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

Focus China-Latin America relations, interests and aims. Two moments: 2004 and 2015 (dynamic research object – issue of change) Point of exit is three typologies, all South American (types of countries), based on three elements. Aim is China-LA relations broadly. Research in progress. Typologies are not theories but a useful way to organize my/one’s thoughts

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

A broad approach is suggested: relations, interests and aims A) Economic relations. B) Geopolitical issues C) China’s aims, interests and strategies. D) Latin American aims, interests and strategies. Dynamic analysis comparing two moments – 2004/2015.

My aim To analyze: Do China-LA relations, strategies and aims differ according to LA country types? (The analysis is based on a systemic, historical structural conception of development and international relations (Wallerstein; Latin American historical structuralism). Importance of own strategies for development. Concept of ”internal-external situations” (Cardoso/Faletto).)

3 Typologies Brazil Venezuela(Ecuador, Bolivia) Chile(Colombia, Peru) Though the typologies are all South American, it is assumed that this typological approach can be generally useful in analyzing China-Latin America relations, interests and aims – through comparison on the three elements/dimensions.

Typologies are based on 3 elements 1. Economic policy orientation. 2. Foreign policy orientation. 3. Development model – economic (production) structures.

China-Brazil 1. Intermediate economic strategy: Orthodox/Heterodox. 2. National autonomy through diversification. Seeks multipolarity and influence. Based on a critical ”world vision”. Seeks to change global power balances through South-South cooperation and coalitions, e.g. with China: a ”similar country”/Great Peripheral Countries. 3. The most diversified economy, but increasingly natural ressource based. The biggest economy in Latin America.

China-Venezuela (Ecuador and Bolivia) 1. The most heterodox – economic strategy. Strongly interventionist state. 2. National autonomy and multipolarity. Strongly anti-hegemonic. Anti-US and Anti- neoliberal. 3. ”Mono-cultural” economic model. Neo- extractivism.

China-Chile (Peru and Colombia) 1. The most orthodox economic strategy. Liberalism. 2. Liberalism. Diversification. Open regionalism + post-hegemonic regionalism. Emphasis on economic aspects. Bilateral FTA with US, China etc – part of TPP. 3. An intermediate level of economic diversification. Natural ressource emphasis.

Other countries (%) Can be analyzed with reference to the three elements in the typologies. Mexico and Central America have development models that differ from South American models in terms of production structure/specialization. Uruguay is a small economy largely based on agricultural specialization. Paraguay as well, but with a weaker industrial base than Uruguay. Argentina is more diversified than Uruguay and Paraguay – and is more heterodox in economics and foreign policy.

China-Brazil: Relations, strategies and aims 2004: Brazil initially very enthusiastic about China’s rise. Global politics – alliances with ”similar countries.” Growing trade and improved export prices. Helps Brazil stabilize and grow economically. However, skeptical and critical attitudes from industrial interest organizations. China interested in Brazilian resources (oil, steel, soy, food) and market. Initially not very interested in the political dimension due to priority to relations with the US.

China-Brazil: Relations, strategies and aims 2015: Brazil’s view much like in 2004, although there is now a greater worry about the North-South pattern of economic interaction. Not so similar after all. Still a hope that Chinese investments will be useful, still a hope for better access to Chinese market for products with higher value added. Emphasis on BRICS and South-South, but Brazil may change foreign policy orientation towards a greater emphasis on Latin America, Europe and the US. Volatility in export prices to China have revealed fragility of excessive dependence on ”ressources” and Chinese market. Economic crisis – risks of a ”jump backwards” in terms of economic model. ”Shared gains”?

China-Brazil: Relations, strategies and aims China 2015: Interests largely revolve around access to Brazilian natural resources (Soy, Iron) and markets. More FDI in Brazil related to this. Enhanced focus on the ”win- win” discourse and rhetoric - which is increasingly difficult to ”sell”. China-CELAC – seeking image as a ”friend” of Latin America that really wants to assure ”win-win”. More focus on South- South coalition – BRICS – as a tool to enhance influence. This may not be a lasting emhasis. Hegemonic strategy of influence in all regions and influence through structural economic power (and diplomacy)/or just focus on economic interests and aims?

China-Venezuela relations 2004: Great enthusiasm in Chávez government (Bolivia and Ecuador later, though Bolivia less connected to China economically). Autonomy enhancing. China as an opportunity – prices, trade, investment and common projects. Anti-hegemonic intention on the side of Venezuela. 2015: same situation as in However, development outcomes vary (V/E/B) despite common experience of volatility of ”ressource/export prices”. (Own strategies; Venezuela’s use of windfall profits is less productive than e.g. Bolivia’s)

China-Venezuela relations 2004: China’s main interest is oil (mining in Ecuador, too). Rhetoric: not a challenge to US influence. 2015: In practice China’s influence grows due to its growing economic presence and due to cold bilateral relations between US and Venezuela. China’s interest remains focused on ”natural ressources” for import. Much more FDI and financing (V + E especially). (local conflicts in mining – Ecuador). Win-Win discourse. Continued financing of V? China’s ”support” for and financing of Venezuela (and Ecuador) more based on economic interests than on ideology. However, ideology faciliates growing Chinese influence (V, Ec, B). Particularly Venezuela (but also Ecuador) is increasingly dependent on China.

China-Venezuela: characteristics of their mutual relations and aims. North-South pattern of economic relations. 2015: Issue of growing dependency and risks to autonomy – Chinese rhetoric: ”Win-Win”. Different from US (solidarity). In reality we can observe a potentially risky development for Venezuela. It remains to be seen if Bolivia and Ecuador will be able not to grow as dependent on China as Venezuela.

China-Chile (Peru and Colombia): Relations, interests and aims. 2004: Chile (Peru and Colombia) very welcoming of China as a way to diversify and grow the economy + strengthen autonomy. Emphasis is on economic relations. 2015: China has become Chile’s greatest trading partner and export destination. Chile has not been successful in attracting Chinese FDI (contrary to Peru and Colombia – mines in Peru; local conflicts around mining investments - Peru). Positive developmental outcomes, though volatility in export prices is also relevant for these countries.

China-Chile (Peru, Colombia): Relations, interests and aims and 2015: China interested in copper imports and in Chilean export market (mining and oil Peru/Colombia). FDI not strategically important for China in Chile (no oil, copper not particularly open sector). China interested in mining investment in Peru, infrastructure in Colombia and Peru. Win-win discourse (largely accepted in these countries).

General for the three typologies China’s aims seem to be general in nature: Access to needed natural resources (main aim) and export markets. FDI associated with these same aims. Financing with same aim and potentially also as a way to assure acceptance of ”win-win” discourse. Interest in influence and a good image largely associated with the economic aims described. Potentially also connected to geopolitical ambition of growing influence in all world regions (hegemony?)

Other countries (%) Mexico: China mainly seen as a threat (from competition in Mexican and Third Markets (US). Central America: Same as Mexico – though some individual differences appear. Costa Rica – particularly close relationship. Nicaragua – canal project. 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 than other Atlantic South American countries.

Conclusions and Synthesis: China-Latin America Relations Relations between China and Latin America have gone from being rather insignificant some 15 years ago to being very significant now for almost all of Latin America. Economic relations follow a North-South pattern today. Trade composition/capital exports (FDI and lending). Shared gains? Or are we rather seeing growing dependency and cementation of ressource-based models of development?

Degree of Chinese interest/relations with Latin American countries Especially strong relations with a few countries – 5-6: Brazil, Chile, Argentina, Peru, Venezuela (Mexico). General interest in natural ressource imports, export markets (investment opportunities, FDI and financing – typically connected to same interest). Interest in a good image across the board. 1.Main interest is economic. 2. Influence: One China (Taiwan) and geopolitical competition with the US?

Conclusions and Synthesis: China-Latin America Relations China’s rhetoric regarding its relationship 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” rhetoric sums up this ”story”.

Conclusions and Synthesis: China-Latin America Relations The rhetoric is however increasingly out of sync with developments in the Brazil and the Venezuela typologies. They experience a regression in economic model and growing financial vulnerability and economic crisis. This leads to reconsideration (Brazil) and confusion (Venezuela) and growing China dependency. The Chile typology does better but experiences the same North-South economic relationship. The rhetoric has not been very convincing in Mexico and Central America, perhaps with Costa Rica as an exception. Hopes: Mexico, Nicaragua, others?

Conclusions and Synthesis: China-Latin America Relations China’s real aims are to pursue their core interests in promoting their economic model dominated by urban areas and manufacturing production and exports, moving up the value-chain and going global + at the same time secure access to needed natural resources, largely in Africa and in South America. The good and friendly image China promotes is meant for international ”consumption” and the legitimacy of China’s external relations that would allow the continued ”economic rise” and, perhaps, the ”political rise” of China as a superpower and a potential hegemon/or key economy of the global system: Return of the ”Middle Kingdom”?/hegemonic power?

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 important predictor of the national characteristics of China- Latin America relations. China does not seem particularly concerned with the economic policy element nor the foreign policy element of Latin American countries.

Conclusions and synthesis Brazil and the Venezuela typology don’t only focus on the economic dimension, but also the geopolitical dimension in their way of relating to China. Economic developments and changing domestic political constellations and ideas/interpretations may alter the approach to China.