China and Argentina: A Brief Review of The Literature

Exploring Sino-Latin American Relations, Part 1

By JEAN-PAUL GAGNON | 23.05.2011


Two and a half centuries ago, the French Sinologist De Giognes proposed that the New World was discovered not by Columbus, but by the Chinese. Proven contacts between China and Latin America can be dated back to the 1570s, when trade between them started to flourish across the Pacific (Jiang, 2003: 3). In the 18th and early 19th Century, hundreds of thousands of Chinese labourers were transported to Latin America to serve as contracted workers (kulil “coolie”), some of them being sold by Western colonialists; their labour contributed to local economic development.

– Cheng (2006: 500)

The purpose of this paper is to try to analyse the nature of contemporary Sino-Argentine relations. It forms the first of what I hope to be a lengthy series of papers individually scrutinizing the bi-lateral relations of Latin American countries (including México) with the People’s Republic of China. An initial hunch led me to question whether we, as an international body of academics, have been looking at China’s relationships with other regions outside of Africa. There is for example, what I consider to be the new “dark” region, the recently independent states of Central Asia. Compared to Africa this region has gained little to no attention concerning its bi-lateral relations with China. As will come to be seen, it appears this is also the case with Latin America.


argentina_china_flagThis paper will initially discuss certain publications detailing China’s relationship with Latin America on the whole and then “zoom” into the literature specifically addressing Argentina. My main “quest” is to try to understand whether the Beijing Consensus (so widely discussed in the Sino-African literature) is the same in Latin America. Is the PRC (Peoples’ Republic of China), for example, pursuing the development of SEZs (Special Economic Zones) in that region? Are there “packaged deals” offered to countries, even those that have gained the ire of various US administrations with “no-strings-attached”? Is the PRC pursuing these relations for arguably the same reasons it is doing so in Africa? These questions, and others, are all in need of answering as to my limited knowledge they have thus far not been answered in, at least, the English literature.

The goal is to have this paper, and those forthcoming, collectively provide evidence so that at least one (and hopefully more) of these questions can be answered by minds greater than mine. This series may serve as an annotated bibliography for future thinkers and will hopefully be a small but perhaps useful offering to our community.

  • Latin America – On the Whole

Altenberg (2008), in a review, introduced me to Husar’s (2007) work. I argue that Husar’s monograph is important because it fills a noticeable gap in the literature. And after a lengthy review of the literature it appears Altenberg is right:

Until today, however, academic debate has almost ignored Chinese activities in Latin America.China’s Engagement in Lateinamerika therefore provides a welcome alternation in tune and hopefully enhances academic debate beyond a self-imposed regional restriction. (Altenberg, 2008: 158)

There are, however, emerging works on this topic in the literature. One important thinker appears to be Rhys Jenkins (2008, 2010).  We see from his latest (2010) work that a rising criticism concerns the nature of Chinese investment in Latin America because it focuses on primary materials and might be impeding the growth of second order economics (manufacturing, service, and marketing consumables for example) in Latin America. There is also the warning that there has been perhaps too great of an emphasis and exaggeration perhaps, of the PRC’s political influence in the region (particularly from U.S. commentators).

China represents a threat to the exports of other Southern exporters of manufactures, while imports from China compete with producers on the domestic market. China’s high level of competitiveness in manufactured goods and its booming demand for primary products is tending to push other developing countries back into specialising in commodities, which do not provide the same dynamic benefits as the manufacturing sector. Chinese investment simply serves to reinforce this specialisation, while at the same time other foreign investors divert their investment from other developing countries to China. Politically, the pessimistic view sees China as undermining a trend towards increased democratic governance in the developing world, both through its example of successful economic development under an authoritarian political regime and through its support of repressive governments that violate human rights. (Rhys, 2010: 812)

Rhys is careful to establish that there are two sides to the coin (which is much like how a substantial portion of the literature is going about Sino-African relations) and stresses the positives of Chinese investment in the region alongside the potential negatives. Pham (2010), however, argues that the US has lost its traditional role in Latin America now that China is an economic and diplomatic player in the region (this might be an example warranting Rhys’ criticism).

Santiso (2007), Lederman, Olarreaga and Perry (2008), as well as Lee and Diaz (2009) among others show that China has been investing substantially in Latin America and that it has been pressing its diplomatic agenda on these countries. This, should one be familiar with the extant literature on Sino-African relations, is rather similar to what happened and is happening between that continent and the PRC.

What is also evident in the aforementioned literature (including Gallagher and Porzecanski, 2008) is that there is a distinct level of concern for the economies of Latin American and Caribbean countries (heretofore LAC). This was not evident[1] in much of the literature familiar to me concerning Africa and is perhaps because LAC’s had the ability to develop their economies further than many African states (for a multiplicity of reasons). Nevertheless, we see from Jenkins, Peters and Moreira (2007) that from 1999-2005 “China’s imports from Latin America increased sevenfold while its exports to the region more than tripled” (Jenkins, Peters and Moreira, 2007: 235). Whether this increasing degree of trade has the capacity to undermine manufacturing in LAC is perhaps still yet to be seen. Economic adaptation via the increased capital from Chinese investment might be a viability but this is a paltry opinion as I lack sufficient expertise in macroeconomic matters to critically comment.  It is, however, evident that perhaps a portion of LAC players are concerned with the double-edged sword (or two-headed dragon) that China may metaphorically represent to their economies.

We gain greater insight into PRC-LAC relations through León-Manríquez (2006) as he rightly argues we should avoid generalizing anything at the regional level unless we consider each country’s own unique relations with China and then extrapolate. From this source we learn that Venezuela benefits from trading its oil; that Chile, Brazil, Argentina and Peru benefit from trading in agri-business and minerals; but that Mexico and Central America have been negatively affected by Chinese imports (specifically to the USA) as it is displacing consumables produced and exported by Mexican and Central American economies. As part of this series, it is my eventual ambition to try and better understand the nature of China’s economic impacts in Mexico and Central American countries.

Cheng (2006) gives us a convincing account of the situation between the PRC and the LAC. What I found particularly surprising is that there is an apparent 95% concurrence in United Nations votes between the two bodies. Cheng (2006: 500) argues that this may be the case due to the Third World diplomatic orientations both bodies share. There is also the factor of both bodies seeking to promote a multipolar world so as to curb the unilateralism of the USA (this is another specific aspect I did not encounter within the Sino-African literature, again, probably due to an error on my part). To finish with this intriguing source, Cheng also informs us that Argentina (as well as Brazil, Venezuela and Mexico) has established a strategic partnership with China: I should like to investigate that in greater detail below.

  • Sino-Argentine Relations

A brief survey of press releases has shown that China and Argentina (as of November, 16, 2010) had formalized what has become called “trade peace” (Mercopress, 2010). Apparently China had “suspended soybean oil imports from Argentina from May to October” (Mercopress, 2010) after Argentina placed restrictions on Chinese imports during the GFC (Global Financial Crisis). We see that

Argentina is the world’s largest exporter of soybean oil, and China is one of its biggest customers — it supplies 70% of China’s soybean oil imports (4.6 million tons in 2009) for some two billion dollars a year…Argentina is the third largest supplier of agricultural products to China after the United States and Brazil, according to official statistics. (Mercopress, 2010)

I would recommend that the source above be taken with a grain of suspicion as it is from a media release. Nevertheless, it has been proving difficult to find academic papers (in English) on this topic which has forced me to move to this interesting, but second quality source type. We see from Argentina’s Agricultural Minister Julian Dominguez that “China is a strategic partner for Argentina’s consolidation as one of the world’s leading food suppliers, and our priority is strengthening our relations in the agro-industrial sector” (Mercopress, 2010).

Switching from news media sources, the Ministry of Foreign Affairs of the PRC has presented itself as a good source with an example below. The Chinese Government’s Official Web Portal also appears to be an equally good source for information on Sino-Argentine relations.[2] Of course, this is assuming the veracity of what is published on these sites.

China-Argentina trade dropped significantly in 2009 due to the impact of the international financial crisis, but China remained Argentina’s second largest global trade partner and largest purchaser of its agricultural products. The two sides had smooth cooperation in infrastructure, energy, mining, finance and telecommunication. In April, the two central banks signed an agreement on a 70 billion CNY/38 billion ARS currency swap arrangement. In October, the 17th session of the China-Argentina joint committee on trade and economy was held in Argentina. In December, Secretary of Transportation of the Ministry of Federal Planning, Public Investment and Services Juan Pablo Schiavi led a delegation to China and held discussions with the Chinese side on enhancing bilateral transport cooperation…Cooperation between parliaments, political parties, local governments and in culture, education, science and technology was deepened. A bilateral friendship group was established under the National People’s Congress. Minister Wang Jiarui of the International Department of the CPC Central Committee and Vice Chairman Zhao Jinjun of the CPPCC Foreign Affairs Committee visited Argentina. President of the Committee of Sports of the Chamber of Deputies Guillermo Pereira visited China. Local government leaders including Mayor Guo Jinlong of Beijing and Executive Vice Mayor Yang Xiong of Shanghai visited Argentina. The Confucius Institutes at the University of Buenos Aires and the National University of La Plata were established. (Ministry of Foreign Affairs, 2010)

Commensurate with this evidence, we learn from Guanqun (2010) that a strategic partnership between the two states had been inaugurated in 2004. It appears that this partnership is multifaceted: it deals not only with economics, but also diplomacy, development, and exchanges between civil societies for example.[3] Yet there is still this critique of limited investment which might hint at a flaw in the agreement or perhaps one area that is still lacking. López and Ramos (2007), for example, argue that Argentina is experiencing limited investment from the Chinese market but that it has enjoyed a rise in trade.

China es hoy un socio comercial clave para la Argentina, constituyéndose en el segundo destino de nuestras exportaciones y el tercer origen de las importaciones. Sin embargo, las ventas hacia China siguen siendo poco diversificadas (se concentran en el complejo sojero), en tanto que el comercio con aquel país sería, en promedio, destructor de empleo (especialmente en nuestras industrias trabajo-intensivas)… Las cifras sugieren que, a diferencia de lo ocurrido a nivel comercial, las relaciones argentino-chinas en materia de inversiones han sido hasta ahora de muy escasa dimensión. (López and Ramos, 2007: 69)

China is now a key trading partner for Argentina as it has become the second destination of our exports and the third source of our imports. However, sales to China remain poorly diversified (concentrated mainly in the soybean industry), while trade with that country may prove destructive to our employment rate (especially in our labour intensive industries)…The figures suggest that unlike with what happened at the commercial level, Argentine-Chinese relations concerning investment have been limited.

Tellingly, Pontón argues that China is a needed partner in the industrial restructuring of the soy bean industry in Argentina as China is perhaps the largest importer of this product. The argument is an interesting one because it shows that a) this shortage of primary materials in China may be common knowledge for economists in LAC and b) that this may pose as a central factor in bi-lateral relations.[4]

  • Conclusion

This brief survey of the literature (primarily in English) has shown us that Argentina and China have a growing interest in each other and that this is something which requires the greater attention of academia.  This is especially so as I found it difficult to find peer-reviewed articles in journals of high-standing concerning Sino-Argentine bilateral relations.

What, in my paltry opinion, appears striking in the literature is the way in which China’s foreign policy is engaging Argentina: there seems to be a sense of South-South relations and mutual respect which some may say is often a lacking feature in North-South relations. But it is more than that. There is almost a sense in the literature of the pressing nature of these agreements which might have to do with Argentina being a key agricultural player in China’s economy. The investigation of the Sino-Argentine strategic partnership of 2004 (and since then) would make for an important research paper if not a PhD for anyone interested in this subject.

 

Works Cited

Altenberg, Joeran. 2008. “China’s Engagement in Lateinamerika: Rohstoffbedarf, Versorgungssicherheit und Investitionen,” European Journal of East Asian Studies. 7(1): 158.

Anonymous, 2006. “Vaccines: Researchers’ work from the Peoples’ Republic of China and Argentina adds to Vaccines body of knowledge,” Science Letter, 2421.

Cheng, Joseph Y S. 2006. “Latin America in China’s Contemporary Foreign Policy,” Journal of Contemporary Asia, 36(4): 500.

De Oliveira, Henrique Altemani. 2006. “China-Brasil: perspectivas de cooperatión  Sur-Sur,” Nueva Sociedad, 203: 128.

Gallagher, Kevin P., and Roberto, Porzecanski. 2008. “China Matters: China’s Economic Impact in Latin America,” Latin American Research Review, 43(1): 185.

Guanqun, Wang. 2010. “Chinese Leaders Call for Stronger Links with Argentina,” Chinese Government’s Official Web Portal. Online Source: http://www.gov.cn/english/2010-07/14/content_1654298.htm. Accessed 11/04/2011.

Husar, Jörg. 2007. China’s Engagement in Latin America – Resource Needs, Security of Supply and Investment. Saarbrücken: Verlag für Entwicklungspolitik.

Jenkins, Rhys, Enrique Dussel Peters and Mauricio Mesquita Moreira. 2008. “The Impact of China on Latin America and the Caribbean,” World Development, 36(2): 235-253.

Jenkins, Rhys. 2010. “China’s Global Expansion and Latin America,” Journal of Latin American Studies. 42(4): 809.

Lederman, Daniel, Marcelo Olarreaga and Guillermo E. Perry (eds). 2008. China’s and India’s Challenge to Latin America: Opportunity or Threat? World Bank Publications.

Lee, Robert Q., and Michael Diaz Jr. 2009. “China’s Rising Interest in Latin America,” The China Business Review, 36(5): 18.

León-Manríquez, José Luis. 2006. “China-América Latina: una relación económica differenciada,” Nueva Sociedad, 203: 28.

López, Andrés and Daniela Ramos. 2007. “A la sombre del gigante chino: ¿hay lugar para la Argentina en el nuevo mundo?” Boletin Informativo Techint: 326.

Mercopress, 2010. “China and Argentina Formalize ‘Trade Peace’ and Become ‘Strategic Partners,’” Online Source: http://en.mercopress.com/2010/11/16/china-and-argentina-formalize-trade-peace-and-become-strategic-partners. Accessed 11/04/2011.

Ministry of Foreign Affairs of the Peoples’ Republic of China, 2010. “China and Argentina,” Online Source:http://www.mfa.gov.cn/eng/wjb/zzjg/ldmzs/gjlb/3453/t17332.htm. Accessed 11/04/2011.

Moreira, Mauricio Mesquita. 2008. “The Impact of China on Latin America and the Caribbean,” World Development, 36(2): 235.

Pautasso, Diego. 2010. “China’s place in brazilian trade/O lugar da China no comercio exterior brasileiro,” Meridiano 47: Boletim de Análise de Conjuntura em Relações Internacionais. (114): 25.

Pengue, Walter Alberto. 2006. “Agua Virtual, Agronegocio Sojero Y Cuestiones Económico Ambiantales Futuras,” FRONTERAS.

Pham, J Peter. 2010. “China’s Strategic Penetration of Latin America: What it Means for U.S. Interests,”American Foreign Policy Interests, 32(6): 363.

Pontón, Rogelio Tomás. 2009. “China y Argentina: hacia una mayor integración en el crushing de soja,”Invenio, 12(23): 7.

Santiso, Javier (ed). 2007. The Visible Hand of China in Latin America. Development Centre of the Organisation for Economic Co-operation and Development.

Han, Yan Ben, Dong Liu Wei, E Actis, R Podesta, Tan Quiang Wang, Tang Yong Guo,  Feng Qu, A M Pacheco, A A Gonzalez, E Alonso, Qing Ge Xiang, Dong Ping Huang, Zhi Qiang Yin. 2008. “Successful operation of a cooperative SLR station of China and Argentina in San Juan,” Chinese Science Bulletin, 53(16): 2417.


 

[1] This is probably the case because I likely missed these arguments in the Sino-African literature.

[2] Guanqun (2010), for example, tells us that China and Argentina have apparently formed a bilateral consensus based on “practical cooperation” and that this is something both countries are implementing. We see the signing of “six contract on railway technology, and electrification of lines” as well as twelve deals concerning areas “like transportation infrastructure, fisheries, energy, plant quarantine, and rail transport.”

[3] There has been some scientific cooperation between the two states (Han et al, 2008; Anonymous, 2006).

[4] León-Manríquez (2006) argues that Argentina benefited substantially from this increased Chinese demand for soybeans. There is also evidence from Pengue (2006:12) detailing that food security has become a matter of national security for China. He reasons this to be the case because, as of now, there is but 0.06 hectares of arable land per capita. This number, over the next two decades, is likely to decrease (as the population increases) to 0.025 hectares per capita and will probably result in an increase of agricultural imports from Argentina.

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