The state- business’ link in China’s energy relations with Latin America

Following a general trend for marketization in the last two decades, China’s National Oil Companies (NOCs) have been transformed into competitive State Owned Enterprises (SOES). For example, Chinese NOCs spent around USD 29.39 billion in 2010, with more than half invested in Latin American (USD 15.74 billion) (Jiang, 2011). However, attributing Chinese overseas investment completely to government initiatives oversees the importance of profit imperatives driving Chinese companies to expand abroad.
The aim of this presentation is to demonstrate that much of the confusion about NOCs performance can be solved by making an analytical distinction between its business expansion on the one hand and Beijing’s oil diplomacy on the other. However, as the companies have to deal with adverse situations, it is evident that they rely on the Chinese state for economic and diplomatic support to overcome their status as ‘latecomers’ in the Latin American energy market. This has led to a relationship of convenience and synchronization between the Chinese state’s energy strategy and the NOCs’ internationalization aims and profit mandate.