Early foreign investors retreat from energy sector

Despite rising investment in China's energy sector, foreign investors have been pulling out, accounting for less than 7% of overall sector investment currently, compared to 14.5% in 1997. A power analyst at China Guodian Corp told a Hangzhou forum that nearly all early foreign investors had pulled out, including Sithe Energies Inc, which last year sold its 40% stake in a Zhejiang coal-fired plant to China Resources Group. That sale was one of four plant disposals the others were in Guangdong, Hubei and Hebei provinces for Sithe over the years. The analyst blamed the retreat on the central government's decision to stop guaranteeing power investment returns in 2002 ? the same year US-based Mirant sold its stakes in generators in Shandong and Guangdong. The analyst also said foreign power builders were focusing more on rebuilding North America's creaky power grid.