Pushing out or pulling in? The determinants of Chinese energy finance in developing countries

Zhongshu Li, Kevin Gallagher, Xu Chen, Jiahai Yuan, Denise L. Mauzerall

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

China is now one of the world's largest financiers and investors in the global electric power sector. While a number of important qualitative analyses have examined the determinants of Chinese energy finance, this paper deploys new data to perform the first econometric analysis to examine the determinants of Chinese overseas financing for electric power plants. Drawing on that earlier work, we examine a number of ‘push factors’ –incentives in China that facilitate investment abroad—and ‘pull factors’ –incentives in recipient countries that facilitate Chinese investment into their country. On the push side, we find that domestic overcapacity in China plays a key role in facilitating China's development finance in these plants. On the pull side, we find that the size of local demand for new power projects and the resource potential for electric power in recipient countries are significantly correlated with the size of Chinese financing. We also find existing Chinese involvement in past power projects likely facilitates new Chinese overseas financing.

Original languageEnglish (US)
Article number102441
JournalEnergy Research and Social Science
Volume86
DOIs
StatePublished - Apr 2022

All Science Journal Classification (ASJC) codes

  • Renewable Energy, Sustainability and the Environment
  • Nuclear Energy and Engineering
  • Fuel Technology
  • Energy Engineering and Power Technology
  • Social Sciences (miscellaneous)

Keywords

  • China
  • Climate change
  • Development
  • Overseas energy finance

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