China’s new energy push reshapes global trade

China’s Belt and Road Initiative recorded its highest oil and gas engagement in 2025, with deals totaling $93.9 billion—more than double the previous year. The increase signals a move toward construction-driven infrastructure and targeted financing, changing how Chinese firms expand abroad.

Oil and gas made up $71.5 billion of last year’s total, tripling earlier figures. Instead of acquiring equity in fields, Chinese companies now favor engineering, procurement, and construction models. A single contractor manages entire projects under these arrangements. The approach supports host countries’ objectives by capturing more value from energy resources, spanning production, processing, and power infrastructure.

Chinese firms benefit beyond securing hydrocarbons. They profit from selling equipment, engineering services, and long-term project cycles that align with local priorities. The model lets these companies earn from construction and financing while avoiding resource ownership risks.

State-owned enterprises drive the construction push, while private firms take selective investment risks. Financing has also evolved. Early Belt and Road projects depended on sovereign-backed loans, but debt concerns and Beijing’s caution have reduced that method. Risks now often shift to project revenues, private developers, or resource-backed agreements, as noted by a senior fellow at Boston University’s Global China Initiative.

Host countries gain from gas-based industrial projects through fertilizers, power, and reduced import reliance. Yet these assets face regulatory challenges. China’s trade policy offers some relief. In May, it extended zero-tariff coverage to 53 African nations, improving export prospects. Local governance remains unpredictable, though. Large gas and petrochemical projects require strong regulation on emissions, methane leaks, and pollution. In countries with weak oversight, long-term issues—pollution, poor disclosure, uneven benefit-sharing—could outlast political support.

Last year’s surge relied on rare megadeals, and another at that scale appears unlikely. The trend continues, however: Chinese firms will pursue oil and gas projects where industrialization plans, returns, and risk-sharing align. Whether these agreements deliver real development without burdening nations with high-emission assets remains uncertain.

The shift helps build infrastructure host countries want. It may also commit them to projects with questionable long-term viability.

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