Abstract:
China's global development finance is undergoing a major transformation. As domestic reforms and borrower debt risks rise, Chinese financial institutions are shifting how they finance projects abroad-especially in Africa, where they've long played a major role. This report explores how China is adapting its overseas finance to support green investment, particularly through co-financing models and international partnerships. We deploy innovative AI-driven methodology to identify 'green' investments in China's overseas co-financing, and social network analysis of co-financing relationships between Chinese and international financiers. Chinese financial institutions have backed over $180 billion in syndicated loans from 2013-2021, driven largely by state-owned commercial banks. However, we have yet to see a pivot to green investments, and existing projects are concentrated in higher-income markets. A mismatch persists between the commercially-driven nature of syndicated lending and the regions and sectors most in need of energy transition support. We identify a growing but distinct ecosystem supporting 'green' finance-driven by partnerships with MDBs, public development banks and DFIs, and multilateral co-financing funds. This reinforces the important role of concessional development finance in enabling 'green' investments. Green investments are also increasingly supported through non-development finance instruments, including FDI and green bond proceeds. Chinese banks can help bridge this gap, through building these regional partnerships. The future of China's development finance lies in more diversified, risk-sharing models that better align with global climate goals and local needs.