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9.0 | 2017
Alternative Pathways to Sustainable Development
Alternative Pathways to Sustainable Development. Lessons from Latin America

Skirting or Courting Controversy? Chinese FDI in Latin American Extractive Industries

Adriana Erthal Abdenur

Abstract

China has become a key player in the development sector in Latin America and the Caribbean (LAC), not only due to trade but also because of the growing scope and visibility of its foreign direct investments (FDI). However, Chinese investments in the region are far from homogeneous, not only oscillating over time and space, but also varying across modes of incorporation into LAC economies. In the extractive industries, Chinese actors rely on a wide gamut of strategies to open up markets and to help ensure access to oil and minerals. This chapter breaks down the concept of FDI into three umbrella categories—greenfield projects, mergers and acquisitions, and joint ventures—to analyse how Chinese capital enters LAC extractive sectors. The chapter argues that, faced with a relatively unfamiliar landscape and new sources of uncertainty, Chinese companies tend to ‘test the water’ through mergers and acquisitions, as well as joint ventures, before delving into greenfield activities like direct mining or drilling. This cautious approach signals a degree of institutional learning on the part of Chinese stakeholders, as well as the desire to avoid charges of neo-colonialism, imposed dependency, and lax adherence to formal regulations.

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Editor's notes

Paperback reference: Abdenur, A. E. (2017, forthcoming) ‘Skirting or Courting Controversy? Chinese FDI in Latin American Extractive Industries’ in Alternative Pathways to Sustainable Development: Lessons from Latin America, International Development Policy series No.9 (Geneva, Boston: Graduate Institute Publications, Brill-Nijhoff).

References

Electronic reference

Adriana Erthal Abdenur, « Skirting or Courting Controversy? Chinese FDI in Latin American Extractive Industries », International Development Policy | Revue internationale de politique de développement [Online], 9.0 | 2017, Online since 28 May 2017, connection on 20 September 2017. URL : http://poldev.revues.org/2365 ; DOI : 10.4000/poldev.2365

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About the author

Adriana Erthal Abdenur

is a Postdoctoral Fellow, FGV - Fundação Getulio Vargas.  Her research focuses on the role of rising powers, including the BRICS, in development cooperation and international security. Her recent publications include journal articles in Third World Quarterly, Africa Review, Journal of the Indian Ocean Region, and CIDOB Cahier d’Afers Internacionals.

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Copyright

Creative Commons License
International Development Policy is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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