The Political Economy of China-Latin America Relations in the New Millennium

Brave New World

Margaret Myers, Carol Wise, Margaret Myers, Carol Wise

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317214076
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Global Politics
• Index: Politics & International Relations

In this book, China-Latin America relations experts Margaret Myers and Carol Wise examine the political and economic forces that have underpinned Chinese engagement in the region, as well as the ways in which these forces have shaped economic sectors and policy-making in Latin America. The contributors begin with a review of developments in cross-Pacific statecraft, including the role of private, state-level, sub-national, and extra-regional actors that have influenced China-Latin America engagement in recent years. Part two of the book examines the variety of Latin American development trajectories borne of China's growing global presence. Contributors analyse the effects of Chinese engagement on specific economic sectors, clusters (the LAC emerging economies), and sub-regions (Central America, the Southern Cone of South America, and the Andean region). Individual case studies draw out these themes.

This volume is a welcome addition to the growing body of literature on China-Latin America relations. It illuminates the complex interplay between economics and politics that has characterized China's relations with the region as a second decade of enhanced economic engagement draws to a close. This volume is an indispensable read for students, scholars and policy makers wishing to gain new insights into the political economy of China-Latin America relations.

PART I

Cross-Pacific Statecraft

Aid and Capital Flows from China to Latin America

1

ONE ACTOR, MANY AGENTS

China’s Latin America Policy in Theory and Practice

Benjamin Creutzfeldt

Introduction

The relationship between the People’s Republic of China and Latin America has grown rapidly since then-president Jiang Zemin’s tour of the continent in 2001, both in quantifiable terms and in the perceptions of politicians, business leaders, and foreign observers. At the end of 2008 Beijing published its first policy paper on Latin America and the Caribbean, a canvas of intentions that set out broad terms for bilateral cooperation, invariably described as a “win–win situation.” The Chinese leadership has made numerous overtures to the governments of the region in the past few years, one of the most noteworthy being the speech by Premier Wen Jiabao at the UN’s Economic Commission for Latin America and the Caribbean on June 26, 2012.¹ Wen’s address, “Trusted Friends Forever,” raised the character of the China–Latin America connection to something akin to poetic destiny. He outlined four specific proposals for furthering cooperation: political links, economic development, food security, and human and scientific exchange. These proposals were backed up with loans, funding, and financial targets.

The current government of Xi Jinping has continued the pattern with annual visits to the region, further incentives for cooperation, and the setting of targets for trade and investment. In the course of 2014, the most emblematic institution of the ever-closer ties between China and Latin America came into being, in the form of the China–CELAC Forum. This was modeled on the Forum of China–Africa Cooperation (FOCAC) that was created formally in 2000 during a summit in Beijing. China’s interest in and support for the China–CELAC Forum has been emphatic since President Xi sent a congratulatory message to the CELAC summit in Caracas in January 2014. Xi also presided over a ministerial meeting for the official inauguration of the Forum in Brazil in July of that year, and hosted the inaugural ministerial summit in Beijing in January of 2015.²

This chapter considers aspects of agency theory and economic statecraft in China’s relations with Latin America, looking at Beijing’s overall foreign policy approach, its evolving relationship with the Latin American region, the interests underlying this relationship, and the challenges it faces. I discuss three broad issues: the core characteristics of China’s foreign policy; China’s view of Latin America’s place within the grand scheme of things; and the role of state-owned enterprises (SOEs), small and medium-sized firms (SMEs), and other agents within those strategies and challenges. I then offer a possible explanation for the inconsistencies within the Chinese approach, and conclude with some observations on the prospects for China’s foreign policy toward Latin America.

Various difficulties arise when trying to analyze this evolving relationship. Despite it being fairly contiguous in geopolitical and historical terms, the region of Latin America and the Caribbean shows deep divisions linguistically and in terms of its sociocultural and political identities.³ Yet it would be just as misleading to consider China as a unitary actor: while Beijing promotes and reinforces the view of its principled, centrally guided approach, it has also been boosting outward global activity by its state-owned and private companies, through its Going Out strategy (

), occasioning a growing diversity of types of engagement.⁴ As a consequence, China’s unifying rhetoric, as exemplified by Premier Wen’s speech, is echoed by a deafening din of splintered voices.

China’s Foreign Policy

As China’s footprint in every region of the world and every sphere of human endeavor grows, so does the debate as to what its true impact will be in the course of the twenty-first century. Opinions range from boisterous predictions that it will reach “superpower status” and “rule the world” within a generation⁵ to more level-headed analyses that it will be a “partial power” at best.⁶ China is, unquestionably, a major protagonist on the global stage and one that is increasingly shaping ideas and institutions the world over. As it matures into this role, its identity and actions are shaped by its own history and aspirations: its history as a humiliated power after the middle of the nineteenth century (

), the concurrent fear of losing control over its sovereign territory, and a deeply felt urge to regain influence. It could be said that China’s core concerns are with social stability, national sovereignty, and steady consumption. These are inextricably linked with economic growth and reliable access to raw material supplies, energy, and food. What then do these core issues mean for Chinese foreign policy in Latin America?

They mean, essentially, that China’s foreign policy strategies since 1978 are part and parcel of the country’s modernization drive, and its principal target is the creation of an international environment conducive to this priority. The Twelfth and Thirteenth Five-Year Plans describe a gradual transformation of the country’s development model, with the combined goals of accelerating urbanization and domestic consumption, and creating sustainable industrial and investment structures. Going further, the State Council published the Energy Development Five-Year Plan,⁷ where specific reference is made to the increasing volatility in global energy markets (

), a high-risk factor that directly affects the rest of the national economy. The preamble explains that “energy is the material basis for the progress of human civilization and an indispensable basic condition for the development of modern society. It remains a major strategic issue for China as the country moves towards its goals of modernization and common prosperity for its people.”⁸ Along this line, the priorities presented in these documents make clear that China’s domestic concerns and requirements trump all foreign policy objectives. This can be seen in the fact that neither China’s new foreign minister, Wang Yi, nor his predecessor, Yang Jiechi, are members of the Politburo. This reality leads some analysts to describe China’s foreign policy as “highly deficient” and even to question whether China actually has a foreign policy.⁹

Given these caveats, China does in fact have very clearly written foreign policy principles. The Five Principles of Peaceful Coexistence (

) were developed by the Chinese Communist Party in the 1940s as a basis for relations with the United States and articulated by Mao Zedong prior to the foundation of the People’s Republic in 1949.¹⁰ These included: mutual respect for territorial integrity and sovereignty; non-aggression; non-interference in others’ internal affairs; equality and mutual benefit; and peaceful coexistence. Though to Western ears these principles may sound like platitudes or somewhat outdated propaganda, they continue to define Chinese foreign policy today.¹¹ The objectives are less succinctly set in stone, but in July 2009 then-president Hu Jintao explained that China’s diplomacy “must safeguard the interests of sovereignty, security, and development.”¹² This is officially defined as meaning (first) domestic political stability; (second) sovereign security, territorial integrity, and national unification; and (third) China’s sustainable economic and social development.¹³ This can be usefully transcribed by applying Evan S. Medeiros’s summary as “fostering economic development, reassurance, countering constraints, diversifying access to natural resources, and reducing Taiwan’s international space.”¹⁴

These principles and objectives are tempered, then, by domestic necessities, and they must be considered in order to understand China’s approach to the rest of the world. The country and its single-party leadership are challenged internally by environmental degradation, systemic corruption, and growing social inequality and externally by regional tensions and disputes. Sustained growth within what Jiang Zemin in 2002 declared a “period of strategic opportunity” (

) is dependent upon social stability, continued scientific and industrial development, internal consumption combined with rising exports, the effective management of inflation and exchange rates, and a steady supply of raw materials for production and consumption. This has been reiterated by the Chinese leadership on multiple occasions, and Latin America has come to play a growing role in China’s drive to diversify its markets and its sources of supply.

China’s Relations with Latin America

China’s interest in Latin America has grown at a quick pace since the turn of th...

Table of contents

• Cover Page
• The Political Economy of China–Latin America Relations in the New Millennium
• Praise
• Title
• Copyright
• Contents
• Acknowledgments
• Introduction: The Political Economy of China–Latin America Relations in the 21st Century
• PART I Cross-Pacific Statecraft: Aid and Capital Flows from China to Latin America
• PART II Development Trends Since the Turn of the Millennium: A Critical Assessment
• Conclusion: Final Reflections on the China–Latin America Relationship
• Contributors
• Index