The Sino-Russian Rapprochement: Energy Relations in a New Era

A Harvard Business School Case Study

Abstract

The United States could enhance or threaten China’s energy security but China was unsure of the U.S. intentions. China and the United States were both friends and potential foes. In the meantime, Russia’s own ambivalent relationship with the United States and its Western allies has worsened. In this context, China and Russia have grown closer. Bilateral ties in the energy trade quickly improved: Russian oil exports expanded, while disagreements on the terms of natural gas supplies have been resolved. The case describes the impact of the interplay of great power politics, domestic political considerations, and economic factors on the efforts of the Chinese and Russian energy companies to expand business ties.

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