Recently, manyscholars sought to understand Chinese OFDI (OutboundForeignDirect Investment) determinants and locationchoicesdue to its growing role in reshaping the world economy.Large amounts of Chinese investment to countries which are considered politically risky led many scholarsto try and explain the reasons for which Chinese investors are willing to invest in these environments. Logically, Chinese outbound investors should avoidplaces that are prone to high levels of political risk, and stay away from politically unstable environments.The common explanation for this puzzle provided by academic literature isthatChinese investors are accustomedto operatingin poor institutional environmentsgiven their home country is one where corruption and shady business practices are the norm.In this paper Irefutethisclaim and provide a novelpoint of viewtosolve thepuzzle. I claim thathome-host country politicalrelationsis a factorwhichplaysan important role in directing Chinese investment topolitically risky host countries.My hypothesis is thatChinese companies would invest inpolitically unstable environments when the host country has good political relations with China.Iusetwo casestudies to analyze OFDI flows to politically unstable countries in order to test my hypothesis, Myanmar and Iran.These case studiesdemonstratethat goodinter-statepolitical relations indeed leadsChinese investorsto invest inpolitically risky countries. First of all, because Chinese friendly diplomatic activities towards Myanmar and Iran lead both countries to trust China and provide it with privileges for investment and favored treatment. In addition, many investment deals between China andthehost counties were signed during senior official visits.Another evidence that good political relations lead to investment inin these countriesisthat when political relationsbetween them and China deteriorates, sodidChinese OFDI flows. This paper has important implications, first and foremost infinding a better explanation tothe puzzle of Chinese investment to politically risky environmentsthan the literature currently provides. In addition, this finding could assist in steering away the common perception regarding Chinese OFDI flows toward what isconsideredto be unstable and dangerous destinationsdue to China’s need for energy resources.