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The Roles played by Three Categories of Actors in China’s Engagement in Latin America to Develop Economic Ties with the Region

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Abstract

This article tries to analyse the roles played by three categories of Chinese actors (the state, enterprises and quasi-government organizations) involved in China’s engagement in Latin America to develop economic ties with the region. The first section focuses on the role of the state (the Chinese government) which has maintained a strong focus on the “top-down-design” in Sino-Latin American economic cooperation by issuing a set of policies and undertaking a number of practical measures. The second part of the paper analyses the role of Chinese enterprises including both state-owned and private ones by analysing two cases of Chinese enterprises which on the one hand, implement government policies and on the other sometimes act as pioneers. In the last section, through the case study on the China Council for the Promotion of International Trade (CCPIT) which is one of the few quasi-government organizations involved in China’s foreign economic cooperation and also, without doubt, one of the most influential. Its role as platform for economic cooperation has been acknowledged by the “top” (Chinese goverenment) and the “bottom” (enterprises) in China and by Chinese enterprises and their counterparts in Latin America. The paper shows that none of the Chinese actors can take the place of the other in the economic cooperation between China and Latin America; instead, the roles of the three different categories of Chinese actors are complementary.

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Notes

  1. It has been argued that the SOEs do not have any decision-making powers and only do what the state wants. In fact, from 1992 to 2002, China experienced the reform on modern enterprise system. In 1993, the “Decision of the Central Committee of Communist Party of China on the establishment of the socialist market economic system” was adopted by the 3rd Plenary Session of the 14th Central Committee of the CPC. The modern enterprise system features clearly established ownership, well defined power and responsibility, separation of enterprise from administration, and scientific management. Under the constraints of modern enterprise property rights structure, the government cannot directly control and manage state-owned enterprises (Gu and Xie 2002, 2–6).

  2. The Catalogue for the Guidance of Foreign Investment Industries published by the NDRC gives clear advice on Chinese enterprises in two specific catalogues: the Catalogue of Restricted Foreign Investment Industries and the Catalogue of Prohibited Foreign Investment Industries [10].

  3. The National Development and Reform Commission (NDRC) and China Development Bank (CDB) offered financial support for the major overseas projects of Chinese companies [12].

  4. The NDRC and the China Export & Credit Insurance Corporation (SINOSURE) set up a Risk Security Mechanism for the major overseas projects of Chinese companies [13].

  5. Main activities of the CNPC in Latin America, including Costa Rica, Columbia, Venezuela, Ecuador, and Peru include: in Oct. 1993, acquired a service contract for Block 7 of Peru’s Talara Oilfield; in Jul. 1995, acquired a service contract for Block 6 of Peru’s Talara Oilfield; in Jun. 1997, won tenders for the Intercampo Oilfield and Caracoles Oilfield in Venezuela; in Apr. 2001, signed a cooperation agreement on the Orimulsion project with PDVSA; in Nov. 2003, acquired a 45 % stake in Block 1AB/8 from PLUSPETROL; in Sept. 2005 purchased oil and gas assets of five blocks owned by Encana in Ecuador; in Aug. 2006, entered into a joint venture agreement with PDVSA to develop Zumano Oilfield; in Mar. 2007 signed an agreement with PDVSA to expand cooperation in the Orinoco Oil Belt; in Feb. 2008, established a joint venture with PDVSA to operate the MPE3 project; in Nov. 2008, entered into an agreement with RECOPE to establish a joint venture refinery, and in Dec. 2010, Signed a joint venture operation agreement with the Venezuelan Ministry of energy and Petroleum on Block Junin 4 in the Orinoco Oil Belt (China National Petroleum Corporation, n.d.)

  6. Established in May 1952, the CCPIT comprises enterprises and organizations representing the economic and trade sectors in China. It is the most important and the largest institution for the promotion of foreign trade in China. Its aims are to operate and promote foreign trade, to use foreign investment, to introduce advanced foreign technologies, to conduct activities of Sino-foreign economic and technological cooperation in various forms, to promote the development of economic and trade relations between China and other countries and regions around the world, and to promote the mutual understanding and friendship between China and peoples, and economic and trade circles of all nations around the world, in line with the law and government policies of the People’s Republic of China (CCPITa, n.d. http://www.ccpit.org/).

  7. Since ‘quasi-government organization’ is a contested category, it is important to clarify the identity of the CCPIT. The CCPIT considers itself a “non-government foreign economic and trade organization of China”. However, a search for CCPIT on the website of the Bureau of Non-Profit Organizations of the Ministry of Civil Affairs of the PRC does not yield any result (MCA, www.chinanpo.gov.cn). Generally, all the NGOs are registered with the MCA and can then be found in the MCA database. Furthermore, the leadership of the CCPIT all are public servants, see http://www.ccpit.org/Contents/Channel_3549/2014/0813/409532/content_409532.htm; http://www.chinanpo.gov.cn/index.html.

  8. For example, the CCPIT organized the China-Argentina Economic and Trade Cooperation Forum during the visit of the Argentine President, Cristina Fernandez de Kirchner, to China on February 4, 2015. President Fernandez and nearly 1000 entrepreneurs and representatives of enterprises from the two countries attended the forum [11]. Furthermore, companies such as the China International Exhibition Center Group Corporation (CIEC), the China International Economic and Technical Cooperation Consultants Inc. (ECOTECH), the China Global Business International Travel Service (CGBITS), which are affiliated to the CCPIT, can help to organize this business event.

  9. “The first China-LAC Business Summit was organized by the CCPIT in November, 2007 [… It] aims to focus on the key issues in the interests of China-LAC business circles, with the broader prospect of advancing the international economic & trade development trend […] Under the umbrella of the Summit, there are also LAC National & Regional Exhibitions, Roundtable Meetings of China-LAC Trade Promotion Organizations and one-on-one business matchmaking meetings” [16].

  10. The Nine China-LAC Business Summits were held in Chile (2007), China (2008), Columbia (2009), China (2010), Peru (2011), China (2012), Costa Rica (2013) and China (2014) respectively. Source: The 8th China-LAC business summit 2014. (http://2014.clasummit.net/ccpit/website/201404004/en/)

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  10. MOFCOM. 2012. Catalogue for the Guidance of Foreign Investment Industries (Amended in 2011) Online: http://english.mofcom.gov.cn/article/policyrelease/aaa/201203/20120308027837.shtml. Accessed on 13 Feb. 2015.

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  12. NDRC. 2005a. Notice Concerning Relevant Issues on setting up a risk prevention mechanism for key overseas investment projects[关于建立境外投资重点项目风险保障机制有关问题的通知], http://wzs.ndrc.gov.cn/jwtz/cyzn/200507/t20050714_35755.html. Accessed on 13 Feb. 2015.

  13. NDRC. 2005b. The National Development and Reform Commission and China Development Bank.

  14. Renmin Ribao. 2014. Huawei ZTE has a foothold in the telecom market of Latin America, participates in network standard setting [华为中兴在拉美电信市场立足 参与网络标准制订] 2014. The People’s Daily, 26 August 2014, Online: http://tech.huanqiu.com/comm/2014-08/5118588.html. Accessed on 1 Feb. 2015.

  15. Sun Zhao, Liang Jun. 2014. Chinese enterprises in Latin America, People’s Daily Online, February 19, 2014, Online: http://en.people.cn/98649/8539785html. Accessed on 1 Feb. 2015.

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  19. Xinhua News Agency. 2015. China-CELAC Cooperation Plan 2015–2019, Online: http://news.xinhuanet.com/world/2015-01/09/c_1113944648.htm. Accessed on 13 Feb. 2015.

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  1. Institute of Latin American Studies (ILAS), Chinese Academy of Social Sciences (CASS), No. 3, Zhang Zizhong Road, Dongcheng District, Beijing, 100007, People’s Republic of China

    Zhimin Yang

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  1. Zhimin Yang
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Yang, Z. The Roles played by Three Categories of Actors in China’s Engagement in Latin America to Develop Economic Ties with the Region. J OF CHIN POLIT SCI 20, 289–300 (2015). https://doi.org/10.1007/s11366-015-9363-1

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