How Chinese companies are expanding their global footprint

The record level of Chinese overseas power project completions in 2024 highlights the ongoing momentum of the Belt and Road (B&R) initiative – China’s global infrastructure development strategy to invest in more than 150 countries.  

Chinese companies might still have the largest share of projects in these developing markets, but there are still opportunities for non-Chinese companies.  

Read on to find out more or complete the box on the right to download a copy of our report Record Chinese overseas power project completions in 2024: How Chinese companies are expanding their global footprint. 

The need for power 

The B&R initiative continues to invest in developing markets, with Asia representing 70% of installed capacity and Africa following at 15%. The demand for power in Asia is the fastest growing in the world. This is driven by an increase in manufacturing, population wealth and the subsequent need for more electricity.  

Since the B&R was announced in 2013, Chinese companies have completed 369 overseas power projects totalling 156 GW of capacity.  

Within the top five markets (Pakistan, Indonesia, Vietnam, Saudi Arabia and Malaysia), solar and wind installations by Chinese companies rose from 33% in 2021 to 64% in 2024. By 2030, it is expected that this will increase to almost 80%. 

Between 2025 and 2035, end user power demand is expected to grow at 4% each year in Asia. In Vietnam and Bangladesh, this power demand could see growth almost double the average rate (6% in Vietnam and 8% in Bangladesh). 

Accelerating shift toward renewables 

For the past two years, over half of all new build projects across the B&R have been renewables. This shift towards renewables aligns with both China’s domestic energy transition goals and host countries prioritising renewable energies.  

Of the record 24 GW of newly installed projects in 2024, 52% used renewable energy technologies. This comprised 8 GW of solar installations (up from zero installations a decade ago) and 5 GW of hydro power.  

In the five years from 2013 to 2017, thermal power projects represented 72% but by 2024 it was down to only 48%. While fossil fuels continue to meet energy demand in some B&R countries, this is expected to change heading towards 2030 as more countries look to diversify their power mix.  

WoodMac forecasts 135 GW of new wind and solar installations in the top five B&R markets (Pakistan, Indonesia, Vietnam, Saudi Arabia and Malaysia) from 2025-2034, will need US$94 billion in investment. Of these, Saudi Arabia will be the largest wind and solar B&R market with 70 GW of new installations expected from 2025-2034, followed by Vietnam (22 GW) and Malaysia (21 GW). This presents significant opportunities for both Chinese and non-Chinese companies.  

However, there are challenges with integrating renewables to ageing grids and adapting to policy changes.  

Cleaner energy sources are being prioritised aligning with China’s ‘No new overseas coal power’ policy. 

Challenges ahead on B&R 

Competition, security concerns and the need for more battery storage capacity are growing challenges faced by Chinese companies in the B&R corridor. 

Storage: WoodMac forecasts an additional 2.2 GW of battery storage will be needed by 2030 in the top five markets to address curtailment risks. Curtailment will gradually ease as grids are reinforced and upgraded, but in the short to medium term, similar constraints are starting to be seen elsewhere. 

Security: Security issues in Pakistan are a serious concern for Chinese construction workers. This could have a detrimental impact on project implementation and operations. 

Policy changes: Evolving renewable energy policies and auctions in key markets need to reflect the pace of the market. For example, auctions in Malaysia limit the participation of foreign companies, and Vietnam is considering retroactively adjusting feed-in tariffs for renewable projects. This will put existing projects at risk. 

Competition: Regional and international developers are becoming more active. WoodMac expects that Chinese companies will still have the largest share of equipment and EPC contracts, but they will be competing with other global players to secure the best sites and to sign competitive purchase agreements for new projects.  

Opportunities for non-Chinese companies 

Although Chinese companies will continue to dominate infrastructure projects in many of the developing economies, WoodMac believes non-Chinese companies have a number of advantages.  

With more renewable energy projects being built, there is a need to access green financing expertise. Non-Chinese companies are in a better position to tap into more diverse capital funding and to build co-financing partnerships. They also lead the way in new and emerging technologies such as hydrogen, CCUS and AI integration. 

From an optics perspective, there is increasing local concern around an overreliance on Chinese companies. Incoming non-Chinese companies can help reduce local political resistance. Also, many local partners may prefer to deal with jurisdictions that have robust contract laws, are more transparent and have clear dispute resolutions systems in place. Unlike Chinese companies who prefer to import their own labour and supply chain, many non-Chinese companies put an emphasis on upskilling the local workforce and building the host country’s capacity. 

Learn more 

To read more about China’s EPC strategy and to download a complete copy of our report Record Chinese overseas power project completions in 2024: How Chinese companies are expanding their global footprint, simply fill out the form at the top right of the page.