Chinese Investment In The Russian Oil Industry

With the rapid development of Chinese economy, there is a sudden surge in thedemand for oil. But the development of the domestic oil industry cannot meet this hugedemand. The increasingly sharp contradiction between the supply and demand of domesticoil drives the Chinese petroleum enterprises to carry out the strategy of foreign directinvestment. Russia is a country rich in oil resources, and it has a long-term friendlycooperative relationship with China. In nowadays increasingly complex internationaleconomic and politics environment, how to implement the vote for Russia’s oil industryinvestment, make full use of Russia’s oil resources and ensure adequate oil supply, satisfythe continuing demand for oil in China, has become a subject that is worthy of furtherresearch.To analyze China’s investment in Russia’s oil industry, this paper uses a variety ofresearch methods including theoretical research and experience summary. There are mainlythree parts in this thesis: the first part gives a brief introduction of the relevant theories offoreign investment and case of investment in Russian oil industry, aiming at forming ascientific understand of foreign direct investment and guiding China’s investment in theRussian oil industry; The second part analyzes the motivation for China to invest in theRussian oil industry, the advantages and disadvantages of the investors, as well as theopportunity and challenge faced by them; The third part researches into the risks of China’sinvestment in the Russian oil industry and puts forward some suggestions on how to avoidthem.Through the whole research, this paper argues that: the severe situation of domesticoil supply, Russia’s rich oil resources and the friendly cooperative relationship betweenChina and Russia are the main motivations for China to invest in the Russian oil industry;Besides, China has its special advantages and opportunities when investing in Russia; Butat the same time, China faces many risks, such as financial risk, political risk, legal risk,regulatory risk and so on during the investment process. This article also givescorresponding countermeasures against these risks.