China’s $220 billion capital injection turning Global South into clean tech hub

A transformative wave of capital flowing from China is fundamentally defining the map of global clean technology manufacturing. According to a new report by the Net Zero Industrial Policy Lab (NZIPL), since 2022 alone, overseas investments by Chinese firms have surged past $220 billion.

These investments have spanned across 54 countries and include sectors such as batteries, solar, wind, new energy vehicles (NEV) and green hydrogen. The scale of investments has surpassed the US Marshall Plan ($200 billion in current 2024 dollars) and, importantly, is strategically positioning the Global South within the global energy transition — with 75 per cent of these projects being located in emerging markets.

This analysis is based on the China Low Carbon Technology foreign direct investment (FDI) database, which catalogues 461 projects from 2011 to mid-2025. The database is hosted by NZIPL at Johns Hopkins University and the Global Development Policy Center at Boston University, and will be incorporated into a broader Global Low Carbon Technology FDI database in the coming year.

Unprecedented pace & scale

The report points towards a dramatic rise in Chinese overseas green technology investments beginning in 2022. Over 80 per cent of the total 461 projects tracked by the database were launched after 2022, accounting for over $210 billion — or 88 per cent of all pledged capital. A record 165 projects were announced in 2024 alone.

Further, there has been a rise of megaprojects, with over 60 ventures exceeding $1 billion each in committed investment. This indicates a move toward establishing deep-rooted, long-term and large-scale industrial assets of energy transition technologies in host countries. The report suggests that these megaprojects are likely to exert increasing economic, industrial and environmental impacts on local development. 

The investment strategy has evolved from its initial solar-focused approach to encompass the entire clean technology value chain. Battery materials manufacturing now represents the single largest investment category, with commitments exceeding $62 billion, underscoring China’s strategic priority to secure upstream supply chain control. These investments have been largely concentrated in Southeast Asia, but Chinese firms are also moving upstream in Latin America’s Lithium Triangle (Chile, Bolivia and Argentina). 

Other prominent sectors include battery manufacturing, where investments crossed $49 billion and are heavily concentrated in Europe, solar manufacturing with a portfolio of $57 billion spanning across 135 projects, and green hydrogen where investments reached $27 billion (with an average project size of around $2 billion) and were anchored in the Middle East and North Africa (MENA).

Both, EV manufacturing and wind projects show a balanced spread across geographies but exclude the United States, reflecting a cautionary strategy due to trade disruptions. 

The report categorises China’s investments motivations into three categories:

• Access to raw material inputs: Indonesia's nickel reserves have made it the top location for battery material processing.
• Access to host countries’ markets: Hungary attracts downstream battery production investments, reflecting its role as a key battery manufacturer in Europe.
• Access to third country markets: Morocco has emerged as a major investment hotspot, leveraging its duty-free access to the European Union market, while Southeast Asia benefits from its re-export hub status.

Evolving strategies & future implications

The initial rapid pace of investments is now giving way to more nuanced strategies as companies navigate an increasingly complex global environment. The data suggests a downward trend in new projects — with 68 projects announced in the first half of 2025, pointing towards a phase of consolidation and recalibration. 

Geopolitical concerns, particularly trade barriers and the threat of secondary sanctions, are actively reshaping investment flows. In response, a growing number of firms are pivoting towards ‘light-asset’ strategies, opting for technology licensing, contract manufacturing, and Original Equipment Manufacturer partnerships. This allows companies to safeguard their market access while limiting the fixed-asset exposure. As a result, headline construction numbers may falter even as commercial engagement expands.

For host governments, such heavy investment flows represent a major opportunity to attract green capital. However, according to the report, this will require providing tailored incentives to firms, leveraging resource endowments to anchor themselves in Chinese supply chains, and planning for the scale of infrastructure necessary to keep pace with large investments. International partners, too, will need to understand the dynamics of China’s outward manufacturing drive in order to respond with adequate trade policies, supply-chain resilience programmes and climate finance initiatives.