Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of Russia
The Belt and Road Initiative (BRI) has significantly expanded China’s energy sector investments in various countries, with Russia emerging as a key strategic partner due to its vast reserves of oil and natural gas. However, these investments are accompanied by substantial risks stemming from economi...
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| Format: | Article |
| Language: | English |
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Peoples’ Friendship University of Russia (RUDN University)
2025-08-01
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| Series: | RUDN Journal of Economics |
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| Online Access: | https://journals.rudn.ru/economics/article/viewFile/45440/25204 |
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| author | XiangRu Ma Ekaterina V. Nezhnikova |
| author_facet | XiangRu Ma Ekaterina V. Nezhnikova |
| author_sort | XiangRu Ma |
| collection | DOAJ |
| description | The Belt and Road Initiative (BRI) has significantly expanded China’s energy sector investments in various countries, with Russia emerging as a key strategic partner due to its vast reserves of oil and natural gas. However, these investments are accompanied by substantial risks stemming from economic volatility, geopolitical tensions, regulatory uncertainties, and environmental constraints. Given these challenges, this research aims to identify and analyze the primary investment risks faced by Chinese energy enterprises operating in Russia and to propose effective risk mitigation strategies. The study explores the legal framework governing foreign investments, financial uncertainties related to currency fluctuations and market instability, political risks associated with sanctions and diplomatic shifts, and infrastructure limitations that affect operational efficiency and project implementation. To achieve this objective, the research employs a mixed-methods approach, combining qualitative case studies of major Chinese energy enterprises in Russia with quantitative risk assessment models. The study utilizes SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis and PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis to systematically evaluate the external and internal risk factors affecting Chinese investments. Furthermore, financial and market data are analyzed to assess foreign direct investment (FDI) flows, exchange rate fluctuations, and the impact of global oil price volatility on investment stability. The findings indicate that regulatory uncertainties in Russia, Western sanctions, currency exchange rate fluctuations, and logistical constraints pose significant challenges for Chinese energy investors. However, companies that implement diversified investment models, legal protection mechanisms, and strategic partnerships with Russian firms demonstrate greater resilience. Government-backed insurance programs and bilateral agreements help mitigate financial risks, while joint ventures with Russian state-owned enterprises improve market access and regulatory compliance. The research highlights that a combination of financial hedging strategies, diplomatic engagement, and adaptive investment structures enhances the long-term sustainability of Chinese energy projects in Russia. This study contributes to the broader discourse on global energy security and international economic collaboration by providing practical insights into sustainable investment strategies under the BRI framework. The findings offer valuable recommendations for Chinese energy enterprises seeking to navigate the complex investment landscape in Russia while ensuring financial stability, regulatory compliance, and long-term profitability. |
| format | Article |
| id | doaj-art-3dd4bf72e6ee4acdae2fe3a37ff1f56a |
| institution | Kabale University |
| issn | 2313-2329 2408-8986 |
| language | English |
| publishDate | 2025-08-01 |
| publisher | Peoples’ Friendship University of Russia (RUDN University) |
| record_format | Article |
| series | RUDN Journal of Economics |
| spelling | doaj-art-3dd4bf72e6ee4acdae2fe3a37ff1f56a2025-08-20T03:36:45ZengPeoples’ Friendship University of Russia (RUDN University)RUDN Journal of Economics2313-23292408-89862025-08-0133222724210.22363/2313-2329-2025-33-2-227-24221099Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of RussiaXiangRu Ma0https://orcid.org/0000-0001-8769-8170Ekaterina V. Nezhnikova1https://orcid.org/0000-0002-5236-7950RUDN UniversityRUDN UniversityThe Belt and Road Initiative (BRI) has significantly expanded China’s energy sector investments in various countries, with Russia emerging as a key strategic partner due to its vast reserves of oil and natural gas. However, these investments are accompanied by substantial risks stemming from economic volatility, geopolitical tensions, regulatory uncertainties, and environmental constraints. Given these challenges, this research aims to identify and analyze the primary investment risks faced by Chinese energy enterprises operating in Russia and to propose effective risk mitigation strategies. The study explores the legal framework governing foreign investments, financial uncertainties related to currency fluctuations and market instability, political risks associated with sanctions and diplomatic shifts, and infrastructure limitations that affect operational efficiency and project implementation. To achieve this objective, the research employs a mixed-methods approach, combining qualitative case studies of major Chinese energy enterprises in Russia with quantitative risk assessment models. The study utilizes SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis and PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis to systematically evaluate the external and internal risk factors affecting Chinese investments. Furthermore, financial and market data are analyzed to assess foreign direct investment (FDI) flows, exchange rate fluctuations, and the impact of global oil price volatility on investment stability. The findings indicate that regulatory uncertainties in Russia, Western sanctions, currency exchange rate fluctuations, and logistical constraints pose significant challenges for Chinese energy investors. However, companies that implement diversified investment models, legal protection mechanisms, and strategic partnerships with Russian firms demonstrate greater resilience. Government-backed insurance programs and bilateral agreements help mitigate financial risks, while joint ventures with Russian state-owned enterprises improve market access and regulatory compliance. The research highlights that a combination of financial hedging strategies, diplomatic engagement, and adaptive investment structures enhances the long-term sustainability of Chinese energy projects in Russia. This study contributes to the broader discourse on global energy security and international economic collaboration by providing practical insights into sustainable investment strategies under the BRI framework. The findings offer valuable recommendations for Chinese energy enterprises seeking to navigate the complex investment landscape in Russia while ensuring financial stability, regulatory compliance, and long-term profitability.https://journals.rudn.ru/economics/article/viewFile/45440/25204belt and road initiativechinese energy enterprisesrisk mitigation strategiesgeopolitical challengesfinancial stability |
| spellingShingle | XiangRu Ma Ekaterina V. Nezhnikova Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of Russia RUDN Journal of Economics belt and road initiative chinese energy enterprises risk mitigation strategies geopolitical challenges financial stability |
| title | Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of Russia |
| title_full | Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of Russia |
| title_fullStr | Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of Russia |
| title_full_unstemmed | Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of Russia |
| title_short | Investigation into investment risks and mitigation strategies for Chinese energy companies in Belt and road countries: a case study of Russia |
| title_sort | investigation into investment risks and mitigation strategies for chinese energy companies in belt and road countries a case study of russia |
| topic | belt and road initiative chinese energy enterprises risk mitigation strategies geopolitical challenges financial stability |
| url | https://journals.rudn.ru/economics/article/viewFile/45440/25204 |
| work_keys_str_mv | AT xiangruma investigationintoinvestmentrisksandmitigationstrategiesforchineseenergycompaniesinbeltandroadcountriesacasestudyofrussia AT ekaterinavnezhnikova investigationintoinvestmentrisksandmitigationstrategiesforchineseenergycompaniesinbeltandroadcountriesacasestudyofrussia |