Needles in a haystack: searching for opportunities for foreign investment in China‟s electricity sector

Abstract

Given the high degree of complexity of this immense and opaque market, it is already a difficult task just to attempt to achieve a basic understanding of the market. In order to identify opportunities for FDI, the paper dedicates most of its efforts on providing a broad overview of the relevant aspects of the market. First it shows the overall size, growth, and condition of the market‟s incredible size along with brief overviews of each major fuel source. Indirectly, this big picture overview seems to describe an ideal market for investment. Next, it describes the key domestic players who, given their immense power and influence, determine the market conditions based on their key motivations, many of which are in direct conflict with each other. Armed with this market overview, it then first shows how FDI has performed within these market conditions to date and then shows the many obstacles it faces today. It is here that the big picture opportunities wash away in a flood of market and cultural obstacles. The paper concludes by attempting to identify the few remaining niche opportunities.