The end of exceptionalism? Explaining Chinese National Oil Companies’ overseas investments

This article examines how Chinese National Oil Companies (NOCs) make location decisions regarding investments in overseas oil and gas. We argue that these location decisions are determined by the allocation of risk between state-owned enterprises (SOEs) and high-level politics. As such, the investment decisions made by NOCs change over time and according to who bears the risk of the investment: the firm or the state. An econometric analysis based on a novel data-set of Chinese NOCs’ OFDI over a 14-year period supports this argument. Our findings challenge existing notions of Chinese exceptionalism: rather than making ‘risk perverse’ location decisions, we find that NOCs seek out host states with robust provisions for the rule of law, control over corruption, and that have a history of stability over the long run.