For profit or strategic purpose? Chinese outbound energy investments and the international economic regime

Chinese foreign energy investments are facing increasing opposition based on concerns that they are made with an ulterior strategic motive. Some states have been seeking to block the access of Chinese companies to their market and, for existing investments, to international arbitration, by portraying them as instruments of the government. It is important for China’s participation in the international economic system that its energy companies are not automatically excluded because of suspicion of China’s motives, but are subject to a nuanced assessment in which national and international economic law has a role to play. To distinguish strategic from commercial projects, this article analyses the Chinese regulation of outbound energy investments based on international principles of economic governance. The objective is to identify channels of political interference with investment decisions, by focusing on regulatory approval, state guidance and corporate governance.