Latin America and China’s Transnationalizing Oil Industry: A Political Economy Assessment of New Relations

Abstract

Chinese oil companies have recently started to set up operations in Latin America, and they are doing this at a rapid pace. This article aims to provide an overview of the increasing flows of oil and capital (fdiand credit) between Latin America and China, and to clarify how they interact with the broader Sino-Latin American relations as well as Latin America’s changing political landscape. In addition to regional trends, the cases of Venezuela, Brazil and Ecuador are discussed. The article combines an assessment of factual data with an analysis of the broader political economy context in which these new oil relations operate. Next to national differences, three general tendencies stand out: first, the type of arrangements and coordinated activities that Chinese companies, banks and government agencies deploy differ from those of other large oil-seeking nations; second, while the arrival of Chinese capital is welcomed by Latin American governments and pictured as part of non-imperialist South-South relations, Chinese oil companies and loans are sometimes criticized in local media by scholars, opposition andngos; and third, Chinese oil imports and investments have added to changing attitudes and policies towards strategic sectors under new political regimes, which allows for more social spending but which critics have labeled as the return to an ‘extractivist model.’