What are the costs and opportunities of Chinese investment in Chile?

The objective of this multidisciplinary research team, led by UC and formed by researchers from the universities of Chile, Tarapacá and Católica del Norte, is to understand how the strong investment of the Asian giant has affected Latin America, especially in Chile, in order to evaluate public policies in this area, which seeks to become a reference center in the Global South.

China is the world's second largest power. And it is expected to be the world's largest economy between 2026 and 2030, with global consequences, including Latin America. "It has been such a big, big phenomenon that there has not yet been a systematization and a full understanding of it," he says. Francisco Urdinez, professor of the Institute of Political Science and the Center for International Studies UC (CEIUC).

This is precisely what the new Millennium Nucleus he leads seeks to do: deepen the understanding of the political consequences of China's "capital boom" in Latin America in the last twenty years, both in its socioeconomic and cultural dimensions.

In the region, 67% of its population lives in a country where China is the main economic partner. And Chile is one of the countries most economically dependent on China in the world. A surprising fact, given that twenty years ago it was an irrelevant player in our economy.

Therefore, as its director explains, this nucleus hopes to contribute "to the formulation of foreign policy towards China, and to provide innovative information that allows us to to better understand the impacts of China throughout Chile, in order to have a future projection and better understand what are the costs or opportunities that China has left in the last 20 years.".

Multidisciplinary research

Awarded in the latest competition of the National Agency for Research and Development (ANID), the Millennium Nucleus on the Impacts of China on Latin America and the Caribbean (ICLAC)brings together a team of researchers who already have a long history of studying the Asian giant from areas as diverse as history, geography, international relations, communications and economics, among others.

"The nucleus highlights the strong presence of China and the lack of joint research. And in that sense, it allows us to develop that potential," says the alternate director of the ICLAC Millennium Nucleus, María Montt, academic at the Institute of History and researcher at the Center for Asian Studies UC.

"For me, what's nice about the core, is that everyone gives a very unique look at the phenomenon. When we all complement each other, we manage -for the first time in Chile- to give a complex and very necessary view of the Chinese phenomenon...... which is social, economic and political. It is a phenomenon that we try to define as transversal, it crosses all current public policies in Chile: vaccines, copper, industry and trade, among others. The political relationship is crossed by the relationship with China", says Francisco Urdínez.

As Johannes Rehner, principal investigator of the Nucleus and director of the Institute of Geography, adds: "Here in the Nucleus, for the first time, questions and topics are really born from interdisciplinary work, from internal dialogue. We are looking at the reality, which is not rooted in a single research, nor in a single discipline, but in questions, theories, methodologies, which come from the exercise of an interdisciplinary dialogue".

The core group also includes the participation of several universities, both in Santiago and in the regions. In addition to the Catholic University, as the main institution, the host institutions are the University of Chile, the University of Tarapacá and the Catholic University of the North, as well as an international advisory team. (See box at the end of the article).

A comparative look

This Millennium Nucleus will be the first consolidated multidisciplinary group in Latin America and the Caribbean dedicated to studying the heterogeneous subnational effects of China's rise.

To achieve this, the nucleus has planned three stages. The first - as Francisco Urdínez explains - is "generate a significant amount of data, not only from Chile, but also from other countries in the region.". It is about select reference cases -the realities or problems of mining in Peru or lithium in Bolivia, for example, can be assimilated to our country, where China's presence has been very strong. "The idea is to use the region as a reference area, because there are a lot of issues that are cross-cutting and to analyze how this affects China's presence to local communities," he adds.

The second phase seeks to understand why the Chinese influence is significantly stronger in some areas than in others. The third and final step will be to extrapolate what has been analyzed to larger trends in the region and to be able to evaluate how China, as an economic actor, has generated political, social and environmental externalities, among others, in different regions of South America.. "There will be a very big effort of systematization and quantification," says the director.

The relationship between China and Chile has been rather complementary. As Johannes Rehner explains, in the Chilean case "the relationship with China has been simple, with very clear benefits: they have been our customers for natural resources, while they sell us products that we do not produce, or produce on a small scale. It is a complementary relationship".

However, the same is not true in the region. "In Brazil, for example, both countries are much more competitive at the consumer goods industry level. It is interesting to compare different cases, because until a few years ago, in Chile there was almost no relevant investment from China, until, for example, in some sectors, such as the provision of electricity, suddenly important investment arrives and cases emerge that are in development and that allow an evaluation to be made", adds the director of Geography.

China on the public agenda

An important aspect for the team is collaboration with institutions, both local and international. The latter will especially benefit graduate students, who will be able to deepen their training. In fact, a strong emphasis of this core is the incorporation of doctoral and postdoctoral researchers, in order to generate critical mass in this area.

As María Montt explains: "We hope that one of the results of this project will be the generation of a group, of a research dynamic on China, which will gain strength. And that somehow we will become a reference in South America".

And as the alternate director adds: "There are some centers that are already studying China in Latin America, but there is still a long way to go. And in that sense, this is a sort of incubator to generate a larger ecosystem, with more research in different areas.".

Another relevant purpose is the human resources training in the public sectorthrough training programs for public officials and diplomats that generate longitudinal data to evaluate aspects such as public opinion and media coverage, employment generation, environmental externalities, trade union and regulatory conflicts, and China's investment and trade in Latin America.

It also seeks to increase civil society's understanding of all the impacts that China generates on a national scale in the country. "Although the core is focused on training students at the university level, we have also thought about how to train beyond the academy, making a contribution to society: impacting the country's education at a more macro level, also including basic and secondary education," adds María Montt.

Clearly, all of the above exceeds the three-year duration of the core. This is why one of its objectives is to put the issue of China on the table. As Francisco Urdinez explains, this topic "is a long-term research agenda. It is an agenda that will accompany Chile's development for the next 20, 30 years. So, hopefully this will be the first of many projects and everything we gather will serve to generate new projects, and thus be increasingly more precise and more specific in the analysis".

Source: UC

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