Joe Biden and other world leaders launching the Global Biofuels Alliance at the G20 Summit in New Delhi, India, by Casa Rosada
China and the US: a Renewable Energy Battle in the Global South
In a move to significantly increase development financing “from all sources,” President Biden and other G20 leaders pledged to triple the world’s renewable energy capacity by 2030 last week. Most new investments into the global clean energy apparatus will go into emerging economies, in which China is currently the largest investor. Despite this impressive figure, the United States will need to do more to increase its renewable energy investment in the global south. If not, China will continue to take the lead in this critical sector, gaining strategic and military inroads in the process.
China’s Global Development and Belt and Road Initiatives have made China the leading renewable energy producer, supplier, and investor within emerging economies, comprising 80% of the world’s population and 70% of global GDP growth. In Ethiopia, China invested over $4 billion in green infrastructure projects from 2011 to 2018. In Kenya, China built the biggest wind farm in Africa on Lake Turkana, which now accounts for 15% of Kenya’s electric capacity. In Cambodia, China built and paid for seven dams that supply half of the country’s energy needs. China’s massive foreign direct investment, coupled with the sometimes difficult-to-meet standards of the World Bank and other Western lending mechanisms, have led to a growing number of countries seeing China as a more dependable partner than the US. China has proven that it can build renewable energy infrastructure in the far reaches of the globe, which for developing economies is a desirable offer when trying to leapfrog fossil fuels in favor of renewable energy.
China’s renewable energy ventures into the global south may not be as altruistic as they seem. The massive costs of these undertakings, amounting to $177 billion globally from China alone in the first half of 2023, strain the governments of these countries, causing emerging economies to take on unsustainable debt. The commercial-governmental enmeshment of infrastructure projects then sucks countries into China’s political orbit, enabling the Chinese Communist Party to take control of foreign infrastructure and use it to pursue military aims. From 2007 to 2015, Sri Lanka borrowed over $1 Billion from China to build Port Hambantota, a strategic deepwater port near Indian Ocean trading routes. As the Sri Lankan debt ballooned, the Chinese Communist Party instituted more severe terms for lending, eventually leading to a takeover of the port when they defaulted. Sri Lankan officials assert that intelligence and strategic considerations were part of the deal from the start, and in 2022, China docked a “scientific research vessel” at the port that security experts say has been used to track military satellites and missiles. The concentration of these infrastructure projects within key strategic areas in the Indo-Pacific and North Africa is no coincidence.
The saturation of emerging economies with Chinese technology and investment forces the US and its allies to operate under the predatory umbrella of Chinese state-owned enterprises (SOE), which design and operate Belt and Road Initiative projects. If emerging economies become accustomed to China’s public-private development model, the United States and its firms will have to work within this system in order to participate in these countries’ development initiatives. This makes it difficult for the United States and its partners to introduce and enforce ethical and democratic standards. China’s norm-setting in the global south may enable human rights abuses, such as the forced labor used to make polysilicon for solar panels—or the 102 other cases of environmental and labor abuses by Chinese-invested companies in renewable energy worldwide—to become normalized in the global renewable energy ecosystem.
The United States has not stood idly by while China has taken over. In 2019, it developed the “Blue Dot Network” as a Western alternative to the Belt and Road Initiative. At the G20 conference, President Biden announced a plan to strengthen the World Bank and the International Monetary Fund to help developing countries repay their debts, which could be a counter to China’s Belt and Road Initiative. Many African countries want to be adopted into the US umbrella and hope to work with the United States to develop democratic governments, demonstrating a demand for better alternatives. All the U.S. needs to do is step up, ideally under terms that don’t leave developing economies in the lurch.
The strategic advantage China will gain because of globalization of its renewable technology and expertise has thus far been mitigated by the prominent role the United States has played on the world stage. The path to global leadership in renewables isn’t easy, particularly for a country that remains fraught with climate denialism. If the Biden administration increases its renewable energy investments by 100%, this would still leave the US $38 billion short of China’s 2021 investment in renewable energy. However, if the United States doesn’t restore its reputation in the Global South, China will chart the future of emerging economies… and not for the better.
