China-Latin America relations: a Comparative Typological approach

1. China-Latin America relations: a Comparative Typological approach Steen Fryba Christensen, presentation at workshop, Nov. 19th 2015: New Trends in China – Latin America Relations George Washington University, Elliot School of International Relations Sigur Center for Asian Studies

2. Focus • China-Latin America relations, interests and aims. • Two moments: 2004 and 2015 (dynamic research object – issue of change) • Point of exit is threetypologies, all South American(types of countries), based on three elements. Aim is China-LA relations broadly. Research in progress. • Typologiesare not theories but a usefulway to organizemy/one’sthoughts

3. Reflecting on approaches to China-Latin America Relations • Winners and losers(conjunctural and economicfocus) (mid-2000s). • Dynamic properties of economic relations: The danger of ”de-industrialization” for South American ”winners”. • Broaderapproaches: Politicaleconomy, Geopolitics, economy.

4. A broad approach is suggested: relations, interests and aims • A) Economicrelations. B) GeopoliticalissuesC) China’saims, interestsand strategies. D) Latin American aims, interestsand strategies. • Dynamic analysiscomparingtwo moments – 2004/2015.

5. My aim • To analyze: Do China-LA relations, strategies and aimsdifferaccording to LA country types? • (The analysis is basedon a systemic, historicalstructuralconceptionof development and international relations (Wallerstein; Latin American historicalstructuralism). Importance of ownstrategies for development. Concept of ”internal-external situations” (Cardoso/Faletto).)

6. 3 Typologies • Brazil • Venezuela (Ecuador, Bolivia) • Chile (Colombia, Peru) Though the typologiesare all South American, it is assumedthatthistypological approach canbe generally useful in analyzing China-Latin America relations, interests and aims– throughcomparison on the three elements/dimensions.

7. Typologiesarebased on 3 elements • 1. Economic policy orientation. 2. Foreign policy orientation. 3. Development model– economic (production) structures.

8. China-Brazil • 1. Intermediateeconomicstrategy: Orthodox/Heterodox. • 2. National autonomythroughdiversification. Seeksmultipolarityand influence. Basedon a critical ”worldvision”. Seeks to change global power balances through South-South cooperation and coalitions, e.g. with China: a ”similar country”/Great PeripheralCountries. • 3. The most diversifiedeconomy, but increasinglynatural ressource based. The biggesteconomy in Latin America.

9. China-Venezuela (Ecuador and Bolivia) • 1. The most heterodox – economicstrategy. Stronglyinterventioniststate. • 2. National autonomyand multipolarity. Stronglyanti-hegemonic. Anti-US and Anti-neoliberal. • 3. ”Mono-cultural” economic model. Neo-extractivism.

10. China-Chile (Peru and Colombia) • 1. The most orthodoxeconomicstrategy. Liberalism. • 2. Liberalism. Diversification. Open regionalism+ post-hegemonicregionalism. Emphasis on economicaspects. Bilateral FTA with US, China etc – part of TPP. • 3. An intermediatelevel of economicdiversification. Natural ressource emphasis.

11. Othercountries (%) • Can beanalyzed with reference to the three elements in the typologies. • Mexico and Central America have development models thatdiffer from South American models in terms of productionstructure/specialization. • Uruguay is a small economylargelybased on agriculturalspecialization. Paraguay as well, but with a weakerindustrial base than Uruguay. • Argentina is more diversifiedthan Uruguay and Paraguay – and is more heterodox in economics and foreign policy.

12. China-Brazil: Relations, strategies and aims • 2004: BrazilinitiallyveryenthusiasticaboutChina’s rise. Global politics – alliances with ”similarcountries.” Growing trade and improvedexportprices. Helps Brazilstabilize and groweconomically. However, skeptical and critical attitudes from industrialinterestorganizations. • China interested in Brazilianresources (oil, steel, soy, food) and market. Initially not veryinterested in the political dimension due to priority to relations with the US.

13. China-Brazil: Relations, strategies and aims • 2015: Brazil’sviewmuchlike in 2004, althoughthere is now a greaterworryabout the North-South pattern of economicinteraction. Not so similarafter all. Still a hopethatChineseinvestmentswillbeuseful, still a hope for betteraccess to Chinesemarket for products with highervalueadded. • Emphasis on BRICS and South-South, but Brazilmaychangeforeign policy orientationtowards a greateremphasis on Latin America, Europe and the US. Volatility in exportprices to China have revealedfragility of excessive dependence on ”ressources” and Chinesemarket. • Economiccrisis – risks of a ”jump backwards” in terms of economic model. ”Shared gains”?

14. China-Brazil: Relations, strategies and aims • China 2015: Interestslargelyrevolvearoundaccess to Braziliannaturalresources (Soy, Iron) and markets. More FDI in Brazilrelated to this. Enhancedfocus on the ”win-win” discourse and rhetoric- which is increasinglydifficult to ”sell”. • China-CELAC – seeking image as a ”friend” of Latin America thatreallywants to assure ”win-win”. More focus on South-South coalition – BRICS – as a tool to enhanceinfluence. This may not be a lasting emhasis. Hegemonicstrategy of influence in all regions and influencethroughstructuraleconomic power (and diplomacy)/or just focus on economicinterests and aims?

15. China-Venezuela relations • 2004: Great enthusiasm in Chávez government (Bolivia and Ecuador later, though Bolivia lessconnected to China economically). • Autonomyenhancing. China as an opportunity – prices, trade, investment and commonprojects. Anti-hegemonic intention on the side of Venezuela. • 2015: same situation as in 2004. • However, developmentoutcomesvary(V/E/B) despitecommonexperience of volatility of ”ressource/exportprices”. (Ownstrategies; Venezuela’suse of windfall profits is lessproductivethane.g. Bolivia’s)

16. China-Venezuela relations • 2004: China’smaininterest is oil (mining in Ecuador, too). Rhetoric: not a challenge to US influence. • 2015: In practiceChina’sinfluencegrows due to its growing economicpresence and due to cold bilateral relations between US and Venezuela. China’sinterestremainsfocused on ”natural ressources” for import. Much more FDI and financing (V + E especially). (localconflicts in mining – Ecuador). Win-Win discourse. Continuedfinancing of V? • China’s ”support” for and financing of Venezuela (and Ecuador) more based on economicintereststhan on ideology. However, ideologyfaciliates growing Chineseinfluence (V, Ec, B). Particularly Venezuela (but also Ecuador) is increasingly dependent on China.

17. China-Venezuela: characteristics of their mutual relations and aims. • North-South pattern of economic relations. • 2015: Issueof growing dependency and risks to autonomy – Chineserhetoric: ”Win-Win”. Different from US (solidarity). • In reality wecanobservea potentiallyriskydevelopment for Venezuela. It remains to beseen if Bolivia and Ecuador willbeable not to grow as dependent on China as Venezuela.

18. China-Chile (Peru and Colombia): Relations, interests and aims. • 2004: Chile (Peru and Colombia) verywelcoming of China as a way to diversify and grow the economy + strengthenautonomy. Emphasis is on economic relations. • 2015: China has becomeChile’sgreatesttrading partner and export destination. Chile has not beensuccessful in attractingChinese FDI (contrary to Peru and Colombia – mines in Peru; localconflictsaroundmininginvestments - Peru). • Positive developmentaloutcomes, thoughvolatility in exportprices is also relevant for thesecountries.

19. China-Chile (Peru, Colombia):Relations, interests and aims. • 2004 and 2015: China interested in copper imports and in Chileanexportmarket (mining and oil Peru/Colombia). • FDI not strategicallyimportant for China in Chile (nooil, coppernot particularly open sector). China interested in mininginvestmentin Peru, infrastructure in Colombia and Peru. • Win-windiscourse (largelyaccepted in thesecountries).

20. General for the threetypologies • China’saimsseem to be general in nature: Access to needednaturalresources (mainaim) and exportmarkets. FDI associated with these same aims. Financing with same aim and potentiallyalso as a way to assureacceptance of ”win-win” discourse. • Interest in influence and a good image largelyassociated with the economicaimsdescribed. Potentiallyalsoconnected to geopolitical ambition of growing influence in all world regions (hegemony?)

21. Othercountries (%) • Mexico: China mainlyseen as a threat (from competition in Mexican and Third Markets (US). • Central America: Same as Mexico – thoughsomeindividual differences appear. Costa Rica – particularlycloserelationship. Nicaragua – canalproject. Relevance of Taiwan/One China policy? • Argentina: Hit by volatility; FDI interest. • Uruguay and Paraguay same type of relations, but more successful in development terms thanother Atlantic South American countries.

22. Conclusions and Synthesis: China-Latin America Relations • Relations between China and Latin America have gone from beingratherinsignificantsome 15 yearsago to beingverysignificantnow for almost all of Latin America. • Economic relations follow a North-South patterntoday. Trade composition/capitalexports (FDI and lending). Shared gains? Or areweratherseeing growing dependencyand cementation of ressource-based models of development?

23. Degree of Chineseinterest/relations with Latin American countries • Especiallystrong relations with a fewcountries – 5-6: Brazil, Chile, Argentina, Peru, Venezuela (Mexico). • General interest in natural ressource imports, exportmarkets (investmentopportunities, FDI and financing – typicallyconnected to same interest). • Interestin a good image across the board. • 1.Main interest is economic. • 2. Influence: One China (Taiwan) and geopoliticalcompetition with the US?

24. Conclusions and Synthesis: China-Latin America Relations • China’srhetoricregardingitsrelationship with Latin America is upbeat. It seeks to create an image of a country that is different from the United States and represents an alternative model for Latin America and the South as a whole (than the US/North) and neoliberalism: the ”Win-Win” rhetoricsums up this ”story”.

25. Conclusions and Synthesis: China-Latin America Relations • The rhetoric is howeverincreasingly out of sync with developments in the Brazil and the Venezuela typologies. Theyexperience a regression in economic model and growing financialvulnerability and economiccrisis. This leads to reconsideration (Brazil) and confusion (Venezuela) and growing China dependency. The Chile typologydoesbetter but experiences the same North-South economicrelationship. • The rhetoric has not beenveryconvincing in Mexico and Central America, perhaps with Costa Rica as an exception. Hopes: Mexico, Nicaragua, others?

26. Conclusions and Synthesis: China-Latin America Relations • China’s real aimsare to pursuetheircoreinterests in promotingtheireconomic model dominated by urban areas and manufacturingproduction and exports, moving up the value-chain and going global + at the same time secureaccess to needednaturalresources, largely in Africa and in South America. • The good and friendly image China promotes is meant for international ”consumption” and the legitimacy of China’sexternal relations thatwouldallow the continued ”economic rise” and, perhaps, the ”political rise” of China as a superpower and a potential hegemon/or keyeconomy of the global system: Return of the ”Middle Kingdom”?/hegemonic power?

27. Conclusions and Synthesis: China-Latin America Relations • Of the three elements in the typologies, the issue of economic model/production system and associated social system is the most importantpredictor of the national characteristics of China-Latin America relations. • China does not seemparticularlyconcerned with the economic policy element nor the foreign policy element of Latin American countries.

28. Conclusions and synthesis • Brazil and the Venezuela typologydon’tonlyfocus on the economic dimension, but also the geopolitical dimension in theirway of relating to China. • Economicdevelopments and changingdomesticpoliticalconstellations and ideas/interpretations may alter the approach to China.