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

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

China is the second power in the world. 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 phenomenon that there has not yet been a systematization and a complete understanding of it,” he says. Francisco Urdinezprofessor at the Institute of Political Science and the Center for International Studies UC (CEIUC).

That is precisely what the new Millennium Nucleus that it leads seeks to do: to 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, since twenty years ago he was an irrelevant player in our economy.

Hence, this nucleus hopes to contribute, as its director explains, “in the formulation of foreign policy towards China, and provide innovative information that allows better understand the impacts that China causes throughout Chile, so that you can 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 last contest of the National Research and Development Agency (ANID)he Millennium Nucleus on the Impacts of China in Latin America and the Caribbean (Millenium Nucleus on the Impacts of China in LAC, ICLAC)brings together a team of researchers who already have a long history studying the Asian giant from areas as diverse as history, geography, international relations, communications and economics, among others.

“The core highlights the strong presence of China and the lack of joint research. And in that sense, it allows us to develop that potentiality”, says the alternate director of the ICLAC Millennium Nucleus, Maria Monttacademic at the Institute of History and researcher at the UC Asian Studies Center.

“For me, what is beautiful about the nucleus is that each one gives a very unique look at the phenomenon. When we all complement each other, it is possible -for the first time in Chile- to give a complex and much-needed view of the Chinese phenomenon… which is social, economic, political. It is a phenomenon that we try to define as transversal, it crosses all current public policies in Chile: vaccines, copper, industry and commerce, among others. The political relationship is crossed by the relationship with China”, affirms Francisco Urdínez.

as you add Johannes Rehner, main researcher of the Nucleus and director of the Institute of Geography: “Here at the Nucleus, for the first time, the questions and themes really arise from interdisciplinary work, from internal dialogue. We are looking at reality, which is not rooted in a single investigation, nor in a single discipline, but rather questions, theories, methodologies, that come from the exercise of an interdisciplinary dialogue”.

Different universities also participate in the nucleus, both from Santiago and from the regions. Along with the Universidad Católica, as the main institution, are the host institutions of the Universidad de Chile, the Universidad de Tarapacá and the Universidad Católica del Norte; in addition to an international advisory team. (See box at the end of the note)

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 projected three stages. The first -as Francisco Urdínez explains- is “generate a significant amount of data, not only from Chile, but from other countries in the region”. Is about select reference cases -such as mining in Peru or lithium in Bolivia- whose realities or problems can be assimilated to our country, where the presence of China has been very marked. “The idea is to use the region as a reference area, because there are a lot of cross-cutting issues and to analyze how this affects the presence of China in local communities,” he adds.

The second phase seeks understand why Chinese influence is much stronger in some areas than others. While the third and last step will be to extrapolate what has been analyzed to major trends in the region and power evaluate how China, as an economic actor, has generated political, social cleavages, and environmental externalities, among others, in different regions of South America. “There will be a great effort to systematize and quantify”, affirms 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 clients for natural resources, while they sell us products that we do not produce, or produce on a small scale. It’s a complementary relationship.”

However, the same is not happening 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, since 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 significant investment arrived and cases arose that were 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 the collaboration with institutions, both local and international. The latter will especially benefit postgraduate students, who will be able to deepen their training. In fact, a strong emphasis of this nucleus is the incorporation of doctoral and postdoctoral researchers, in order to generate critical mass on this topic.

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 more strength. And that somehow it will make us a benchmark within 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 kind of incubator to generate a larger ecosystem, with more research, in different areas”.

Another relevant purpose is training of human resources in the public sectorthrough training programs for public officials and diplomats, that generate longitudinal data that allow evaluating aspects such as public opinion and media coverage, job creation, environmental externalities, union and regulatory conflicts, investment and trade in China in Latin America.

Likewise, it seeks to increase the understanding of civil society regarding all the impacts that China generates on a national scale in the country. “Although the nucleus is focused on the training of students at the university level, we have also thought about how to train beyond the academy, make a contribution to society: impact the country’s education at a more macro level, also including basic education and a half”, adds María Montt.

Clearly, all of the above is well over the three year kernel lifetime. 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 the development of Chile for the next 20, 30 years. So, hopefully it will be the first project of many and everything we collect will serve to generate new projects, and thus be able to be more and more precise and specific in the analysis”.