Q&A
Matt Ferchen
{
"authors": [
"Matt Ferchen"
],
"type": "legacyinthemedia",
"centerAffiliationAll": "",
"centers": [
"Carnegie Endowment for International Peace",
"Carnegie China"
],
"collections": [
"China and the Developing World",
"China’s Foreign Relations"
],
"englishNewsletterAll": "",
"nonEnglishNewsletterAll": "",
"primaryCenter": "Carnegie China",
"programAffiliation": "",
"programs": [],
"projects": [
"Carnegie Oil Initiative"
],
"regions": [
"North America",
"South America",
"East Asia",
"China"
],
"topics": [
"Economy",
"Climate Change",
"Foreign Policy"
]
}
Source: Getty
In The Media
Is China's Latin America Strategy Changing Course?
China continues to view Venezuela as a key source of oil, but Beijing has also been strengthening its private and public energy partnerships with other Latin American countries.
By Matt Ferchen
Published on Jun 26, 2015
Source: Inter-American Dialogue
Inter-American Dialogue: Chinese Premier Li Keqiang in late May made a four-nation tour of Latin America where a number of energy-sector deals were announced, including at least $7 billion in financing for Brazil’s struggling oil company, Petrobras, as well as an announcement that China’s BYD Co. will build a solar-panel factory in Brazil. How is China’s energy engagement with Latin America evolving? Is the Asian giant beginning to orient more toward Pacific Alliance countries and away from Argentina, Ecuador and Venezuela, which have been the focus of most regional Chinese lending until now?
Matt Ferchen: China’s energy engagement with Latin America is likely to retain significant elements of current relationships while at the same time seeking to expand into new areas. China’s most significant and most problematic energy relationship in Latin America is with Venezuela, and this is unlikely to change. Despite the many problems of Venezuela’s oil sector, the country still maintains the world’s largest petroleum reserves, and China has built up a massive, if dysfunctional, loans-for-oil relationship with the country, which will be difficult for either side to unwind.China will also certainly seek to take advantage of low fossil fuel prices to gain further access to sources of oil and gas in its other Latin American energy partners like Ecuador, Brazil, Argentina and Colombia. At the same time, China is looking to expand the type and range of its energy cooperation with Latin America, including in alternative energy sources like solar and wind. Chinese companies have also been active in seeking electricity production and grid investment opportunities in the region, including in countries like Brazil and Chile.
As Chinese firms seek deeper energy ties to the Pacific Alliance, they will very likely be unable to leverage state-to-state financing deals like those established with Venezuela or Ecuador but instead will find more success through private investment or possibly new types of public-private partnerships.
About the Author
Matt Ferchen
Former Nonresident Scholar, Carnegie-Tsinghua Center for Global Policy
Ferchen specializes in China’s political-economic relations with emerging economies. At the Carnegie–Tsinghua Center for Global Policy, he ran a program on China’s economic and political relations with the developing world, including Latin America.
- How China Is Reshaping International Development
- Why Unsustainable Chinese Infrastructure Deals Are a Two-Way StreetArticle
Matt Ferchen, Anarkalee Perera
Recent Work
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
More Work from Carnegie Europe
- Taking the Pulse: Is Burnham’s EU Policy Bold Enough?Commentary
Resetting relations with the EU is a central plank of the UK’s current foreign policy. Is Andy Burnham being bold enough or is he falling into the same trap as his predecessors, misreading the power dynamic?
Rym Momtaz, ed.
- Europe Needs its own Sanctions-Enforcement MuscleCommentary
The EU can impose sanctions but struggles to enforce them without the United States. With Washington increasingly disinterested in backing European interests, the bloc must now fend for itself.
Nicu Popescu, Tiago Antunes
- Containing Escalation in the Black SeaCommentary
Russia is testing the waters of NATO’s mutual defense clause. What do strikes in Romanian territorial waters mean for the alliance’s posture toward Moscow?
Dimitar Bechev
- Taking the Pulse: Does the EU Have a France Problem?Commentary
With its public finances in shambles, the far right polling at 35 percent ahead of the 2027 presidential election, and a growing protest movement, is France’s crisis a threat to the EU’s geopolitical awakening?
Rym Momtaz, ed.
- Trump Blindsides Ukraine But Gives Europe an OpportunityCommentary
Ahead of a tough winter for Ukraine, Donald Trump’s swing back toward Russia bodes ill. But instead of panicking, Kyiv’s European allies are focusing on action.
Rym Momtaz
