China’s Economic Presence in Latin America

˙ Asia & Latin America

The Dialogue is pleased to feature the following excerpts from “Too Big to Fail?: China’s Economic Presence in Latin America,” by Guo Jie (??), assistant professor and Latin American affairs expert at Peking University and former Chinese scholar-in-residence at the Inter-American Dialogue. Her new article, to be published in China International Strategy Review, offers a comprehensive evaluation of the China-Latin America relationship from a Chinese perspective. The full text in Chinese can be downloaded below.


China’s economic growth over the past ten years has become an important factor for Latin America’s development. Trade between the two parties has skyrocketed. Significant increases in Chinese foreign direct investment (FDI) in Latin America have also attracted attention.

Sensational accounts, both positive and negative, of China’s presence in the Americas have failed to capture the multiple dimensions of Sino-Latin ties. It is undeniable that China has achieved significant expansion in the Western Hemisphere. However, a lack of balanced engagement and insufficient incentives for sustainable development remain equally apparent.

A “win-win” scenario is not a far-fetched notion, but a realistic demand by both sides. Driven by this desire, the China-CELAC forum has the potential to alleviate points of tension and broaden future opportunities for Chinese relations with Latin America. Whether such goals can be achieved depends on trust, understanding and collaboration from all parties.

Trade between China and Latin America (in US$) between 1950 and 2012
Trade between China and Latin America (in US$) between 1950 and 2012


Excerpt: The path towards diversification and mutual development

The diversification of trade and investment between China and Latin America presents an opportunity for both parties to strengthen and sustain economic relations. Economic ties between China and the region have diversified more rapidly recent years, largely due to four factors:

  • Chinese government’s incentive policies;
  • Latin American countries’ interest in Chinese investment;
  • Chinese companies’ greater maturity in practices overseas
  • Greater pressure from domestic markets

Chinese companies operate across numerous sectors in Latin America. Multinational companies in industries such as telecommunications, personal computers, automobiles, household appliances, televisions and heavy machinery have developed rapidly in major Latin American economies such as Brazil and Mexico. Corporations in other sectors — including agriculture, electricity and renewable energy — have also gained a foothold in the region. When China officially joined the Inter-American Development Bank in 2009, Chinese financial institutions accelerated their expansion in Latin America.

Although a degree of diversification is evident, large asymmetries persist within between countries and sectors. The largest share of China’s investment has been allocated in South America. China’s investments in Brazil and Argentina have also diversified to a greater extent than those in other Latin American countries.

The China-CELAC forum proposed by China was officially approved in 2014. China expects to take advantage of this opportunity to deepen cooperation with Latin American partners and achieve greater degree of diversification. To do so, officials need to have a clear understanding of major commonalities and differences among Latin American countries. It is important that China recognize each member country’s distinct identity and expectations and openly articulates its own vision and objectives from the outset in order to avoid any unnecessary misunderstanding. As former Premier Wen Jiabao acknowledged, “the pursuit of common interests lies at the core of China-Latin America relations.” Identifying these common interests is essential for promoting sustainable development between China and Latin America.

Table 1: Chinese companies’ oil investment in Latin America, 1993-2013



Investment activities
Oct-93 CNPC Block 7 in Talara Oilfield, Peru
Jul-95 CNPC Block 6 in Talara Oilfield, Peru
Jun-97 CNPC Caracoles and Intercampo Oilfields, Venezuela
Jun-01 CNPC Orimulsion Cooperation with PDVSA
Aug-03 CNPC Block 11 of Amazon Project, Ecuador
Nov-03 CNPC Purchased 45% stake of the Argentine company PLUSPETROL on Block 1-AB/8 in Peru
Dec-03 SINOCHEM Purchased CRS Resources (Ecuador) LDC from ConocoPhillips Co. of USA. Its asset concludes 14% of the interests of Ecuador Block 16.
Aug-05 CNPC and SINOPEC Jointly purchased oil and gas assets and development rights and interests of five blocks owned by Encana in Ecuador, and established Andes Petroleum Ecuador Ltd.
Dec-05 CNPC Signed risk exploration contracts with Peru’s Ministry of Energy & Mining covering Block 111 and Block 113 in the MDD basin.
Aug-06 CNPC Signed a joint venture agreement on Zumano Oilfield in Venezuela with PDVSA.
Sep-06 SINOPEC OVL and SINOPEC Jointly bid for 50% stake in Omimex de Colombia. Each of them has 25% stake.
Mar-07 CNPC Joint venture for exploration, drilling and upgrade the super-heavy oil with PDVSA on Block Junin 4 in the Orinoco heavy oil belt in Venezuela
May-09 SINOPEC and CNOOC Jointly purchased all assets of Talisman in Trinidad and Tobago
Oct-09 SINOCHEM Acquired 100% equity of Emerald Energy PlC, which includes 50%-100% rights and interets of 8 blocks in Colombia and 100% rights and interests of block 163 in Peru.
Mar-10 CNOOC Estbablished a 50% 50% joint venture with Argentina’s Bridas Energy Holdings.
May-10 SINOPEC Purchased 40% stake of Peregrino Oilfield (Brazil) from Statoil ASA.
Oct-10 SINOCHEM Won concession of five blocks in Peru: blocks 178, 185 and 165 in Marañon field and Blocks 173 and 175 in Ucayali field.
Oct-10 SINOPEC Purchased 40% stake of Repsol Brazil
Dec-10 SINOPEC Purchased all assets of Occidental Petroleum Corp.’s Argentine oil and gas unit
Dec-10 CNPC Signed a joint venture operation agreement with PDVSA on Block Junin 4 in the Orinoco heavy oil belt.
Feb-11 CNOOC Pan American (owned by Bridas Corp — itself co-owned by China’s CNOOC and Argentina’s Bulgheroni family) purchased an oil refinery and more than 700 service stations in Argentina, Paraguay and Uruguay from Exxon Mobil Corp
Nov-11 SINOPEC Purchased 30% stake in Galp Energia SGPS SA (GALP)’s Brazilian unit
Dec-11 SINOCHEM Purchased 10% stake of the Brazilian unit of French oil and natural-gas company Perenco SA in five offshore blocks in the Espirito Santo Basin
Feb-12 SINOCHEM Purchased TEPMA BV (Total SA’s Colombian assets), which has a stake in the Cusiana field as well as shares in the OAM and ODC pipelines in Colombia.
Oct-13 CNPC and CNOOC Formed a consortium with other oil companies and won the concession of exploration and extractions in Libra oilfield (Brazil). CNPC and CNOOC each has 10% stake.
Nov-13 CNPC Purchased Petrobras’s Peru unit.

Note: the sources are diversified, including websites and reports of the companies, publication of government authorities such as SASAC, MLR and MOFCOM, and database of think tanks such as the Heritage Foundation.

Table 2: 61 Chinese investment activities of more than a hundred million US$, 2005-2013


Energy Mining Agriculture Finance Automobile Chemical Real Estate Telecom


4 2 4 4 3




1 1



7 1



1 2 1 1















Trinidad & Tobago


(US$ 100 million)

346.7 171 42.3 20 16.2 10.1 9.6


Notes: Original data from the Heritage Foundation. The author has edited it based on comparison with other sources. The table presents the results of the author’s confirmation and calculation. *Two of the seven are State Grid investment; the others are oil and gas investment. **One is solar energy and the other is wind power. 


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