Abstract

Abstract

The People’s Republic of China (“China”) has become one of the major providers of capital, construction services, and equipment to the energy sectors of developing and emerging economies. It has contributed to the power systems as well as the oil and gas sectors in the countries of these regions. Chinese energy and energy infrastructure companies, largely stateowned, are active across the energy sector in most fuels and through diverse modalities.

This report analyses the construction services, equipment, and investments provided by Chinese energy and energy infrastructure companies in the power, coal, oil, and gas sectors in non-OECD emerging Asian countries. It uses an integrated approach to provide a fact-based quantitative overview across the energy sector that complements existing research efforts. It identifies the main Chinese stakeholders, highlights major trends, and analyses strategies and drivers.

Findings reveal that, while the construction services, equipment and investments provided by Chinese companies are significant, they supply only part of emerging Asian economies’ energy sector needs; their role remains relatively modest compared to those of other companies.

Highlights

•In non-Organisation for Economic Co-operation and Development (OECD) emerging Asian countries, Chinese companies will contribute to 15% (54 gigawatts) of power generation capacity additions over 2013-22.

•Emerging Asian economies supply a marginal portion of China’s oil but an increasing amount of its gas, despite China having recently rapidly expanded natural gas imports from other regions as well.

•Motivations for Chinese company involvement in the emerging Asia region are diverse: primarily business opportunities under the Belt and Road Initiative, but also greater energy security in some cases.

•In the power sector, Chinese energy companies are primarily contractors, providing construction services and supplying equipment. In oil and gas, Chinese companies are investors as well as contractors.

•Companies from China supply their main equipment both from China and from other countries, within a global value chain that offers opportunities to multiple participants.

•Contracted power generation projects and oil and gas investments of Chinese energy companies were worth USD 10.5 billion annually on average between 2013 and 2017.

•The scale of Chinese energy companies’ contracts and investments tends to be smaller in riskier countries, except when political ties with the country are strong. Meanwhile, there is no clear correlation between the scale of contracts and investments, and the amount of energy resources these countries supply to China.

•Among Chinese companies, overseas market involvement is undertaken mostly by the top state-owned enterprises (SOEs) for energy and their subsidiaries, while the role of increasingly dynamic private enterprises remains small. Most Chinese SOEs provide integrated services centred on turnkey project delivery.