It is difficult to assess accurately just how much foreign investment and expertise is finding its way into reducing Chinese emissions. However, three observations suggest it is expanding at a rapid pace.
First, there are early signs that foreign direct investment (FDI) in China is undergoing a structural transformation away from energy-intensive and polluting industries. This follows amendment of the Guidance Catalogue for Overseas Investment Industries in December last year to encourage foreign investors to participate in "cleantech" enterprises such as recycling, renewable energy and energy efficiency.
Second, domestic cleantech investment is growing strongly. According to Cleantech China, a for-profit industry association, cleantech venture capital in China grew to over $550 million in 2007, up from $400 million in 2006 and $170 million in 2005. Cleantech China expects the figure will reach $720 million in 2008. Best estimates place the amount of capital going into China’s mainstream renewable energy capacity including solar, hydro, biomass and wind - at $10 billion in 2007, around 20% of total world investment.
And finally, there is an increasing stock of anecdotal examples that point to a leading role for foreigners in the transfer of low emissions technologies to China.
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It is difficult to assess accurately just how much foreign investment and expertise is finding its way into reducing Chinese emissions. However, three observations suggest it is expanding at a rapid pace.
