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Steen Fryba Christensen Presentation at workshop:

Latin American Geopolitics and strategies of insertion in the global economy in the context of China’s Rise and global system transformation. Steen Fryba Christensen Presentation at workshop: China-Latin America Relations – Emerging powers in the Global System

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Steen Fryba Christensen Presentation at workshop:

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  1. Latin American Geopolitics and strategies of insertion in the global economy in the context of China’s Rise and global system transformation Steen Fryba Christensen Presentation at workshop: China-Latin America Relations – Emerging powers in the Global System Aalborg University, June 26, 2015.

  2. China’s Rise: Centripetal or Centrifugal tendencies? • In the context of the 1990’s: Centripetal tendencies in Latin America. • ”Open regionalism”. • Insertionfocus on US/OECD/North. • Economicorthodoxy. • Search for ”credibility”. • China (India) rises but remains ”small”

  3. China’s Rise: Centripetal or Centrifugal tendencies? • In the contextafteryear 2000/2003: Centrifugal tendencies in Latin America. • ”Post-neoliberal” regionalismsemergealongside ”open regionalism” • Insertionfocus: Diversification (mainly) • Economicorthodoxy or heterodoxy • Search for ”autonomy” (and influence) • China (India) becomes ”big”/rises.

  4. Analyzing China-Latin America Relations: Comparative approach • Creation of three ”typologies” for comparison • Brazil, Venezuela and Chile representtypologies. • Three criteria for typologycreation: • 1. Economicorthodoxy/heterodoxy. • 2. Economic model (production profile). • 3. Foreign policy orientation (regionalisms)

  5. Typology 1 • Venezuela: • 1. Heterodoxy (with orthodox elements) • 2. Natural ressource basedeconomy with ”monocultural” tendencies (oildependency) • 3. Aim of autonomythroughdiversification, multipolarization. Anti-US/imperialism. South-South alliances. ALBA, Unasur, CELAC, Mercosur, OPEC (includingseveral ”anti-US” governments), China.

  6. Typology 2 • Brazil • 1. Heterodoxy and orthodoxycombined. • 2. Diversified economy • 3. Aim of autonomythroughdiversification, multipolarization. Influence. South-South alliances. Unasur, Mercosur, CELAC, China, BRICS, Global playerincluded in the top of the global hierarchy+ regional leadership.

  7. Typology 3 • Chile • Economicorthodoxy with a ”social orientation”. • Intermediateeconomic model basedlargely on naturalresources of different sorts. Value-adding. • Autonomy. Diversificationthrough a liberal strategy with a strongfocus on economic dimension (USA, EU, China, South Corea, Mercosur, Israel etc. etc. etc.). Unasur, CELAC, Pacific Alliance, Trans Pacific Partnership.

  8. Typologies • 1. Includes Bolivia and Ecuador. • 2. Partiallyincludes Argentina. • 3. Includes Colombia and Peru • Mexico and Central America fallsomewhatoutside of the typologies. Mexico willbedrawninto the analysisthroughcomparisons with category 2 and 3, though Mexico is specialized in manufacturingproduction.

  9. Analysis from Chinese and Latin American perspectives • In terms of the economic dimension, China-Latin American relations followrelatively clear patterns. • The analysiswillmainlyfocus on the economic dimension.

  10. Chineseperspective • China’sinterest: 1. Natural resources/commodities imports. Oil is particularlyprioritized(Metals, food, foodstuff). • 2. Exportmarkets for Chinesemanufacturing. Chinese • 3. FDI (from 2010 mainly). Mainly in prioritizednaturalgoodssectors and in infrastructure and energy. Alsosomeinterest in manufacturingsector. This interest is likely to rise.

  11. Chineseperspective • Interestparticularlydirected at: Brazil, Argentina, Chile, Venezuela, Ecuador. • Geopoliticalaspect: BRICS. Good relations with Latin America and Caribbean (Africa) (etc.). Avoidbarriers for China’seconomic rise. Basis for potential regional hegemony (Asia) and influence in other regions. Reduce US/Western power superiority(”sharedorder).

  12. Typologybasedcomparativeanalysis of Latin American perspectives • Rise of China, Great peripheralcountries, the South provides a better international context for ”autonomy”/room of maneuver. • 2000s debate on ”winners” and ”losers”: South America vs. Mexico and Central America. • Hugechallenge for Mexico and Central America as theireconomic models are not very ”complementary” to China’seconomic model. Competitive pressure.

  13. Analysis • For South America ”complementary” aspects of economic models: China demandsprimarysector imports. Significantimprovements in terms of trade for typology 1, 2 and 3 countriesallow for economicdynamism and economicstabilization+ reducedexternaleconomicvulnerability. • Context of ”optimism” in typology 1, 2 and 3 countries in South America between 2000/2003 and 2008.

  14. Analysis • Somecriticalvoices (particularly from industry, and academia). The nature of the ”Chinese system” of state/business coop. Dangerof ”de-industrialization” and ”re-commodification” (particularlyBrazil; and Argentina). Some”sino-phobia” as in Mexico. • 2009-2013. Optimism and China-enthusiasm is largelymaintained. However, growing discontent with North/South aspects of economic relations with China. Hopes for the future – FDI. • 2013-2015. Hopes and desorientation. Search for new strategies + for reducingexternaleconomicvulnerabilities. Growing dependency of China, particularly in typology 1 (2)

  15. Analysis • Typology 1: Venezuela (Ecuador). Economicinstability (negative growth, high inflation). Negative growth in Venezuela. Cut-backs in public spending. • China as ”lender of last resort”. Venezuela facingdeep problems from domestic and external sides. • Domesticeconomicinstability – politicalinstability. • US sanctions policy towards Venezuela. Attempt at destabilizing the Venezuelan regime. US strategy of re-asserting its regional leadership position. • Venezuela: weakness and highlevel of externaleconomicvulnerability. Question: Stability of Chinesefinancial support? Hoping for Chinese FDI and financing.

  16. Analysis • Typology 2: Brazilfaceseconomic stagnation and growing domesticpoliticaldiscontent. • Re-assessment of strategy of economicinsertion in the global economy. Looking more towards the North again – US, EU etc. • How can ”we” export more and strengthen the manufacturingsector? • Cut-backs in public spending due to economic stagnation. • Hopes for Chinese FDI. (Mexico does not face a similar problem. Still challenged by Chinesemanufacturingsectorcompetition. Hopes for Chinese FDI; oilsector ”opening”)

  17. Analysis • Typology 3: Chile (Colombia and Peru). • Chile faces the more adverse international context with ”volatility” in prices of commodityexports. • It is more economically stable, with strongerfoundations. • The enigma of ”missing” Chinese FDI in Chile. Hopes for more FDI from China. (Mexico hopes for FDI, too).

  18. Final observations • For China the maintypolocycategory of relevance for Chineseinterests is category 2 – ”economic model”. • Category 1 – economicstrategy and category 3 – foreign policy are not veryimportant for China.

  19. Final observations • For Latin America category 1 countries face major economicchallenges of dependency/vulnerability. Category2 countriesalso face suchchallenges, but to a smaller extent. Category3 countriesare more stable but do face challenges from adverse ”terms of trade”. • Mexico and Central America face continuedchallenges from Chinesecompetition. • At the moment all categorieswant more Chinese FDI. • If this situation persists I wouldexpect re-orientations in developmentstrategies (economic/foreignpolicy).

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