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Chinese Infrastructure Investment in Latin America—an Assessment of Strategies, Actors and Risks

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Abstract

This paper links China’s pattern of infrastructure lending to Latin America and the Caribbean (LAC) with China’s own development experience in this regard. It raises the question whether Chinese infrastructure investments in LAC have the potential to promote sustainable development in the region. The paper consists of four parts. Part 1 outlines China’s massive domestic infrastructure construction projects as a specific development strategy which has contributed considerably to the country’s rapid internal development, but has simultaneously given rise to complex dynamics of social and environmental risk. Part 2 assesses the strategies involved in China’s infrastructure investment in LAC. Part 3 identifies key actors involved in China-LAC infrastructure cooperation and how they relate to different ways of financing infrastructure projects. Part 4 focuses on policy guidelines for managing the social and environmental risks of infrastructure projects. The paper concludes that more research, more capacity-building, and new forms of multinational development cooperation are needed to strengthen the social and environmental policies associated with China’s infrastructure investment in LAC countries, to help uphold existing social and environmental standards, and to extend project benefits more effectively to local communities and people.

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Notes

  1. CELAC, or the Community of Latin American and Caribbean States, was formed in 2011 and comprises 33 countries in the Americas, without Canada or the United States.

  2. This does not mean, however, that China no longer wishes to remain an attractive object of foreign investment itself.

  3. This figure derives from the listings in the China-Latin America Finance Database. The actual share of infrastructure loans is probably higher, because some of the “energy” listings, such as dams, are also classic infrastructure projects.

  4. A trilateral memorandum of understanding has already been signed by Peru’s Ministry of Transport and Communications, Brazil’s Ministry of Transport and the Chinese National Development and Reform Commission (NDRC).

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  1. Institute of East Asian Studies, Sinology, Freie Universität Berlin, Fabeckstr. 23-25, Room 1.1131, 14195 Berlin, Germany

    Bettina Gransow

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Gransow, B. Chinese Infrastructure Investment in Latin America—an Assessment of Strategies, Actors and Risks. J OF CHIN POLIT SCI 20, 267–287 (2015). https://doi.org/10.1007/s11366-015-9362-2

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