The Inter-American Dialogue is pleased to publish this report by Iacob Koch-Weser, economic and trade policy analyst for the US-China Economic and Security Review Commission and former researcher at Wharton and Harvard business schools. A product of the Dialogue’s China and Latin America program, this report is the second in a series of papers examining China’s involvement in specific economic sectors in Latin America and the Caribbean (LAC). Having already profiled China’s mining interests in LAC, Koch-Weser now provides an in-depth overview of Chinese energy engagement in the region, drawing from existing English, Spanish, Portuguese, and Chinese literature on the topic.
The report finds that LAC is fairly marginal to China’s energy security, but factors into China’s efforts to “hedge” its energy acquisition strategies and establish a balanced portfolio of suppliers and assets. The literature also indicates that China’s national oil companies, though often supported by Chinese finance and other favorable arrangements, operate rather autonomously in Latin America, and according to profit-based motivations. Most specialists concede, moreover, that China is boosting aggregate global supply by investing in fringe producers and selling in the international marketplace, including in Latin America.
Koch-Weser concludes with suggestions for future research, including analysis of China’s post-acquisition strategies in LAC and assessment of China’s evolving approach to corporate social responsibility in the extractive sector.
The Dialogue’s aim in publishing this report, in addition to our China and Latin America working papers, is to inform and engage policy makers, civil society representatives, and academics from China, Latin America, and the United States on evolving themes in China-Latin America relations. By providing up-to-date analysis on central themes in China-LAC relations, we aim to promote constructive engagement in the region’s extractive and other sectors.
Our China and Latin America Working Group, of which Koch-Weser is a member, has been a centerpiece of the Dialogue’s China-related programmatic efforts since it was launched in 2011. The group is made up of approximately thirty select policy makers, analysts, and scholars from Latin America, China, the United States, Europe, and Australia. Group meetings generate diverse interpretations of the issues driving China- Latin America relations, highlight opportunities for cooperation, and address emerging challenges. Previous China program papers and reports have dealt with a wide variety of topics including Chinese state-to-state financing in Latin America, China’s free trade agreements in the region, energy-based engagement and cooperation, Latin America’s role in renminbi internationalization, and the US-China-Latin America “triangular” relationship.
We are pleased to recognize the Open Society Foundations, the Henry Luce Foundation, and CAF for their ongoing support of the Dialogue’s work on China and Latin America.