Evaluating Chinese Economic Engagement in Africa versus Latin America

Abstract

AbstractSince the early 2000s, when China joined the World Trade Organization and the Chinese government announced an official ‘going out policy’ to encourage economic engagement beyond China's territorial borders, growth of Chinese foreign direct investment (FDI) and trade with both Africa and Latin America has risen exponentially. Reasons for this rise include (1) Chinese economic actors' view that expansion within these former European colonial regions is critical for accessing primary resources and new markets and (2) leadership in Beijing's view that its legitimacy continues to be based on economic growth. Given China's recent bleak economic forecast and plunging stock market, an increase in Chinese overseas economic engagement in Africa and Latin America warrants a closer examination of the ‘Chinese model’ of economic expansion in the developing world and implies that the Chinese economy may be more dependent on connections with these regions than has been previously suggested. By distinguishing the political economic forces at play, on the ground, in Africa from those in Latin America, Chinese economic engagement tactics in these regions can be more accurately understood as a set of dependent and negotiated processes that are location specific.