Research Of China’s Investment On Russia’s Oil And Gas Resources

With the high development of Chinese economy the requirement for oil and gas is increasing day by day, while the explored domestic oil and gas reserve can not meet this huge requirement. Therefore, under such a serious condition in energy supply and demand, China needs to expand its investment in foreign energy sources continually in order to provide protection for abundant energy supply to meet the requirement of the development of Chinese economy both politically and economically.Russia is the most import oil producing and exporting country, geographically adjacent to China, both have kept a friendly strategic relationship for a long time, the cooperation in energy sources between these two countries has an excellent foundation. In recent years the world oil prices experienced significant changes and energy supply is extremely unstable, this paper mainly studies and discusses the investment environment in Russia and potential risk in investment, provides corresponding measures and suggestions concerning with the risk of geopolitics, legal policy and finance.This paper is separated into three parts:Part one: the basic conditions of demand and supply are determined by the serious status in energy supply and demand in China and the overall strength of Russian oil and gas reserve. In the international investment background, “the theory of comparative advantage” and “the theory of attractive factors for investment” offered theory support for Chinese investment in Russian oil and gas.Part two: Russia has a good investment environment at present, macro economy, government policy, law and regulations, financial status and infrastructure, all of these are improving continuously, which is beneficial for Chinese oil companies to invest in Russia.Part three: the risk of Chinese investment in Russian oil and gas exists especially the risk in geopolitics, legal policy and finance. Three cases proved the existence of risk, hence measures and suggestions are offered correspondently.Although Chinese investment in Russian oil and gas is filled with challenges, the cooperation between China and Russia in energy sources is still the best choice to strengthen the strategic cooperation. The cooperation between China and Russia in oil and gas is not only a strategic cooperation but also a practical one. It reflects the overall direction of cooperation between the two countries and economic benefits of the two countries. In the long run China and Russia still need to strengthen the cooperation in oil and gas. This cooperation can not only verify Chinese oil supply but also the safe land transportation of China-Russia oil and gas, which has significant meaning in protecting the safety of Chinese economy and social operation.