Oil and state capitalism: government-firm coopetition in China and India

This paper examines the domestic sources of the internationalization of national oil companies (NOCs) in China and India. It argues that -- counter to notions of state-led internationalization -- the going abroad of NOCs reflects a pattern of ‘coopetition,’ i.e., the co-existence of cooperation and conflict between increasingly entrepreneurial NOCs and partially supportive and interventionist home governments. In China, the state has predominantly assumed the role of resource supplier , rarely stepping in as a veto player . In India, the NOC--government relationship has been more adversarial, with the state intervening more often as a veto player than its Chinese counterpart and only slowly emerging as a resource supplier . These patterns of internationalization can be explained by how two major trends have been playing out in the two countries: (1) the marketization of NOCs, and (2) the reform of the governance of overseas investments. The findings matter to theory and policy. First, they unpack the relational dynamics of business--government relations in hybrid models of capitalism beyond notions of top-down and bottom-up dynamics. Second, our analysis shows that the state intervenes in the international energy strategies of emerging economies as the occasional veto player rather than actively leveraging NOC internationalization for geopolitical goals.