China ASEAN electricity cooperation shows an active trend

"China and ASEAN have been each other's largest trading partners and important investment partners for four consecutive years. In the rapid development of economic and trade cooperation between China and ASEAN, the cooperation in the power equipment manufacturing industry between the two sides has shown an active trend." Xu Ningning, Chairman of the RCEP Industry Cooperation Committee, recently stated at the 2024 China ASEAN Power Equipment Manufacturing Industry Cooperation Innovation Conference.

In terms of power investment, in 2023, the total amount of foreign direct investment by major Chinese power companies was 4.423 billion US dollars, involving a total of 34 projects. Among them, investment in ASEAN countries accounts for 19% of the total outward foreign direct investment, and the number of projects involved accounts for 26.5% of the total number of projects; In terms of foreign engineering contracting, in 2023, major Chinese power companies signed a total of 26.455 billion US dollars in new overseas engineering contracting contracts, involving 205 projects. Among them, the amount of newly signed project contracts in ASEAN countries accounted for 16.1% of the total contract amount, and the number of newly signed projects accounted for 26.8% of the total.

Xu Ningning explained that the close cooperation between China and ASEAN in the power industry is mainly due to the strong complementarity of industries between the two sides. The cost-effectiveness advantage of China's electricity products, power engineering projects, and power design projects is obvious, which meets the needs of ASEAN countries. Secondly, ASEAN is committed to economic growth and has a high demand for electricity, presenting many new business opportunities in the electricity industry. The third is for both sides to open up their markets to each other, and the trade tariffs on the vast majority of products, including power products, are zero. Fourthly, both parties have convenient transportation, a cooperative location advantage connected by mountains and rivers, convenient communication, and easy investment, trade, and business management for power enterprises. The fifth point is that Chinese enterprises can sell their electricity products to a wider international market by setting up factories in ASEAN and utilizing the international trade policies of ASEAN countries. Sixth, the cooperation between the power industry and its enterprises of both sides has a solid foundation. The governments of both sides have reached a series of consensus on electricity cooperation, such as the ongoing Five Year Action Plan for Lancang Mekong Cooperation (2023-2027), which proposes to strengthen communication on electricity planning among countries, jointly promote regional power grid construction, renovation and reconstruction, promote electricity interconnection and trade, and develop towards the establishment of a unified regional electricity market.

Currently, facing the challenges posed by global energy security and climate change, it is even more necessary to deepen cooperation and exchanges between China and ASEAN in the power industry. Pan Yuelong, the Chairman of the China Electricity Council, suggested that firstly, we should strengthen energy investment and capacity cooperation, comprehensively consider the resource advantages of ASEAN countries and the equipment, technology, management, and funding advantages of China's electricity, and improve the level of clean and sustainable development of energy and electricity in various countries. The second is to strengthen infrastructure interconnectivity, improve the facilitation level of energy and resource trade, and achieve optimized allocation of energy and electricity resources on a larger scale. The third is to strengthen mutual recognition and exchange of energy and electricity standards. Strengthen the research, formulation, exchange, translation, recognition, conversion, and promotion of standards, eliminate technical barriers, and provide technical support for the interconnection of power infrastructure and cooperation in power production capacity. The fourth is to strengthen cooperation in capacity building and talent training, promote the sharing of knowledge, skills, and experience, and inject new vitality into the sustainable development of the power industry.