The influence of bilateral political relations on the growth of China's energy imports: A terminal margins perspective

For China, a major energy importer, energy security is closely linked to economic stability and sustainable growth. Against the backdrop of rising geopolitical and economic uncertainty, bilateral political relations may shape not only the scale but also the structure of international energy trade. This paper examines how bilateral political relations are associated with the growth margins of China’s energy imports. Using HS-6-digit energy trade data for China’s imports from 42 countries during 2000–2021, we apply the Hummels-Klenow decomposition to measure the extensive margin, quantity margin, and annual price margin, and estimate the relationship using a gravity-model framework. The results show that improved bilateral political relations are significantly associated with broader product-scope coverage and larger import quantities, while their effect on the annual relative unit-value margin is limited. In addition, free trade agreements and refugee-related pressures moderate the relationship between bilateral political relations and China’s energy import margins, particularly through product-scope and quantity adjustments. Further heterogeneity analysis shows that the association varies across development stages, source countries, and cooperation conditions. In particular, stronger bilateral political relations between China and Belt and Road Initiative countries are associated with greater import quantities and broader product-scope coverage, with more pronounced effects among lower-income partner countries.