. Countries with the largest BRI growth were South Korea (577 percent jump), Bolivia (493 percent), Namibia (457 percent), Tanzania (415 percent), and Uzbekistan (375 percent).
Saudi Arabia, Sri Lanka, Tanzania, and the United Arab Emirates were among the countries recording significant BRI investment activity.
