Climate Policy Lab is pleased to present a new report by Kelly Sims Gallagher and Qi Qi on the policies governing China’s foreign direct investment. Please see our key findings in English and Chinese below.
Motivated by concerns about the climate implications of China’s overseas investments, this paper identifies and evaluates Chinese policies governing China’s foreign direct investment and focuses particularly on how those policies influence environmental outcomes in recipient countries. Policies governing domestic investments are also examined in order to clarify inconsistencies between domestic and overseas policies. A few key findings:
- While the governance system for overseas investment has matured in recent years, the policies governing the environmental dimensions of China’s FDI are still relatively weak and mostly voluntary in nature.
- The Chinese government has streamlined the overseas investments approval process and has shifted its emphasis to post-investment monitoring and supervision.
- Chinese firms and investors are mainly required to adhere to the environmental policies of the recipient countries.
- There are no policies specifically aimed at limiting emissions of climate-altering greenhouse gases.
- The environmental policies governing China’s overseas investments are not as strict as those governing domestic investments.
- The Chinese government’s go-out strategy and industrial policies in support of strategic industries could result in sustained green investments overseas since many of China’s strategic industries are, in fact, green.