Hidden dragon: China’s evolving relationship with the European renewable energy industry

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Cross-border investment and mergers and acquisitions (M&A) between China and Europe in the clean energy sector was quiet in 2013. During the first three quarters of 2013, Chinese companies and investors announced two acquisitions of European clean energy assets (value undisclosed), which is significantly below the 13 acquisitions valued at $510m (£313m) that were announced in 2012.

There are good reasons for this. Many Chinese investors have been deterred from investing due to a mixture of subsidy cuts, uncertainty over political support for renewable energy and, in certain cases, lengthy delays in rolling out incentive schemes.

This is particularly evident in Central and Eastern Europe where some countries, such as the Czech Republic, have introduced retroactive cuts to renewable energy subsidies. Only 22 per cent of surveyed Chinese investors are targeting Central and Eastern Europe and Russia for acquisitions and/or investments in the next 18 months. This compares with 48 per cent two years ago…

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