Search Result

Srl

Item

ID: 112632

China's global equity oil investments: economic and geopolitical influences / Wolfe, Wojtek M; Tessman, Brock F

Tessman, Brock F	Journal Article
	0 Rating(s) & 0 Review(s)

Publication

2012.

Summary/Abstract

In this article, we construct and analyze an original database of overseas Chinese equity oil investments (EOI) in order to assess the relative importance of economic and geopolitical factors in determining the type of countries that are most likely to receive those investments. We find that China's national oil companies (NOCs) choose to make considerable investments in certain oil rich countries while ignoring others. We develop and examine 'economic opportunity' and 'geopolitical relevance' explanations of Chinese EOI. The economic explanation assumes that Chinese oil companies operate autonomously despite the fact that they are state owned, and that they seek international experience in countries offering less competition but more risk. The geopolitical explanation suggests that Chinese equity oil investments are developed and coordinated by the central government as part of a geopolitical strategy that is designed to bypass the so-called 'Malacca Dilemma' and deepen security ties with oil-rich states through the conduct of oil diplomacy. We argue that Chinese EOI tends to reflect both corporate interests and government priorities, and that it generates more liabilities rather than benefits for China.

Key Words

Energy ; Geopolitics ; China ; Pipelines ; Oil Diplomacy ; National Oil Company (NOC) ;
Sea - Lanes ; Strategy

Links

'Full Text'

In Basket

Export

ID: 123293

China's strategic hedging / Wolfe, Wojtek M

Wolfe, Wojtek M	Journal Article
	0 Rating(s) & 0 Review(s)

Publication

2013.

Summary/Abstract

China has sought to gain regional influence by utilizing a mix of energy investments and military modernization efforts. China's overall efforts aim to bring about three broad goals. First, China seeks to hedge its economic growth potential against the threat of energy source disruption. Second, it seeks to limit or deny access to areas of operations within the first island chain, effectively expanding their core strategic zone of interest within the South China Sea. Third, China wants to establish the Taiwan Strait as a 'no-go' zone preventing U.S. interference in the event of another Taiwan crisis. This type of hedging behavior can enhance a second-tier state's power without directly challenging the system leader. China has experienced some success in this approach but at a high cost. Its use of strategic hedging as an insurance policy carries a high financial and diplomatic premium.

Key Words

South China Sea ; China ; Economic Growth ; Military Modernization ; Energy Source Disruption

In Basket

Export