Chinese companies are playing a pivotal role in driving the clean energy revolution across Southeast Asia, with investments in solar power, wind farms, and hydropower projects under initiatives like the Belt and Road Initiative (BRI). However, this surge in renewable energy investments is not without its contradictions. At the same time, China’s expanding presence in mining and heavy industry in the region is contributing to widespread pollution, health issues, and growing political tensions—putting the very environmental goals of its clean energy projects at risk.

In countries like Indonesia, Thailand, and Myanmar, Chinese firms are increasingly dominant in industries that extract and refine key minerals essential for green technologies, such as nickel, cobalt, and rare earth elements. These minerals are in high demand for electric vehicles, electronics, and renewable energy infrastructure, which are seen as vital to global efforts to combat climate change. However, while China’s investments in clean energy are seen as progressive, the environmental and social impact of its industrial operations in Southeast Asia tells a more complex story.

A Contradictory Role in Indonesia’s Nickel Industry

Indonesia, home to some of the world’s largest nickel reserves, has become a focal point for Chinese industrial activity. Chinese companies now control more than three-quarters of the country’s nickel refining capacity, a critical step in the production of electric vehicle batteries and other green technologies. However, this dominance has led to widespread environmental concerns. The Morowali Industrial Park, one of Indonesia’s largest nickel processing hubs, has seen repeated violations of environmental regulations, with reports of air and water contamination, deforestation, and poor working conditions.

As Chinese firms build more nickel refineries and processing plants across the country, protests by local communities are becoming increasingly common. Many residents cite the pollution and deteriorating environmental quality as major issues, leading to heightened political friction. The expansion of mining operations, which often prioritize production over environmental safeguards, poses a serious risk to local ecosystems and the health of nearby communities.

Polluted Waters in Thailand: A Legacy of Rare Earth Mining

In northern Thailand, another troubling environmental issue has emerged. Water samples from areas near the border with Myanmar have shown arsenic levels nearly five times higher than the safe drinking water standards. Local communities attribute the contamination to rare earth mining operations, many of which are connected to Chinese companies operating in neighboring Myanmar.

Rare earth elements, critical for electronics, solar panels, and wind turbines, are a key focus of Chinese industrial activity in Southeast Asia. While these operations contribute to global clean energy goals, they are also associated with significant environmental degradation, including soil and water pollution. The long-term health effects of exposure to heavy metals like arsenic can be severe, leading to chronic illnesses and even genetic damage that can persist across generations.

A Shifting Industrial Landscape

The expansion of Chinese investments in Southeast Asia’s industrial sector is not limited to mining. Many Chinese companies are relocating their polluting sectors—such as steel production, waste processing, and chemical manufacturing—from China to Southeast Asia, where environmental regulations are often less stringent. This shift is motivated by both the desire to avoid stricter regulations at home and the attraction of lower labor costs in the region.

While these industries create jobs and stimulate economic growth, they also exacerbate the region’s environmental challenges. The relocation of polluting industries to Southeast Asia means that countries like Vietnam, Thailand, and Indonesia are becoming hotspots for heavy industrial pollution, which can lead to serious air quality problems, toxic waste accumulation, and significant health risks for local populations.

A Delicate Balance Between Development and Sustainability

China’s dual role in Southeast Asia—investing in clean energy while expanding polluting industries—illustrates a delicate balancing act between economic growth and environmental sustainability. The region is rich in resources that are crucial to both traditional and green technologies, but the lack of robust environmental enforcement in many Southeast Asian countries means that rapid industrialization often comes at the expense of long-term ecological health.

As demand for minerals like nickel and rare earths continues to rise, particularly for the production of electric vehicles and renewable energy infrastructure, the region is facing increasing pressure to find a balance between economic development and environmental protection. For many Southeast Asian countries, the lure of foreign investment and economic growth is hard to resist. However, the long-term consequences of unchecked industrial growth could be devastating, with polluted rivers, degraded land, and toxic air affecting both human health and biodiversity.

Looking Ahead: Can China’s Clean Energy Goals Align With Environmental Responsibility?

As Southeast Asia continues to play a key role in the global clean energy transition, the region’s experience with Chinese industrial investment offers valuable lessons. While Chinese-backed solar farms, wind projects, and hydropower initiatives are helping to advance green energy solutions, the environmental costs of mining and heavy industry cannot be overlooked.

For true sustainability, the region will need to adopt stricter environmental regulations and ensure that Chinese companies operating in Southeast Asia adhere to higher standards of environmental and social responsibility. The intersection of clean energy investments and industrial pollution highlights a complex challenge for Southeast Asia as it navigates the competing demands of economic development, environmental preservation, and long-term ecological health. Only by addressing these challenges can the region hope to realize the full potential of clean energy without compromising its future.