POLITICAL ASPECTS OF CHINESE INVESTMENT IN LATIN AMERICA

Abstract

For some, China’s increasing economic interdependence with Latin America, coupled with its extensive political relations and diverse other ties with countries in the region, herald a new regional, and perhaps even global, political and economic order with respect to bilateral political relations, international institutions, and the place of the United States. The literature on the political economy of national security, though, suggests we should be cautious about assuming a direct correspondence between economic stimuli and political behavior. This article probes what exactly is happening through an analysis of the politico-economy of China’s investment relations with Latin America, focusing on the cases of China-Brazil and China-Venezuela ties. It finds that political variables play a crucial role in illuminating Brazil and Venezuela’s stances towards China and that even broad and deep economic relations with China do not eliminate serious frictions with it or self-interested behaviors by Brazil and Venezuela. Furthermore, it shows that China considers a variety of non-economic factors when determining the nature of its relationship with these two Latin American states. In short, Chinese investment in Latin America, even layered on top of massive trade ties, does not seem to be having transformative political effects contrary to more sensationalist accounts.