Inside China’s Global Spending Spree

Scott Cendrowski writes for Fortune:

CHI.12.15.16.opening starThe high-rise coastal city of Dubai plays host to all kinds of luxury oddities: indoor ski slopes, gold-bar vending machines, vast artificial archipelagoes shaped like palm trees. But six miles inland, something just as unusual, if far less gaudy, is taking shape—the first coal-fired power plant in the Middle East.

The United Arab Emirates, to which Dubai belongs, need to diversify their energy mix. By 2030, Dubai hopes to balance natural gas and solar and get 7% of its energy from coal. Its first step: a massive “clean coal” project. Workers broke ground in early November for a plant expected to be finished in 2023.

In this petroleum-dominated region, there isn’t much coal-power expertise. But that won’t be a problem for Dubai, thanks to help from unusual sources. The nearly $2 billion project is backed by $1.4 billion in funding from the Chinese government and banks and is being built by Chinese construction crews.

Why such largesse for an emirate swimming in oil wealth? Because Dubai is one of the nations China is targeting as part of One Belt, One Road, an ambitious foreign-investment project designed to boost China’s trade and diplomatic ties with more than 60 countries in the Middle East, Europe, and Africa. China is opening up its checkbook for this group of potential allies: It’s committing $1 trillion through the program in the next ­decade—and as much as $3 trillion over the long term—to huge infrastructure investments, in locations that stretch from China’s coast through the deserts of Xinjiang province and the steppes of Central Asia as far west as Spain and Scandinavia.

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