Economic Brief on PRC OFDI

Feb 2023; CAREC Institute, CAREC Institute

The CAREC Institute’s new economic brief paints a picture of the PRC’s Outward Foreign Direct Investment (OFDI) flows to the CAREC region as part of the PRC’s OFDI to the Belt and Road Initiative (BRI) region. It finds that the CAREC region received rather limited OFDI from the PRC, as contractual cooperation was the most popular entry mode for Chinese enterprises to do businesses in the region. Energy, particularly hydrocarbons, still dominated the PRC’s overseas engagement in the region. Pakistan was the largest recipient of the PRC’s engagement in the CAREC member economies both in non-renewables and in renewables.

The economic brief concludes that to fulfill their nationally determined contributions (NDC/INDC) targets for the reduction of greenhouse gases the CAREC member economies must accelerate the replacement of non-renewable energy by renewables and that such a transition can be materialized only by tightened cooperation and coordination between the CAREC member economies. In this regard, the PRC’s strong resolve to build a green BRI underpinned by its supportive policies, cooperation initiatives and advancement in green finance could serve as a catalyst to promote the green agenda of the CAREC region to benefit all.

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