China Ranks 4th in Global Energy Investment

Research conducted by Built Asset Consultancy, EC Harris, has China number 4 out of 10 in a comparison of individual country’s energy policies and business environments for foreigners wanting to enter the fossil fuel and renewable energy sectors. They were ranked behind USA, France, and Germany, respectively.

The 4th placed ranking of its openness to foreign investors is a reflection of “the slow implementation of legislation and financial incentives to support foreign investments,” said Paul Stapleton, head of Energy at EC Harris.

With their greatest appeal to investors in all energy segments being their size, investors still have to “contend with a risky operating environment, patchy legislation implementation, and a few financial incentives outside of the renewable segment”, commented Stapleton.

China is the world’s leading investor in renewable energy products, spending up to $160 billion from 2007 to 2010.

Stapleton further noted that despite attracting investments, China might also become a leader in exporting renewable technology.

In further EC Harris research, China ranked 6th out of 10 in the nuclear power sector. Its 11 nuclear reactors will be a fifth of what they are currently planning or constructing, which may lead to an even additional 67 plants.

The foreign involvement in both sectors (nuclear and fossil fuels) is limited to joint ventures with local companies, while Chinese entities control facilities, projects and contracts, the research noted.

With China yet to reveal their new 5-year plan regarding policies such as carbon emissions, cautious investors may wait to get a better sense of their future plans.

Meanwhile, the investment outlook is significantly bullish for countries and companies that export energy resources to China as the country struggles to meet demand from domestic resources. Of particular note is Russia’s recent $6 billion deal to supply 475 million tonnes of coal to China over the next 25 years.

China’s insatiable hunger for natural resources is also putting strains on global supplies of building metals.