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Latin American Geopolitics and strategies of insertion in the global economy in the context of China

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Title: Latin American Geopolitics and strategies of insertion in the global economy in the context of China


1
Latin American Geopolitics and strategies of
insertion in the global economy in the context of
Chinas 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
Chinas Rise Centripetal or Centrifugal
tendencies?
  • In the context of the 1990s Centripetal
    tendencies in Latin America.
  • Open regionalism.
  • Insertion focus on US/OECD/North.
  • Economic orthodoxy.
  • Search for credibility.
  • China (India) rises but remains small

3
Chinas 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.

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

5
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.
    South-South alliances. ALBA, Unasur, CELAC,
    Mercosur, OPEC (including several anti-US
    governments), China.

6
Typology 2
  • 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.

7
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.

8
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.

9
Analysis from Chinese and Latin American
perspectives
  • In terms of the economic dimension, China-Latin
    American relations follow relatively clear
    patterns.
  • The analysis will mainly focus on the economic
    dimension.

10
Chinese perspective
  • Chinas 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.

11
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 Chinas economic rise. Basis
    for potential regional hegemony (Asia) and
    influence in other regions. Reduce US/Western
    power superiority (shared order).

12
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 Chinas economic model.
    Competitive pressure.

13
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.

14
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)

15
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 re-asserting 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.

16
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)

17
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).

18
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.

19
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).
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