State capitalism and hydrocarbon security in China and Russia

Abstract

This study seeks to investigate how and why state capitalism developed in China and Russia in the oil and gas sectors and explain why two countries that have contrasting energy-security challenges use state capitalism to solve them. It argues that state control over the oil and gas sectors has succeeded in achieving their respective goals, bolstered bilateral hydrocarbon ties between the two countries, buffered each against the geopolitics and financial volatility of oil and gas markets, and offered greater flexibility to shape their respective energy regimes over the last two decades. Still, state capitalism presents geopolitical and commercial challenges as the energy transition away from hydrocarbons advances in the coming decades.