China’s Economic Strategy in Latin American and Caribbean Countries

Abstract

The article analyzes the patterns of formation and development of China’s economic strategy in Latin America and the Caribbean (LAC) from 2008 to 2023. The object of study is the economic strategy of the PRC, and the subject is the Latin American direction of the strategy. The hypothesis is that China’s economic ties with countries are a specific variation of “center-periphery” relations. These ties arose as a result of the development of a new economic model of China from the late 1990s to the mid‑2000s. This model is characterized by a focus on domestic demand and capital export while maintaining a high level of state participation. The global financial and economic crisis of 2008 created more favorable conditions for the penetration of Chinese companies into Latin America. LAC countries had to compensate for losses from the decline in demand from traditional partners. China, in turn, needed labor and resource sources. These relationships intensified after a sharp drop in commodity prices in 2014. Moreover, in this case, the advantages of the Chinese economic model over the traditional partners of the region allowed to strengthen the presence even more, offering better conditions in the field of trade, investment, and finance. The analysis of trade, investment, infrastructure projects, and finance showed that China is forming its version of “center-periphery” relations with LAC countries based on the dominance of state-owned companies. Unlike the traditional model, which is based on the need for investment return and a high level of profitability, China is building its production infrastructure, increasing the level of economic development of LAC countries. At the same time, in recent years, negative trends can be traced in a number of directions of China’s foreign economic activity in the region, which can become a challenge for the set goal – to achieve the status of one of the leaders.