Gary Sands

The View | How China’s Belt and Road Initiative could lead Vietnam away from renewable energy and towards coal

Even as China turns away from coal-fired power domestically, its financial institutions continue to fund coal plants overseas, including in countries like Vietnam, which have great potential for wind and solar power generation

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A a child on a Saigon waterbus brandishes a pinwheel as he passes Landmark 81, Vietnam’s tallest building, in Ho Chi Minh City on June 6. While Vietnam has enormous potential for wind and solar power generation, funding for coal-power electricity plants under China’s Belt and Road Initiative could derail its renewable energy push. Photo: Reuters

Gary Sands

Published: 4:00pm, 11 Jun 2019Updated: 10:29pm, 11 Jun 2019

Since its unveiling in 2013, Chinese President Xi Jinping’s US$1 trillion global infrastructure Belt and Road Initiative has struggled to deflect mounting criticism over its lack of transparency, fuelling of corruption, wasteful spending, over-reliance on Chinese contractors and poor quality standards.

More recent criticism has focused on allegations of “debt-trap diplomacy”, of using the initiative to load debt on to poor countries which then struggle to repay, ultimately forcing them to hand over control of strategic economic and military assets, such as ports, railways and power plants, to China in lieu of payment.

One criticism of the initiative which needs far more attention concerns its environmental consequences, particularly emanating from the power sector. As Beijing continues to shut down its domestic coal-fired power plants and shift towards cleaner renewable energy sources, its energy companies are looking overseas for profits, bringing promises of Belt and Road Initiative funding to lesser-developed countries and helping those governments build coal-fired power plants.

Should these promises be met, those poorer countries could account for some 50 per cent of global emissions by 2050, according to a forthcoming report by Tsinghua University in Beijing.

Chinese President Xi Jinping is keenly aware of the environmental concerns surrounding his signature initiative and attempted to allay those fears at a forum held in April, declaring the Belt and Road “aims to promote green development”. Despite the fine words and the country’s credentials as a leader in renewable energy, it appears Xi’s pledge to support green development does not currently rule out ongoing support for dirty power.