Political Risks to China’s Energy Infrastructure Investment in Countries along the Belt and Road

Fang Yang, Qinfan Gan () and Liqiao Guo ()
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Fang Yang: Center for Southeast Asian Studies, Xiamen University, Xiamen 361005, China
Qinfan Gan: School of Public Affairs, Zhejiang University, Hangzhou 310058, China
Liqiao Guo: Graduate Institute for Taiwan Studies, Xiamen University, Xiamen 361005, China

Energies, 2023, vol. 16, issue 18, 1-15

Abstract: Energy infrastructure connectivity is a key implementation area for the success of the Belt and Road Initiative. In the current complex international environment, China’s energy infrastructure investment in the countries along the Belt and Road is often restricted due to varying degrees of heated disputes with the host countries, thus facing the political risk of investment loss or even failure. This paper used the Heckman two-stage selection model to overcome the sample selection problem in traditional literature and systematically studied the political risks to China’s energy infrastructure investment in countries along the Belt and Road within a unified framework. The results showed that Chinese energy infrastructure investments exhibited market-seeking and energy resource-seeking features; while political risks had a significant impact on choosing the locations of energy infrastructure investments, socio-environmental factors were not given sufficient attention. At the national level, the implementation of the Belt and Road Initiative was beneficial to China’s foreign energy infrastructure investments under certain regulatory levels and environmental policy performance.

Keywords: political risk; the belt and road; energy infrastructure (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
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