1. 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

2. 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

3. Literature Review
• Realism: hegemonic challenge
• Dependency theory: dependent
development
• Liberal IPE: economic interdependence
• Constructivism: Ideology; alternative
development model

4. 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

5. Operational Indicators
The 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)

6. 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)

8. 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 economy
PDVSA 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

9. CDB loans to Venezuela from 2008 to
2015 (over US$ 56 billion)

10. Mexico (2003)
Mexico’s oil production counts for 26% (Pemex);since Dec 2013, energy
reform
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

11. 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

12. Findings: Empirical

13. 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.

14. Findings: Analytical
•Brazil: a leading role both regionally and globallyincreasing
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 defaultbiofuel energy