The Influence Of China's Economic Activities On Latin America
Abstract
Since 2001, China has been expanding its influence into Latin America, but this phenomenon has remained relatively under examined. To help fill this gap, this thesis examines Chinas bilateral relationships with Peru and Ecuador and examines the effect of Chinas growing economic presence on their economic development. The main findings are that Chinas loans and investments have supplied Peru and Ecuador with very short-term economic advantages, but their increasing financial presence also has adverse consequences that will likely worsen over time. This thesis identifies two major negative effects of Chinas economic activity: 1) it exacerbates the resource curse through further deepening commodity dependence and undermining industrialization; and 2) increased Chinese investment in oil and mining provides short-term benefits, but also creates negative externalities such as pollution and deforestation, which are costly to address. In attempts to manage the China challenge, Peru relies on metal exports but successfully diversified into other service sectors, whereas Ecuador has been less successful in diversification, and its dependence on loans for oil has only deepened Ecuadors debt. This thesis makes recommendations on how these countries can maximize the benefits from Chinas growing economic presence, while minimizing the risks, and move toward more sustainable economic development.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jun 01, 2019
- Accession Number
- AD1080190
Entities
People
- David Delvalle
Organizations
- Naval Postgraduate School