UNIVERSITY OF CALIFORNIA Los Angeles The Lure of Chinese State Capitalism in Latin America: Influence, Investments and Imports A dissertation submitted in partial satisfaction of the requirements for the degree Doctor of Philosophy in Geography by Thomas Peter Narins 2015 © Copyright by Thomas Peter Narins 2015 ABSTRACT OF THE DISSERTATION The Lure of Chinese State Capitalism in Latin America: Influence, Investments and Imports by Thomas Peter Narins Doctor of Philosophy in Geography University of California, Los Angeles, 2015 Professor John A. Agnew, Chair This work proposes and explains a political-economic concept, defined here as the neoliberal-dirigiste continuum , which offers an explanation of the manner in which Chinese capital and Chinese State Capitalism have been invested and received in different ways across the distinct geographies and countries in Latin America over the last three decades. While bilateral trade is one measure used to gauge the attractiveness of the Chinese state capitalist model in targeted Latin American economies, foreign direct investment (FDI) and economic aid/assistance by Chinese firms and Chinese government actors are other mechanisms through which Chinese economic engagement in the region can be assessed. This dissertation employs a mixed-methods approach to developing a Chinese economic engagement framework given particular and distinct Latin American foreign policies. The geographic variation of the success of recent Chinese economic activity (particularly foreign investment) in nine targeted Latin ii American economies (Colombia, Chile, Peru, México, Brazil, Argentina, Ecuador, Bolivia and Venezuela) is examined in order to understand Chinese economic actors’ engagement in the region compared with that of European and US economic actors. iii The dissertation of Thomas Peter Narins is approved. C.F. Cindy Fan David L. Rigby James Tong John A. Agnew, Committee Chair University of California, Los Angeles 2015 iv To Vishnu, Mom and Dad Thank you for challenging me to do better and go farther v Table of Contents 1. Introduction ……………………………………………………………………............1 2. The Lure of Chinese State Capitalism in Latin America ………………………….16 3. Chinese Trade with Latin America and the Caribbean (LAC) and China’s Comparative Trade Engagement in Latin America: The Case of Technology Upgrading …………………………………………………..………………………...64 4. China’s Foreign Direct Investment (FDI) and Economic Aid in Latin America .122 5. Comparing business strategies and encounters of US, EU and Chinese resource companies and policy banks operating in Latin America ……………..177 6. Countering the China Hype and the Journalistic Balloon of China in the Developing World …………………………………………………....203 7. Conclusions ………………………………………………………………………….230 8. Bibliography ……………………………………………………………………...…245 vi List of Figures and Tables Chapter 1, Figure 1: The Neoliberal-Dirigiste Continuum……………..………………...4 Chapter 3, Table 1: Colombia’s Major Trade Indicators………………….…………….69 Chapter 3, Table 2: Chile’s Major Trade Indicators……………………….…....………72 Chapter 3, Table 3: Peru’s Major Trade Indicators……………………….…………….74 Chapter 3, Table 4: Mexico’s Major Trade Indicators………………………….……....77 Chapter 3, Table 5: Brazil’s Major Trade Indicators……………………………….…...80 Chapter 3, Table 6: Argentina’s Major Trade Indicators………………………….…….83 Chapter 3, Table 7: Ecuador’s Major Trade Indicators…………………………………86 Chapter 3, Table 8: Bolivia’s Major Trade Indicators…………………………....……..89 Chapter 3, Table 9: Venezuela’s Major Trade Indicators………………..……………...92 Chapter 3, Figure 1: TECH Scores for USA, EU and China for 9 LAC countries….…105 Chapter 3, Table 10: Top 5 Commodities Exported by China in 2013………….…..…107 Chapter 3, Figure 2: Chinese TECH Scores in Latin America (for 2013)……….…….110 Chapter 3, Table 11: 20 Selected TECH Score Export Partners………………....…….113 Chapter 4, Table 1: FDI inflows into Colombia (2001-2012)…………………...……..124 Chapter 4, Table 2 : FDI Stock in Colombia (2001-2012)……………………….……..124 Chapter 4, Table 3: FDI Inflows into Chile (2001-2012)……………………….……...130 Chapter 4, Table 4: FDI Stock in Chile (2001-2012)……………………..…………....130 Chapter 4, Figure 1: Chilean Foreign Investment Inflows (1974-2012)….……….…...132 Chapter 4, Table 5: Total FDI Inflows into Chile by Country of Origin (1974-2012)....133 Chapter 4, Table 6: Table 6. FDI Inflows into Peru (2001-2012)………………….…..137 vii Chapter 4, Table 7: FDI Stock in Peru (2001-2012)……………….…………………..138 Chapter 4, Table 8: FDI Inflows into Mexico (2001-2012)…………………………....142 Chapter 4, Table 9: FDI Stock in Mexico (2001-2012)…………..……...…….………142 Chapter 4, Table 10: FDI Inflows into Brazil (2001-2012)………………...….………146 Chapter 4, Table 11: FDI Stock in Brazil (2001-2012)…………………..…….……...147 Chapter 4, Table 12: FDI Inflows into Argentina (2001-2012)…………...…….……..150 Chapter 4, Table 13: FDI Stock into Argentina (2001-2012)………………...….…….151 Chapter 4, Table 14: FDI Inflows into Ecuador (2001-2012)……………...….………155 Chapter 4, Table 15: FDI Stock in Ecuador (2001-2012)…………………..….…....…156 Chapter 4, Table 16: FDI Inflows into Bolivia (2001-2012)………………..….….…..157 Chapter 4, Table 17: FDI Stock in Bolivia (2001-2012)……………………..…..……158 Chapter 4, Table 18: Largest, Active Creditors of Bolivian External Debt/Loans.…...160 Chapter 4, Table 19: Loans Granted By China to Bolivia……………………………..161 Chapter 4, Figure 2: Bolivian FDI from selected countries………………….…...…....162 Chapter 4, Table 20: Bolivian FDI by Country of Origin……………………..…..…...163 Chapter 4, Table 21 : FDI Inflows into Venezuela (2001-2012)……………..…..…….164 Chapter 4, Table 22 : FDI Stock in Venezuela (2001-2012)………………….…..……165 Chapter 4, Table 23a : Avg. Annual Chinese FDI Flows in selected LAC countries.....169 Chapter 4, Table 23b : Avg. Annual Chinese FDI Stock in selected LAC countries….170 Chapter 4, Table 24a : Avg. Annual Chinese FDI Flows by Sub-Group…………..…..171 Chapter 4, Table 24b : Avg. Annual Chinese FDI Stock by Sub-Group…………..…..171 Chapter 4, Table 25 : Total Chinese FDI Stock by Country 2005-2013…………..…...173 Chapter 4, Table 26: Total Chinese FDI Stock by Sub-Group 2005-2013.………..….174 Chapter 5, Table 1: Comparative age of selected Chinese vs. Western firms……..….180 viii Chapter 6, Table 1: Summary of economic trade and investment indicators………..216 Chapter 6, Figure 1: Placing China among selected Bolivian export destinations…..217 Chapter 6, Figure 2: Placing China among selected Bolivian import origin states.....218 Chapter 6, Figure 3: China’s place among selected importing states to Chile…........220 Chapter 6, Figure 4: China’s place among selected exporting destinations from Chile…………………………………………………………………………..…220 Chapter 6, Figure 5: Imports from China to 9 targeted LAC economies...…….……221 Chapter 6, Figure 6: Exports to China from 9 targeted LAC economies……...…….222 Chapter 6, Figure 7: The Neoliberal-Dirigiste Continuum……………………...…..225 Chapter 7, Table 1: Hierarchy (and varieties) of Chinese capital…………..…...…..241 ix Acknowledgments I first wish to acknowledge and thank John Agnew, my committee chair, whose inspiration and creative approach to clearly communicating the intricacies and interconnections of this discipline have inspired me to think beyond China’s borders in numerous dimensions. John’s enthusiasm and guidance during these last six plus years have made the process of crafting and developing this project a real privilege. I also wish to express my deepest gratitude to David Rigby whose consistent good-nature and enthusiasm for pushing me beyond my comfort zone only helped to make my work stronger and more meaningful. I am also extremely grateful to have had the privilege of taking China-related graduate seminars with Cindy Fan and James Tong. Both of their courses shaped the way that I approach the geography of China beyond its borders, and for their insights and guidance, I am very thankful. Numerous friends and colleagues have provided invaluable comments and suggestions over the years. They are: Walter Allen, Luis Alvarez, Cameran Ashraf, Mia Bennett, Nick Burkhart, Siyu Cai, Corin Choppin, Randy Kay Stephens, Constanza Caselli, Vena Chu, Abigail Cooke, Britt Crow, Rodrigo de la Cerda, Kebonye Dintwe, O.T. Ford, Trevon Fuller, Selvarathinam Ganesan, Tom Gillespie, Colin Gleason, Katie Glover, Jennifer Goldstein, Christa Gomez, Andrew Grant, Ali Hamdan, Timur Hammond, Ryan Harrigan, Taylor Hines, Anthony Howell, Tuyen Le, Cecilia Jeanneret, Mimi Nartey, Kofi Nartey, Greg Okin, Brian Quinn, Wes Reisser, Malarvizhi Selvarathinam, Eric Sheppard, Fernando Soler, Tom Smith, Keith Stolzenach, Clark Taylor, Marcus Thomson, Frank Van Der Wouden, Aleksandra van Loggerenberg, Ana Maria Velasco, Andrés Velasco, Jida Wang, Diane Ward, Kate Willis, Matt Zebrowski. Finally, a very special thanks to my family, whose unconditional love and support are uplifting beyond compare. x VITA /B IOGRAPHICAL SKETCH THOMAS P. NARINS EDUCATION University of California, Los Angeles Ph.D. Candidate, Geography, expected winter 2015 University of Arizona M.B.A., 2008 Cornell University B.A. Government, 1998 PUBLICATIONS Published or In Press NARINS , T.P. (In Press), ‘Dynamics of the Russia-China Forest Products Trade (1993 – 2010),’ Growth & Change. MUELLERLEILE , C., STRAUSS , K., SPIGEL , B. AND NARINS , T.P. 2014. ‘Economic Geography and the Financial Crisis: Full Steam Ahead?’ The Professional Geographer , February 2014, Vol. 66, No. 1, pp. 11-17. DOI: 10.1080/00330124.2012.757819 NARINS , T.P. 2013.‘Ecuadorian State-Capacity