Trump has cut global climate finance. China is more than happy to step in.
The Philippines, among the countries in Southeast Asia, has the most contentious relationship with China: It is embroiled in a protracted and high-stakes territorial dispute with Beijing in the South China Sea, and has accused Chinese state-sponsored groups of trying to interfere in this month’s midterm elections.
But these tensions, and associated national security concerns, have not stopped the Philippines from turning to China for the renewable energy infrastructure it needs for its development — not least because Chinese-made green tech is much cheaper than American and European offerings.
“The Chinese offer was so much lower than their European counterparts, so for us that was an awakening,” said Gerry P. Magbanua, president of Manila-based renewable power company Alternergy, recounting the bids he received to build two wind farms in the Philippines.
This was true even before Donald Trump took office. But Beijing’s effort to dominate Southeast Asia — both in green tech and as the regional superpower — has received a welcome boost from Trump’s decision to slash climate financing intended to propel the transition to renewable energy at the same time that he threatens the region with tariffs.
“China doesn’t need to do anything to win,” said Samantha Custer, director of policy analysis at AidData, a research group at William & Mary, a university in Virginia. Beijing has persistently tried to “sow seeds of doubt that the U.S. is not a reliable economic and security partner, and unfortunately people are now seeing the U.S. reinforce those doubts,” Custer said.
Chinese leader Xi Jinping sought to capitalize on this last month when he traveled through Vietnam, Malaysia and Cambodia — which are facing American tariffs of 46, 47 and 49 percent, respectively — promising to deliver “green development” across the region through clean energy infrastructure deals.
Developing countries need massive amounts of renewable power if they hope to grow their economies without worsening climate change, and China is fast becoming their go-to supplier.
Chinese energy investment and construction deals in countries that have signed up to Xi’s signature trade and infrastructure policy, the Belt and Road Initiative, neared $40 billion last year and a record $11.8 billion of that went toward green energy, according to analysis from Griffith University in Australia.
Beijing is now using its green tech credentials to score points against climate-skeptic Trump. After Xi’s tour of Southeast Asia, China’s Ministry of Foreign Affairs declared that “some” countries — meaning the U.S. — are raising the costs of renewables for the world, while Beijing “works with all parties to use ‘green’ means to empower development.”
The Trump administration is trying to stop China from using Southeast Asia as a manufacturing and export hub for its green tech headed to the United States. Last month, the Department of Commerce imposed tariffs of up to 3,500 percent on Chinese solar panel manufacturers based in the three countries Xi visited, plus Thailand, after ruling they were receiving subsidies from the Chinese government.
Trump had earlier slashed international climate finance, which increased during the Biden administration from $1.5 billion in 2021 to $11 billion in 2024, and he has effectively ended the U.S. Agency for International Development’s work promoting renewable energy in the developing world.
“If the United States is not an alternative, then there will be no choice for countries in the region other than greater interdependence and greater integration” with China, said a former senior USAID official, who spoke on the condition of anonymity to discuss a sensitive policy debate.
Instead of trying to match China in spending, USAID had been working with other U.S. agencies to build transparent markets, attract diverse investment and encourage fair competition. The goal, officials said, was to “crowd in” support from international institutions and other developed countries so that China wasn’t the only provider of renewable energy in the Global South.
The end of American development assistance for green tech “leaves the field completely uncontested” for China, the former official said.
The State Department said Beijing used its Belt and Road Initiative to advance its political agenda abroad. “We will work with partner nations so they can make informed decisions about their interactions with China,” a spokesperson said on customary condition of anonymity.
The change in the United States’ approach worsens the conundrum facing countries like the Philippines.
An archipelago with a long coastline regularly battered by tropical typhoons, floods and landslides, it faces heightened risk from intensifying extreme weather.
But President Ferdinand Marcos Jr.’s administration has become increasingly concerned that reliance on Beijing could evolve into a national security vulnerability as it tries to raise the share of renewable energy from 22 percent now to 35 percent in 2035.
Spiking tensions with Beijing over disputed islands have revived a controversy here over a Chinese state-owned company owning a 40 percent stake in the national power grid. Chinese-backed hydropower dams have also been scrutinized over allegations that contracts favor the Chinese partners.
Filipino lawmaker Joey Salceda, chairman of the House Committee on Ways and Means, alleged at a hearing in January that the State Grid Corporation of China had extended its control beyond what is legally allowed and urged an investigation.
“Definitely national security is an issue here,” Salceda told local media at the time.
That wariness has stalled some infrastructure deals signed with China under Marcos’s predecessor, Rodrigo Duterte, but Chinese companies remain involved in many renewable power projects.
Filipino Sen. Win Gatchalian, who pushed for cybersecurity audits of Chinese-backed electricity transmission lines as chairman of the Energy Committee from 2016 to 2022, has suggested the geopolitical tensions should shut China out of such projects.
But even he admits Chinese suppliers are still essential for the installation of solar panels and wind turbines. “We have no choice but to buy our solar panels from China,” Gatchalian said. “They’re the cheapest in the world.”
Politicians in the Philippines had been banking on the U.S. and its allies to compete to prevent Chinese firms from developing a stranglehold over local energy systems. USAID helped set up renewable energy auctions and an energy security program launched in 2021 that aimed to attract $750 million in private sector investment.
As important as financing was U.S. officials’ work with the Philippines government on matters of policy and planning, including helping to map out “competitive renewable energy zones” of where to place wind farms, solar panels and transmission lines to make projects economically attractive while achieving renewable energy targets.
That project was seen as a global model for how to work with a U.S. partner to make renewable energy commercially attractive, said Jennifer Schuch-Page of the Asia Group, a strategic advisory firm based in Washington.
“Besides the actual capacity building that USAID did, that work was an important part of U.S. soft power and public diplomacy,” said Schuch-Page, who was a senior climate official in the Biden administration. “Withdrawal of that inevitably gives China a leg up.”
The United States might have helped chart the Philippines’s path to sustainable power, but Chinese companies are bringing it to fruition.
The wind farms that Alternergy is now building use 8 megawatt turbines made by Shanghai-based Envision, and they will be the largest installed in the Philippines.
The delivery of the turbines last month marks a milestone in the Chinese private company’s ambitious expansion beyond China.
“We can see that they are really ramping up not just in the Philippine market but other international markets as well,” Magbanua said in an interview. “They wanted to come in big [and lead] the charge of Chinese manufacturers here.”
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