Much has been said in recent days of a massive, $1.25 billion investment by the Chinese conglomerate China Wanxiang Holdings in the U.S. energy company Great Point Energy.

It looks like another example of a U.S.-based, venture-funded company turning to China to scale up its technology because it can’t get enough government funding, or financing from risk-averse banks, in this country (battery maker Boston Power also recently chose to move its manufacturing and R&D to China.)  

But in the case of Great Point, there’s more to the story. Its technology just doesn’t make sense in the United States, but just might in China.

Great Point converts coal into natural gas, and in the U.S., with natural gas prices at 10-year lows, there’s little need for this. China, however, relies heavily on coal for its electricity, and much of its coal reserves are such low quality that they aren’t suitable for use in the most efficient and cleanest coal plants. So it has to import higher quality coal from abroad, including from the U.S.

Great Point’s technology works on a range of materials—so it’s likely that it could transform low-grade coal into a natural gas, which is much more useful, and far cleaner.

At Copenhagen, China may have been reluctant to sign an international treaty that heavily restricts its carbon emissions, but a new report from the Pew Environmental Group says that private investors there are pouring more money into clean energy than investors in any other country.

The total investment of $34.6 billion in China last year displaced the United States from the top spot.

Last year, the U.S. invested $18.6 billion, the second highest amount in the world. As a percent of GDP, however, the figure is relatively small. By this measure, Spain invested five times more last year, and China, Brazil and the United Kingdom invested 3 times more. The United States is also about to be edged out of its lead in installed renewable energy capacity, with rapid growth in installations in China leading to a "virtual tie" last year.

The report attributes the large investment in China to national renewable energy and energy efficiency standards and other incentives there. It also noted that most of the money is going to financing existing clean energy technologies, not to venture capital to promote the development of new technologies. In this arena, the United States is still by far the leading country.