China–Latin America Relations in the 21st Century

The Dual Complexities of Opportunities and Challenges

Raúl Bernal-Meza, Li Xing, Raúl Bernal-Meza, Li Xing

• Publisher: Palgrave Macmillan
• Year: 2020
• Print ISBN:
  9783030356132
• eBook ISBN:
  9783030356149
• Topic: Politica e relazioni internazionali
• Subtopic: Governo americano

This book conceptualizes the economic relations between China and Latin America in different national cases from the perspectives of international political economy–based structuralism theory, the core-periphery model and the world system theory. It contributes to the interpretation of the consequences of the interaction between China's successful modernization and Latin America's failed development model.

© The Author(s) 2020

R. Bernal-Meza, L. Xing (eds.)China–Latin America Relations in the 21st CenturyInternational Political Economy Serieshttps://doi.org/10.1007/978-3-030-35614-9_1

Begin Abstract

1. Introduction: Understanding China–Latin America Relations as Part of the Transition of the World Order

Raúl Bernal-Meza^{1, 2}

(1)

Department of International Relations, National University Center, Buenos Aires, Argentina

(2)

INTE, Arturo Prat University, Iquique, Chile

Raúl Bernal-Meza

End Abstract

This book was conceived of and proposed by my dear friend Steen F. Christensen and me. It is the result of several years of mutual cooperation, during which time we wrote together a number of book chapters and texts that we presented at international conferences in various countries. Steen passed away just after we had submitted the proposal for this book to Palgrave Macmillan. It was the spirit of Steen and the support of Timothy Shaw and the editors at Palgrave that helped me continue with this project. I have tried to maintain, in this Introduction, the ideas and opinions I shared with my friend regarding relations between China and Latin America and their consequences. To my great joy, my friend Li Xing, who was also Steen’s closest colleague at Aalborg University, is acting as the second editor on Steen’s behalf. I am grateful for the appreciation and intellectual respect of my colleagues for Steen and I am grateful to them for having supported me so that I could continue, in Steen’s honor, our project.

Understanding China–Latin America Relations as Part of the Transition and Transformation of the World Order

This book deals with relations between China and Latin America from an international political economy perspective. As we point out later in the book, China has become an indispensable partner country for Latin American countries and in particular, to those of South America. This fact reaffirms the opinion of Li Xing (2010) that China is increasingly performing the role formerly played by the United States as an “indispensable country” in the world. The place that China occupies today reflects one of the central characteristics of the world as studied by Paul Kennedy (1987), that is, in the rise and fall of great powers. China represents the rise of a new great power.

Our contributors offer an understanding of the new North-South axis in the current international political economy by studying relations between China and Latin America through a number of national case studies on China–Latin America relations. Their analyses allow us to understand the impact these relations have on these countries and the role that they play in China’s global development strategy. These are, of course, relations between a new center (core) and semi-peripheral and peripheral countries, and the analyses explore the ways in which this new power is gradually taking over the role of economic hegemon played by Great Britain in the nineteenth century and the United States in the twentieth century. The country examples focus on the South American sub-region and thus highlight the experience of this sub-region, while at the same time putting this into the wider perspective of Latin America.

The economic relations between China and Latin America have developed within the framework of a world capitalist economy, whose mode of accumulation was superimposed on communism. The history corresponds to the period described by Karl Polanyi (1944/1957) as the “great transformation in world history”: the emergence of market capitalism under different varieties of capitalism. Li and Shaw (2013) applied this interpretation to their analysis of China–Africa relations, which is relevant to the China–Latin America case because Latin America is also part of the current Chinese periphery, and perhaps its most important segment.

Keohane and Nye (1977) and Gilpin (1987) had anticipated the predominance of economic competition over the political-strategic that had marked the previous bipolar order. In both works, the alliance of the capitalist powers was seen as key to the triumph of capitalism, and cooperation between them became an essential instrument for the survival of capitalism. From then on, different scholars (Fukuyama, 1992; Rosecrance, 1986) argued about the evolution of capitalism while agreeing that world competition would take place within the framework of the capitalist mode of accumulation. China acquired power as a “trading state” under the new order of the post-Cold War period, even though its development process, based on the a capitalist model of accumulation, had been initiated by Deng Xiaoping upon the death of Mao before the end of the Cold War, when China did not participate in the bipolar conflict. In this way, two processes of world political economy of the last part of the twentieth century came together, in line with the earlier interpretation of Polanyi.

Keohane and Nye (1977) and Gilpin (1987) analyzed the structural elements of the world system in which the relations studied in this book are inscribed: the contemporary phase of capitalism, known as “globalization”, and the end of the Cold War order. This change transferred to the sphere of the economy what from 1945 to 1991 had been the predominance of the realistic vision in international relations. Security, not the economy, had been the most important item on the agenda of the international system in the period 1945 to 1991. Now the focus on the politics and security of international relations was transferred to the sphere of the economy. As noted by Bayne and Woolcok (2003, 2007), the end of the Cold War witnessed the predominance of international expansion and negotiation in the field of economy over the security agenda.

In the post-Cold War era, the global situation initially revolved around one superpower, the United States, with an international economy heavily biased toward the developed countries and the economic powerhouses of the United States, Europe, and Japan, the so-called “Triad” (Hirst & Thompson, 1996). However, the process of economic globalization gradually led to a reconfiguration of the global economy, characterized by the rise of emerging markets or, more broadly, of the global South. International relations scholars now debate whether the diffusion of power in the global system is leading toward a transition in the global order. According to Lima and Castelan (2011), the consequence of these developments has created an interesting imbalance between the global order and the balance of power in the global system. As Christensen and Bernal-Meza (2014) argue, China may pose a challenge to the hegemony of the United States, although it is not set to challenge the capitalist order as such. These developments have challenged some of the dominant interpretations of the global system based on a liberal world order under US hegemony, and a world organized around a North-South divide, following the demise of the East-West divide of the Cold War. The rise of China is arguably the most notable aspect of these broad processes. Its sustained economic growth over the last three decades is the greatest challenge to the world order since the end of the Cold War (Li, 2010: 149), but is a particular challenge for the modernization processes of Latin American societies. The Chinese economy is now significant in relation to all world regions and economies at all levels of development, the core, the semi-periphery, and the periphery. Academics generally refer to relations between China and Latin America (and Africa) as South-South or East-South relations, and/or as relations between the semi-periphery and periphery as well as between the semi-periphery and semi-periphery (Li & Christensen, 2012; Pieterse, 2018), and a growing literature focusing on these relations has emerged.

During the era of British hegemony, predominantly in the nineteenth century, the international economy was characterized by a division of labor, a topic on which David Ricardo theorized, praising the benefits of the specialization of work. This specialization had been initiated geographically through colonialism, driven by European expansion from the end of the fifteenth century and which had been imposed on Latin America for three centuries. This specialized specialization followed professional specialization, whose maximum expression would be the industrial revolution. These two stages shaped what Aldo Ferrer (1996) called “the history of globalization”, from the origins of the world economic order and the stage following the industrial revolution to the Second World Economic Order (2000), in which he analyzed in particular the effects of both stages on the periphery of the world and, in particular, on Latin America.

The political and economic crises of the 1930s, which began with the crash of 1929, profoundly affected the Latin American economies, prompting several of them to begin an industrialization process. But the crisis of capitalism challenged the mainstream thinking of traditional classical and neo-classical economics, because the crash and its consequences had shown that the primary exporting countries were at the mercy of the global demand for commodities, over whose prices and export volumes they had no control. It was against this background that Raúl Prebisch (1949, 1951), formulated his theory of the deterioration of the terms of exchange. Prebisch’s work gave rise to systemic-structural thinking, whose modeling was later applied to the “world system” theories developed by Wallerstein (1975, 1984) and Arrighi (1985, 1998), by sustaining his vision of political economy in construction. The semi-periphery had emerged as a result of the processes of modernization and industrialization, and had been joined by a group of countries from the 1930s onward, including several from Latin America, that is, Brazil, Argentina, Mexico, and Chile.

Prebisch started from the observation that in international trade between peripheral countries and central (or industrialized) countries, the latter appropriated most of the fruits of technical progress, which led to a deterioration in the terms of trade between primary goods and manufactured goods because the rate of growth of productivity in manufactured production is higher than in the production of primary goods. This increase in productivity should be transferred to the prices of industrial products, thus causing them to drop, due to the lower value added to each unit produced. However, the fall in the prices of industrial products did not occur because the agents of production, workers, and entrepreneurs in the industrialized countries, thanks to their political-organizational force, blocked the operation of the market, preventing the spread of technical progress at the international level, and producing a constant deterioration in the terms of trade. In short, the prices of industrial products did not decrease proportionally to the increase in productivity and the price paid for raw materials tended to decrease as a proportion of the price of manufactured or industrial products. In summary, Prebisch demonstrated how, in the trade relations between peripheral and core (or industrialized) countries, the latter appropriated the greatest part of the economic benefits of technical progress.

It is possible that in China the reading of the history of the world economy as mentioned above has influenced the search for a capitalist path of industrialization and scientific-technological development. Hence, in the late 1970s, Deng Xiaoping promoted the Four Modernizations, whose success, under an alternative model to classical capitalism characterized by communist authoritarianism (Becker, 2014), projected China toward modernization and the construction of a subsystem of international relations that would be functional to its development as a global power. China reached its current position as the second leader in the world economy by following an export-oriented industrialization model, in which economic relations with different regions of the world-core, semi-peripheral, and peripheral countries played different roles. Latterly, Latin America has been part of China’s political economy strategy and the Chinese development model. However, historically there was little interaction between China and Latin America, because their relationships were between peripheral countries with low industrialization and development levels. However, this situation changed drastically due to Chinese modernization, and Latin America became a function¹ of Chinese development.

China’s quest for global economic primacy has given Latin America an important role in China’s international strategy. As Cesarin (2016: 53) points out, “the Chinese objectives in the region converge with their global aspirations as a rising power; the will to project power towards the American periphery and access essential natural resources to sustain its economic growth.” China has entered a political space that was historically dominated by the United States, while it has also strengthened its presence in what China considers its vital space: Southeast Asia (from Japan to Indonesia, from South Korea to Vietnam and the Philippines). The United States is beginning to react to this challenge—for the moment on the economic front—and is warning Latin American countries about the danger that Chinese investments represent for them.²

Latin America provides China with raw materials for its industry (minerals and oil) as well as food and other commodities for domestic consumption. In turn, it imports capital goods, equipment, manufactures, and financial capital from China. This type of relationship, which reproduces similar models of subordinating and dependent complementarity that occurred previously in Latin America—in the nineteenth century with Great Britain and the twentieth century with the United States and other developed capitalist countries (Europe and Japan)—must be interpreted according to Prebisch’s theory about the deterioration of the terms of trade. As Margulis (2017) argues, the theoretical contribution of Raúl Prebisch within the field of international political economy (IPE), or global political economy as Margulis calls it, is of great significance within IPE theory. This book contributes analyses inspired by the contribution of Prebisch to IPE...

Table of contents

• Cover
• Front Matter
• 1. Introduction: Understanding China–Latin America Relations as Part of the Transition of the World Order
• 2. Advancing Autonomy? Chinese Influence on Regional Governance in Latin America
• 3. One Step Closer: The Politics and the Economics of China’s Strategy in Brazil and the Case of the Electric Power Sector
• 4. Cooperative Relations with China in Brazil’s International Politics: Scope and Interests of the Global Strategic Partnership
• 5. A Goat’s Cycle: The Relations Between Argentina and the People’s Republic of China During the Kirchner and Macri Administrations (2003–2018)
• 6. China–Venezuela Relations in a Context of Change
• 7. Chile and China, 2000–2016: The Humming Bird and the Panda
• 8. China and Argentina, Paraguay, and Uruguay: Similarities and Differences
• 9. Revisiting Chinese and Latin American Economic Development: An Unintended Consequence of Different Industrialization Strategies
• 10. Conclusion: China and Latin America in the Global Political Economy: The Development of a New Core-Periphery Axis