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Center for American Progress

RELEASE: Increasing Opportunities for Chinese Direct Investment in Clean Energy
Press Release

RELEASE: Increasing Opportunities for Chinese Direct Investment in Clean Energy

Read the full analysis here.

Washington, D.C. — Today as President Obama prepares to deliver his State of the Union speech, expected to touch on ways that energy can be harnessed to move our economy forward, the Center for American Progress released “Increasing Opportunities for Chinese Direct Investment in U.S. Clean Energy.” This analysis outlines the opportunities and current problems in attracting Chinese direct investment and offers policy recommendations for how the United States can make the most of Chinese capital and knowledge in the clean energy sector while keeping our critical infrastructure secure.

Among China’s current U.S. direct investments, energy is a primary focus. Energy projects accounted for about 45 percent of total inward Chinese investments in 2012. Most of these energy investments, however, are minority-share fossil-fuel acquisitions by China’s state-owned energy companies. The China National Offshore Oil Corporation, for example, has invested more than $3 billion in U.S. shale gas fields since 2010, and the China Petroleum and Chemical Corporation, or Sinopec, has invested another $2.5 billion over the same time period. Comparatively, however, Chinese investment in clean energy is very low and therein lies an opportunity to leverage much-needed private-sector capital to stimulate our clean energy markets.

The problem is, however, that we do not have a good policy framework in place to encourage these investments. Some recommendations in this brief include:

  • President Obama should deliver a strong and clear message that the U.S. welcomes Chinese and other foreign firms to directly invest in the U.S. clean energy economy in his first meeting with new Chinese General Secretary Xi Jinping.
  • The United States should rank clean energy sectors by degree of national security concern and publicize that general ranking to help foreign firms more accurately gauge the CFIUS risks involved in specific investment projects.
  • The United States should do more to connect Chinese firms with the state and local governments that are willing and eager to provide good investment incentives for clean energy projects.

Many Chinese companies want to come to the United States, directly invest in this country, and create jobs here. That is exactly what our economy needs, particularly in sectors such as renewable energy generation that generally do not pose national security concerns and will require large amounts of investment capital to develop.

Read the full analysis here.

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