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.
China’s Rise: Centripetal or
Centrifugal tendencies?
• In the context of the 1990’s: Centripetal
tendencies in Latin America.
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”Open regionalism”.
Insertion focus on US/OECD/North.
Economic orthodoxy.
Search for ”credibility”.
• China (India) rises but remains ”small”
China’s Rise: Centripetal or
Centrifugal tendencies?
• In the context after year 2000/2003: Centrifugal
tendencies in Latin America.
• ”Post-neoliberal” regionalisms emerge alongside
”open regionalism”
• Insertion focus: Diversification (mainly)
• Economic orthodoxy or heterodoxy
• Search for ”autonomy” (and influence)
• China (India) becomes ”big”/rises.
Analyzing China-Latin America
Relations: Comparative approach
• Creation of three ”typologies” for comparison
• Brazil, Venezuela and Chile represent
typologies.
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Three criteria for typology creation:
1. Economic orthodoxy/heterodoxy.
2. Economic model (production profile).
3. Foreign policy orientation (regionalisms)
Typology 1
• Venezuela:
• 1. Heterodoxy (with orthodox elements)
• 2. Natural ressource based economy with
”monocultural” tendencies (oil dependency)
• 3. Aim of autonomy through diversification,
multipolarization. Anti-US/imperialism. SouthSouth alliances. ALBA, Unasur, CELAC,
Mercosur, OPEC (including several ”anti-US”
governments), China.
Typology 2
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Brazil
1. Heterodoxy and orthodoxy combined.
2. Diversified economy
3. Aim of autonomy through diversification,
multipolarization. Influence. South-South
alliances. Unasur, Mercosur, CELAC, China,
BRICS, Global player included in the top of the
global hierarchy + regional leadership.
Typology 3
• Chile
• Economic orthodoxy with a ”social orientation”.
• Intermediate economic model based largely on
natural resources of different sorts. Value-adding.
• Autonomy. Diversification through a liberal
strategy with a strong focus on economic
dimension (USA, EU, China, South Corea,
Mercosur, Israel etc. etc. etc.). Unasur, CELAC,
Pacific Alliance, Trans Pacific Partnership.
Typologies
• 1. Includes Bolivia and Ecuador.
• 2. Partially includes Argentina.
• 3. Includes Colombia and Peru
• Mexico and Central America fall somewhat
outside of the typologies. Mexico will be
drawn into the analysis through comparisons
with category 2 and 3, though Mexico is
specialized in manufacturing production.
Analysis from Chinese and Latin
American perspectives
• In terms of the economic dimension, ChinaLatin American relations follow relatively clear
patterns.
• The analysis will mainly focus on the economic
dimension.
Chinese perspective
• China’s interest:
1. Natural resources/commodities imports. Oil is
particularly prioritized (Metals, food, foodstuff).
• 2. Export markets for Chinese manufacturing.
Chinese
• 3. FDI (from 2010 mainly). Mainly in prioritized
natural goods sectors and in infrastructure and
energy. Also some interest in manufacturing
sector. This interest is likely to rise.
Chinese perspective
• Interest particularly directed at:
Brazil, Argentina, Chile, Venezuela, Ecuador.
• Geopolitical aspect: BRICS. Good relations with
Latin America and Caribbean (Africa) (etc.). Avoid
barriers for China’s economic rise. Basis for
potential regional hegemony (Asia) and influence
in other regions. Reduce US/Western power
superiority (”shared order).
Typology based comparative analysis
of Latin American perspectives
• Rise of China, Great peripheral countries, 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.
• Huge challenge for Mexico and Central America
as their economic models are not very
”complementary” to China’s economic model.
Competitive pressure.
Analysis
• For South America ”complementary” aspects of
economic models: China demands primary sector
imports. Significant improvements in terms of
trade for typology 1, 2 and 3 countries allow for
economic dynamism and economic stabilization +
reduced external economic vulnerability.
• Context of ”optimism” in typology 1, 2 and 3
countries in South America between 2000/2003
and 2008.
Analysis
• Some critical voices (particularly from industry, and
academia). The nature of the ”Chinese system” of
state/business coop. Danger of ”de-industrialization” and
”re-commodification” (particularly Brazil; and Argentina).
Some ”sino-phobia” as in Mexico.
• 2009-2013. Optimism and China-enthusiasm is largely
maintained. 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 reducing external economic vulnerabilities.
Growing dependency of China, particularly in typology 1 (2)
Analysis
• Typology 1: Venezuela (Ecuador). Economic instability
(negative growth, high inflation). Negative growth in
Venezuela. Cut-backs in public spending.
• China as ”lender of last resort”. Venezuela facing deep
problems from domestic and external sides.
• Domestic economic instability – political instability.
• US sanctions policy towards Venezuela. Attempt at
destabilizing the Venezuelan regime. US strategy of reasserting its regional leadership position.
• Venezuela: weakness and high level of external economic
vulnerability. Question: Stability of Chinese financial
support? Hoping for Chinese FDI and financing.
Analysis
• Typology 2: Brazil faces economic stagnation and growing
domestic political discontent.
• Re-assessment of strategy of economic insertion in the
global economy. Looking more towards the North again –
US, EU etc.
• How can ”we” export more and strengthen the
manufacturing sector?
• Cut-backs in public spending due to economic stagnation.
• Hopes for Chinese FDI. (Mexico does not face a similar
problem. Still challenged by Chinese manufacturing sector
competition. Hopes for Chinese FDI; oil sector ”opening”)
Analysis
• Typology 3: Chile (Colombia and Peru).
• Chile faces the more adverse international context with
”volatility” in prices of commodity exports.
• It is more economically stable, with stronger
foundations.
• The enigma of ”missing” Chinese FDI in Chile. Hopes
for more FDI from China. (Mexico hopes for FDI, too).
Final observations
• For China the main typolocy category of
relevance for Chinese interests is category 2 –
”economic model”.
• Category 1 – economic strategy and category
3 – foreign policy are not very important for
China.
Final observations
• For Latin America category 1 countries face major
economic challenges of dependency/vulnerability.
Category 2 countries also face such challenges, but to a
smaller extent. Category 3 countries are more stable
but do face challenges from adverse ”terms of trade”.
• Mexico and Central America face continued challenges
from Chinese competition.
• At the moment all categories want more Chinese FDI.
• If this situation persists I would expect re-orientations
in development strategies (economic/foreign policy).