Over the past decades, China has significantly enhanced its national strength and arisen as the second largest economy in the world. Meanwhile, Beijing has become enthusiastic for developing South-South relations through bilateral and multilateral mechanisms. China\u2019s economic expansion across the Global South has gone parallel with the crisis of neoliberal model of development, which is incapable of generating new growth momentum. What are the strategic calculations and motivations behind Chinese engagement with the Global South? What are the domestic and international implications of the increasing Chinese presence in developing nations? This article tries to tackle these questions based on evidences form Latin America.<\/p>\n\n\n\n
Compared with well-established links with neighboring Asian countries and with Africa, China\u2019s ties with Latin America has started attracted worldwide attention in the recent decades. With China\u2019s entrance in the World Trade Organization in 2001 and its modernization drive for domestic need, China\u2019s trade with Latin America increased dramatically. After the global economic and financial crisis in 2008, Chinese capitals, in the forms of loans, aids and investments, have founded their way into the region carving the niches in the areas of energy, agriculture, infrastructure, manufacture, high-tech and information industries, etc. In addition to the more frequent high-official leaders\u2019 visits, bilateral and multilateral engagement, Chinese government issued two policy documents on Latin America in 2008 and 2016 respectively, giving expression of Beijing\u2019s strategic importance towards the region. Along with the complex international environment, the relationship between the two partners across the Pacific has entered unprecedentedly dynamic and plural era.<\/p>\n\n\n\n
In the post-war period, there was scant official contact between China and Latin American governments. Except Cuba, the rest of the region showed no interest in China for two decades as the result of ideological hostility. In the name of \u201cMonroe doctrine\u201d, Latin America was within the sphere of influence of the United States. The American embargo on trade with Communist regime discouraged its \u201callies\u201d from engaging with China. The geographical distance and cultural ignorance also imposed barriers to commercial exchanges and establishing trust. Besides, both China and Latin America were underdeveloped Third World economies, stumbling with domestic problems and regional affairs.<\/p>\n\n\n\n
The Sino-Soviet dispute in the 1960s led to a significant shift in Chinese foreign policy. In order to gain greater political and economic independence, China was abandoning its Cultural-Revolution-era view on foreign relations, making it much more pragmatic and flexible. Chile\u2019s recognition of the People\u2019s Republic of China (PRC) can be interpreted as a transition from ideological moment to politics \u2014and economy\u2014 oriented period. In 1970, weeks after the presidential inauguration, Chile\u2019s President Salvador Allende, as head of a socialist-communist coalition, established diplomatic relations with China. When Allende was overthrown three years later by the anticommunist military government of General August Pinochet, Beijing did not hesitate to recognize the new regime. Within a few years, the governmental and non-governmental links had return to pre-coup levels [1]<\/a>1 \u2014 Mora, F. (1997). \u201cThe People\u2019s Republic of China and Latin America: From Indifference to Engagement\u201d. Asian Affairs: An American Review, 24 (1): 35-58.\n<\/span><\/span>. From then on, China started to build diplomatic and economic relations with Latin American governments, no matter what their ideological or political affiliation are. This process was accelerated by two major events in the history, which changed completely the global politics: Sino-American rapprochement and PRC\u2019s entry into the United Nation.<\/p>\n\n\n\n The \u201cthird worlds\u201d theory presented not only a political project against the hegemony of the two superpowers, but also a non-Western way to understand the dynamics of world politics. The desire of Latin American governments to diversify their political and commercial relations facilitated Chinese promotion of closer relations with the region<\/p><\/blockquote>\n<\/div>\n\n\n\n Although the key South American governments, Brazil and Argentina, recognized PRC after U.S. President Richard Nixon\u2019s historic visit to Beijing, the specific timing of the development of Brazilian and Argentine relations with China \u201cowes more to the South American countries\u2019 attempt to balance U.S. power in the sub-region than to their following U.S. leadership\u201d [2]<\/a>2 \u2014 Catalinac, A. et al. (2006). China\u2019s Relations With Latin America: Shared Gains, Asymmetric Hopes. Hemisphere.\n<\/span><\/span>. In 1974, Chairman Mao presented his \u201cThree Worlds\u201d strategy, stating that all Asia but Japan, Africa and Latin America belong to the third world, the developing world. The \u201cthird worlds\u201d theory presented not only a political project against the hegemony of the two superpowers, but also a non-Western way to understand the dynamics of world politics. The desire of several Latin American governments to diversify their political and commercial relations facilitated Chinese promotion of closer relations with the region. From the Chinese side, after long exclusion and isolation from the postwar international system, China was eager for sources and markets to heal the desperate condition of its economy. On the other hand, Beijing also tried to gain Latin America\u2019s favor \u201cby championing North-South economic issues, emphasizing South-South cooperation, and supporting various issues of regional and economic interest to the leadership in Latin America\u201d [3]<\/a>3 \u2014 Mora, F. (1997). \u201cThe People\u2019s Republic of China and Latin America: From Indifference to Engagement\u201d. Asian Affairs: An American Review, 24 (1): 35\u201358.\n<\/span><\/span>.<\/p>\n<\/div>\n<\/div>\n\n\n\n With the economic development as the top priority, China\u2019s attempt to broaden foreign relations was more motivated by its need and desire to expand economic links with different countries and regions. Latin America was not only a potential market for Chinese products, but also a vast territory with abundant natural resources which could fuel China\u2019s economic growth. The foreign trade became the most important pillar of China\u2019s new development strategy, which facilitated and accelerated domestic industrialization. The Chinese \u201cgoing-out\u201d policy, initiated in 1999, is a national strategy to encourage its enterprises, especially the state-owned ones, to invest overseas. In Latin America, China\u2019s outward Foreign Direct Investment (FDI) went into massive resources-related infrastructure projects. A combination of outgoing FDI and policy bank loans coming from the China Development Bank and the Export & Import Bank of China entered various Latin American countries for building ports, roads, railways, dams, and nuclear power plants<\/p>\n\n\n\n Since the entrance of China in the WTO, the largest emerging economy began with a super circle of growth that endured until the 2008 financial crisis. The commodities boom made China a major trading, investing and lending partner which helped Latin America sustain its growth even after the 2008 economic crisis. Meanwhile the region became the most dynamic trading partner of China because the rich primary resources and market opportunities in Latin America could propel China\u2019s growth and development. In addition, the external environment also contributed to the Sino-Latin American relationship. After the 9\/11 attack, the United States, troubled by the wars in Middle East, was too busy with international anti-terrorism campaigns to watch over Latin America [4]<\/a>4 \u2014 Zheng, B. et al. (2019). “Sixty Years of Sino-Latin American Relations: Review and Reflection, in Sino-Latin American Economic and Trade Relations”. Springer: 1\u201333.\n<\/span><\/span>.<\/p>\n\n\n\n Due to China\u2019s involvement in the global economy, Latin America, particularly South American countries, have benefitted from a super cycle of high commodity prices fueled by China\u2019s yearly growth of 10% in the noughties. In terms of investment, the presence of Chinese firms in the region was very modest before 2010 and mostly they were concentrated in Peru, Ecuador or Venezuela. Since 2010, several large acquisitions and investment projects have been announced and Chinese multinational companies have maintained a relevant presence in several largest economies of the region. In terms of the distribution, Chinese investment flows usually enter Brazil, Peru, Argentina, Ecuador and Venezuela.<\/p>\n\n\n\n However, since the beginning of the second decade of the 21st century, growth has slowed down in China. Serving as world\u2019s factory for decades, China suffered environmental consequences, which pose real challenges for its sustainable growth. Beijing had to abandon the traditional model of blindly pursuing GDP growth and started to transform into \u201cecological civilization\u201d. Latin America meets the needs for Chinese capitals in seeking for expanding investment abroad, reducing excess capacity, and large consumer markets.<\/p>\n\n\n\n Serving as world\u2019s factory for decades, China suffered environmental consequences, which pose real challenges for its sustainable growth<\/p><\/blockquote>\n<\/div>\n\n\n\n In turn, China can contribute to closing the region\u2019s gap in infrastructure, logistics and connectivity, which would stimulate the emergence of regional value chains. Apart from the traditional sectors such as extractive industries, power generation, agriculture and infrastructure, recently Chinese investors, state-controlled or private companies, have diversified their investing profile, setting foot in high-tech and service industries. Quantitatively, they cannot compete with those large oil and mining companies, but they are breaking free from the traditional sectoral approach and carving niches for more diversified Chinese investments in the region.<\/p>\n<\/div>\n<\/div>\n\n\n\n The Washington Consensus refers to a set of economic policies as an attempt to help crisis-wracked developing countries. The ideas were promoted by International Monetary Fund, the Word Bank and the U.S. Treasury and recommended structural reforms that enhanced free market in exchange for financial aids. The U.S. prescriptions served as material and ideological nexus between the periphery and the center led by the United States. However, since the 2001 economic crisis, the Latin countries have suffered from privatization, deregulation and unilateral liberalization of finance. The rise of several left and center-left governments over a course of nearly a decade brought back the role of the state and strengthened its functions [5]<\/a>5 \u2014 Vadell, J. (2019). \u201cChina in Latin America: South-South Cooperation with Chinese Characteristics\u201d. Latin American Perspectives 46 (2): 107-25.\n<\/span><\/span>.<\/p>\n\n\n\n On the other side of the Pacific, Chinese peaceful rise has challenged the deterministic liberal theory as the only approach to development. The conventional mechanisms of neoliberalism, such as private ownership, financial and political liberalization are not key components of China\u2019s path to growth. When the Communist Party of China established the regime by defeating Kuomintang in the civil war, China eradicated imperialist domination and confiscated foreign property without negotiation in order to gain complete economic sovereignty, which laid foundation for national industrialization. The land and social reforms cleared up the obstacles from the established interest groups for subsequent economic reforms. Since \u201creform and opening up\u201d in 1978, China has started to move from self-reliance and self-sufficiency to an open-door approach based on international exchange, foreign investments, and the introduction of advanced science and technology. China\u2019s development mode was based on trial-and-error under the unique international and domestic context. Although China\u2019s model may not be easily copied by other economies, it does demonstrate that the liberal democracy is not the precondition for growth. China\u2019s achievement is not attributed to \u201cblindly following a set of ideological prescriptions but to solving a series of serious crises with flexibility and imagination\u201d [6]<\/a>6 \u2014 Zhang, Y. et al. (2019). \u201cRewriting China\u2019s Recent History: Fluctuations in State Economic Control, 1949\u20131984\u201d. American Journal of Economics and Sociology 78 (5): 1071\u20131100.\n<\/span><\/span>. <\/p>\n\n\n\n However, other developing countries are usually influenced by the ideological soft power of Western world and their policy makers and opinion leaders simply attribute the problems to the backwardness of their own political systems, which are not as progressive as those of the developed countries. Thus, there are various \u201ccolor revolutions\u201d promoted in the name of \u201cdemocracy\u201d and \u201cfreedom\u201d, which turn economic and social conflicts into political conflicts. That is why China does not impose any political conditions or development models in exchange for foreign aid or investment. This flexible way has enabled China to maintain friendly relations with politically diverse nations while pursuing its objectives. It is Beijing\u2019s belief that economic cooperation should take precedence over political divergence and that the former\u2019s success would promote political relations. This strategy has perpetuated through the 1990s as well as in the new millennium.<\/p>\n\n\n\n Beyond bilateralism, China also engaged in official multilateral channels, such as Rio Group, Mercosur, and other regional organizations via dialogue and consultation mechanisms. In a broader sense, Latin America witnessed a shift away from the preponderant role of Western countries including Japan to \u201ca dominant PRC, which came from a negligible presence to account for 50% of the trade in 2010\u201d [7]<\/a>7 \u2014 Asian Development Bank and Inter-American Development Bank (2012). Shaping the Future of the Asia and the Pacific\u2013Latin America and the Caribbean Relationship.\n<\/span><\/span>.<\/p>\n\n\n\n In 2008, China released its first ever policy paper on Latin American and the Caribbean, clarifying China\u2019s principles and goals for developing relations with Latin America. It was the first time to state clearly in an official document that Beijing regards Sino-Latin American relations from the level of \u201cstrategic cooperation\u201d and that China is devoted to developing \u201ca comprehensive partnership featuring equality and mutual benefits\u201d. Moreover, the 2008 economic crisis rendered United States and European countries troubled with their own domestic situation. China is the one of the few countries which has sustained the economic momentum and helped Latin America to overcome the global crisis.<\/p>\n\n\n\n Since Xi Jinping has taken his presidency in 2013, the Chinese foreign policy has taken a more active and assertive profile. Xi is more willing to go beyond the bilateralism and strengthen the relationship with Latin America and the Caribbean as a whole. With only three years in his presidency, Xi had already visited the region on three occasions. The first one took place only two months after his presidency began. He visited Mexico, Costa Rica, Trinidad and Tobago, and arranged high level meetings with officials in Antigua, Barbuda, the Bahamas, and Jamaica. It is important to note that the Caribbean countries are not traditional destinations of Chinese presidents. Thus, Xi\u2019s visit suggests a strategic purpose of increasing China\u2019s influence in that sub-region. By doing so, Beijing can also squeeze the space for countries that still have official relations with Taiwan in view of the fact that Latin America, especially Central America and the Caribbean, is a major arena of diplomatic competition for Beijing and Taiwan. After the pro-independence party came into power in Taiwan, Beijing terminated the \u201cdiplomatic truce\u201d. And then Panama, Salvador and Dominican Republic severed their official relations with Taiwan and switched them to Beijing.<\/p>\n\n\n\n Only one year later, in 2014 Xi made the second trip to Brazil, Argentina, Venezuela, and Cuba. During the visit, Xi proposed a new cooperation framework for China and Latin America, which translated later into China-CELAC (abbreviation in Spanish, Comunidad de Estados Latinoamericanos y Caribe\u00f1os) Forum. The Forum reflects Chinese way of dialogue mechanisms based on \u201cnon-binding agreements, voluntarism and consensus, derived from the tradition of South-South cooperation\u201d. The flexible institutional structure allows China to \u201ccombine multilateral and bilateral approaches, creating a highly adaptable blueprint for managing foreign relations on a regional scale\u201d [8]<\/a>8 \u2014 Jak\u00f3bowski, J. (2018). \u201cChinese-Led Regional Multilateralism in Central and Eastern Europe, Africa and Latin America: 16 + 1, FOCAC, and CCF\u201d. Journal of Contemporary China 27 (113): 659\u201373.\n<\/span><\/span>. Moreover, the agenda of Sino-Latin American cooperation has transcended the traditional economic sphere and gone into sociocultural, political, and even security matters. This tendency is well demonstrated in the second Chinese policy paper on the region.<\/p>\n\n\n\n Latin America can carve a niche in China\u2019s complete industrial chain and massive market, which are open to both public and private sectors of all economies as long as they abide by China\u2019s territorial integrity, mutual respect and mutual gains<\/p><\/blockquote>\n<\/div>\n\n\n\n Additionally, China actively seeks support from countries in the region for its new multilateral institutions. Chinese official discourse calls LAC a \u201cnatural extension\u201d of Belt & Road Initiative (BRI), and LAC countries are beginning to endorse BRI in an effort to gain access to infrastructure financing. Today\u2019s world has witnessed a tendency to protectionism and reverse globalization. With the decision of the Trump administration to tear up the Trans-Pacific Partnership (TPP) agreement, the TPP members in LAC, namely Chile, Mexico, and Peru, pivot more toward China. The renegotiation of the North American Free Trade Agreement (NAFTA) around its \u201cAmerica first\u201d pledge may further boost Chinese engagement with the region [9]<\/a>9 \u2014 Wise, C. and Chonn, V. (2017). \u201cConceptualizing China\u2013Latin America Relations in the Twenty-First Century: The Boom, the Bust, and the Aftermath\u201d. Pacific Review 2748: 1-20.\n<\/span><\/span>.<\/p>\n<\/div>\n<\/div>\n\n\n\nCommodities Boom and afterwards<\/h5>\n\n\n\n
Washington Consensus and China\u2019s Model<\/h5>\n\n\n\n
Multilateralism and the U.S.<\/h5>\n\n\n\n