Globalizing China’s Energy Companies
The Role of State Finance
This study examines the extent to which the Chinese state has facilitated the globalization of Chinese energy companies. In just over a decade, Chinese energy companies have fast become household names across the world, either through trade, foreign direct investment, or through development bank loans. In terms of exports, China’s largest sectors are petroleum, photovoltaics, and coal but with respect to foreign investment Chinese energy companies are overwhelmingly concentrated in oil and gas. Despite the fact that China’s energy firms are increasing their use of domestic and global capital markets, we find that state finance has been the primary driver of the globalization of Chinese energy firms, with the China Development Bank and the Export Import Bank of China playing the leading role on the globalization of China’s global oil and gas companies. In arriving at these findings, we explain the dynamics of the Chinese financial system and how it supports the globalization of China’s energy companies.