presentation for the dissertation
TRANSCRIPT
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China’s Strategic Partnerships in Latin America: Case Studies of China’s Oil Diplomacy in Argentina, Brazil, Mexico and
Venezuela, 1991 to 2015
February 10, 2016
Yanran Xu许嫣然
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Puzzle and Research Questions
Some applaud the changing foreign policies and the win-win objective of both sides, and portray China as a successful model for developing countries.
Others depict China as a rising imperial power, scrambling for the resources and as a competitive threat to Latin America.
Research Questions (from a Chinese perspective)• What does it mean for China to establish SPs with Latin American
countries in practice from 1991 to 2015?• To what extent is there convergence/divergence among SPs in
terms of rhetoric and/or in practice? /Are SPs one-sided in favor of China or in favor of particular Latin American countries?
Puzzle (“How Strategic SPs Are” is an Open Question)
The Golden Triangle: NOCs (Sinopec, CNOOC and CNPC), the state and quasi-commercial institutions
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Literature Review• Realism: hegemonic challenge• Dependency theory: dependent
development• Liberal IPE: economic interdependence• Constructivism: Ideology; alternative development model
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Methodology, Methods, Case Selection
• A case study methodology from 1991 to 2015
• Comparative method• Qualitative (primary): structured, focused
comparison, content analysis, archival and secondary source research. • Quantitative: macroeconomic data.
• Cases: Argentina, Brazil, Mexico and Venezuela
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Operational IndicatorsThe research outcome or the DV: the balanced deal between China and a Latin American country Operationalization:
—Equitable market access of companies from each country in trade areas;
—China’s foreign direct investment (FDI) for infrastructure;
—China’s portfolio investments/credits/loans;—The employment of Chinese-sponsored
construction or infrastructure projects
The research predictors or the IVs (Operationalization): Hypo 1: If a Latin American country is geopolitically close to the US, then it will gain a more balanced deal from China. (Self-assessed by U.S policymakers)
Hypo 2: If a country in Latin America is more economically interdependent with China than with the US, it is more likely to get a balanced deal from China. (the proportion of trade from a Latin American country to China and the US as the percentage of its total trade)
Hypo 3: If a Latin American country has a diversified economy and is less dependent on a single sector, then it is more likely to gain a balanced deal from China. (The overall GDP by sectors)
Hypo 4: If a country in Latin America has a left-leaning regime that shares common ideological commitments, with China instead of the U.S., then it will receive a more balanced deal from China. (A country’s dominant ideological orientation as articulated by the country’s key ruling elites and/or political party or parties)
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Brazil’s oil production counts for 33% in Latin America(Petrobras); China became the major oil export destination in 2010, including oil
exploration and technology research
Domestic lobby groups and corporate interests
Double–edge Sword: relatively diversified but still Concentrate on soybeans, oil, iron ore;
competition in manufactures, low- and high-tech in the local and third markets
China became the largest trading partner in 2009
Lula’s diversification of diplomatic relations since 2000s
Case Study-Brazil (1993)
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Venezuela (2001)
Venezuela’s oil production counts for 24% /90% of its exports is CRUDE oil;China: Loans for Oil
Domestic web: The Venezuelan government dominates the economyPDVSA controls the oil industry (The government-PDVSA Strategy)
Concentration on a single sector: OIL
China became the second-largest trading partner in 2009
Chavez’s intensified friendship with China after 1999
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CDB loans to Venezuela from 2008 to 2015 (over US$ 56 billion)
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Mexico (2003)
Mexico’s oil production counts for 26% (Pemex);since Dec 2013, energy reform
limited cooperation with China: mostly service contracts
Domestic financial oligarchy (large entrepreneurs) has high level of consensus with the government + the China Threat
Mexico (Nieto and PRI) does not have a long-term strategic vision toward China;
to prioritize the economic insertion into North America;to diversify economic exchanges with the EU and within the region
Diversified economic exchanges like electrical equipment, minerals, and metals;
but facing fierce competition in both local and third markets
China became the second largest trading partner in 2003, behind the US
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Argentina (2004)
Argentina’s oil production counts for 8.7% /sufficient in oil supply but also import oil products like Mexico/the new Hydrocarbon reform in 2014;
CNOOC and Sinopec have joint ventures with companies like YPF (renationalized in 2012 in 51% stock share by the government), PAE and
Bridas in oil supplies and oil fields operations
Domestic interest groups and protectionist policies against China
Concentration on soy complex & crude petroleum
China became the second largest trading partner by 2009
A friendly political-ideological scenario with two Kirchners’ governments since 2003
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Findings: Empirical
Increasing trade and
cooperation;the largest
public creditor(Venezuela>Brazil>Argentina>Me
xico);
FDI:-mainly
Resource seeking;
-market seeking;-efficiency seeking
Interdepen-dent yet asymmetrical• Trade deficits• Bilateral trade
flows unbalanced: e.g.
• competition• Few
investments in China
Export dependency (2008-2014)• Brazil:
increased and high
• Venezuela: highest
• Mexico: increased but lowest
• Argentina: fell, but
• high
Trade frictions;Social & environ-
mentalConflicts;
Labor tensions
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Findings: Theoretical • Realist: all four countries have strategic importance to China
+ China’s Energy/food security/profits.• Dependency theory: China has deprived Latin American
countries control over their own strategic assets; a renewed cycle in which the region becomes overly dependent on primary products. –Hamper the competitivenes
• Liberal IPE: Partnerships are asymmetrical but not an absolute zero-sum game.
• Constructivist: ideology does play a role in China’s strategic partnership toward leftist countries in Latin America + China-carefully dealing with the US.
• The SPs are characterized by a positive sum game with unequal gains of trade, and obviously, China is benefiting more from the whole region than vice versa.
• Rather than blaming China, Latin America should build on some of its own recent success, and it is time to design proactive rather than reactive policies.
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Findings: Analytical•Brazil: a leading role both regionally and globallyincreasing China’s political and economic presence/South-South cooperation/leverage (attracting investments)new path of high-tech transfer + renewable energy cooperation•Venezuela:at a crisis point+ solely relying on China’s support with the least leverage + China needs reconsideration•Mexico: a high trade deficit + a failure to attract more Chinese loans than Ecuador and the Bahamas. Compare to Brazil, Mexico’s influence on China appears to be faint(lack of strong institutions/academia/private sectors focus solely on China)
firmly in the US sphere of influence.•Argentina: it does not hold a similar rank(second) relative to China (compare to Brazil)vulnerable to external shocks and financial technical defaultbiofuel energy
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Thank you!