Chinese Foreign Direct Investment and Argentina: Unraveling the Path

Abstract

This article explores the political economy of Chinese outward foreign direct investment (FDI) in Argentina during the reign of Nestor Kirchner and Cristina Fernandez. Among other things, it contemplates possible links between Chinese outward FDI (OFDI) volumes and Argentina’s domestic and foreign policies. It also analyses a mixture of successful and unsuccessful Chinese investment cases in the agricultural, chemical, and banking sectors in order to engage the debate about the drivers of Chinese OFDI (COFDI), with some stressing business and economic factors and others emphasizing the primacy of political factors. In regards to the former, my study shows that Argentine policymakers did not offer special accommodations to Chinese investors despite the pro-China proclivities of Argentine leaders and their country’s economic and political need for China. Moreover, at the local level, Argentine politics actually proved to be an obstacle to successful Chinese deals. As for the latter issue, Chinese companies were not inclined to invest in Argentina because of the China stance of the Argentine government, but rather because they saw opportunities to exploit fertile agricultural soil, special tax regimes for investors, and opportunities to integrate into global value chain. My findings have a number of important theoretical and policy implications.

This is a preview of subscription content, log in to check access.

Notes

  1. 1.

    https://www.aei.org/china-global-investment-tracker/?ncid=txtlnkusaolp00000618, The CGIT dataset draws upon announcements of investments of Chinese companies abroad with values over USD $100 million

  2. 2.

    Later, I plan to examine what factors differentiate successful from unsuccessful Chinese investments in Argentina.

  3. 3.

    Except as otherwise noted, all amounts specified herein are in US Dollars (USD).

  4. 4.

    Even though the CGIT excludes lower value transactions, the total COFDI in Argentina in this dataset is bigger than the ones already mentioned in this paper. According to the CGIT the stock of COFDI in Argentina by 2014 was USD$ 9,5 Billion USD.

  5. 5.

    Interview with Argentinean diplomat in 2017

  6. 6.

    Interview in 2016.

References

  1. 1.

    Barilochense. 2011. Sodero Nievas avala suspender la aplicación del convenio agroalimentario con China. Barilochense.

  2. 2.

    Baškarada, S. 2014. Qualitative case study guidelines. The Qualitative Report 19 (40): 1–25.

    Google Scholar 

  3. 3.

    Blanchard, J.-M.F. 2011. Chinese MNCs as China’s new long march: a review and critique of the western literature. Journal of Chinese Political Science 16 (1): 91–108.

    Article  Google Scholar 

  4. 4.

    Blanchard, J.-M.F. 2016. The political economy of China’s contemporary Latin American relations: issues, findings, and prospects. Asian Perspective 40 (4): 553–578.

    Article  Google Scholar 

  5. 5.

    Blanco, J. 2011. Busca ingresar en el país el mayor banco chino y va por el Standard. La Nacion.

  6. 6.

    Cardoza, G., G. Fornes, P. Li, N. Xue, and S. Xu. 2015. China goes global: public policies’ influence on small- and medium-sized enterprises’ international expansion. Asia Pacific Business Review 21 (2): 188–210.

    Article  Google Scholar 

  7. 7.

    Clarin. 2010. Malestar oficial con China por la crisis de la soja: citan al embajador. Clarin.

  8. 8.

    Clarin. 2010. Polémica por una inversión china en Tierra del Fuego. Clarin.

  9. 9.

    Clarin. 2011. Cresud negocia asociarse con una empresa china. Clarin.

  10. 10.

    Creutzfeldt, B.H. 2016. Not all plain sailing: opportunities and pitfalls for Chinese Investment in Peru. Asian Perspective 40 (4): 603–626.

    Article  Google Scholar 

  11. 11.

    Delía, C., C. Galperín, and N. Stancanelli. 2008. El rol de China en el mundo y su relación con la Argentina. Revista del CEI 13: 67–89.

    Google Scholar 

  12. 12.

    Dinatale, M. 2014. Polémica por una estación espacial de China en el Sur. La Nacion.

  13. 13.

    Dinatale, M. 2015. Susana Malcorra: Vamos a desideologizar la política exterior. La Nacion.

  14. 14.

    Dinatale, M. 2015. La base militar china en Neuquén no podrá usarse con fines militares. La Nacion.

  15. 15.

    Dunning, J. 1979. Toward an eclectic theory of international production: Some empirical tests. Journal of International Business Studies 11 (1): 9–31.

    Article  Google Scholar 

  16. 16.

    El Cronista. 2015. Carta de Macri a China: los acuerdos podrían ser inconstitucionales. El Cronista.

  17. 17.

    El Territorio. 2011. Oficializaron una nueva Ley de Tierras que rige en todo el país. El Territorio.

  18. 18.

    Ellis, R.E. 2014. China on the ground in latin America: challenges for the chinese and impacts on the region (The Political Economy of East Asia). New York: Palgrave Macmillan.

    Google Scholar 

  19. 19.

    Galak, O. 2011. Invierten 1000 millones de dólares para fabricar urea. la Nacion.

  20. 20.

    Hogget, L. 2013. Uncertainty surrounds TDFEQ's proposed urea project in Tierra del Fuego. BN Americas.

  21. 21.

    ICBC. 2007. ICBC to Pay $5.6 Billion for Stake in Standard Bank. ICBC.

  22. 22.

    Infocampo. 2010. El gobernador de Río Negro ya está en China para atraer inversiones agrícolas. Infocampo.

  23. 23.

    Infocampo. 2016. China continúa bloqueando las importaciones argentinas de aceite de soja. Infocampo.

  24. 24.

    Jie, G., and M. Myers. 2017. Chinese agricultural Investment in Latin America: less there than meets the eye? In The political economy of China–Latin America relations in the new millennium: brave new world, ed. M. Margaret and W. Carol, 92–114. New York: Routledge/Taylor and Francis.

    Google Scholar 

  25. 25.

    Kwok, D., and D. Dolan. 2011. China's ICBC to take over Standard Bank Argentina. Reuters.

  26. 26.

    La Nacion. 2008. Empresas, planta de methanol. La Nacion.

  27. 27.

    La Nacion. 2010. Empresas, avanzada China en el sur. La Nacion.

  28. 28.

    La Nacion. 2017. La base china en la Patagonia. La Nacion.

  29. 29.

    Laufer, R. 2011. Argentina–China: New courses for an old dependency. Latin American Policy 4 (1): 123–143.

    Article  Google Scholar 

  30. 30.

    Longoni, M. 2011. En medio de la polemica, los chinos ya trabajan en Rio Negro. Clarin.

  31. 31.

    López, A., and D. Ramos. 2014. Argentina y China: nuevos encadenamientos mercantiles globales con empresas chinas. Los casos de Huawei, CNOOC y Sinopec. In La inversión extranjera directa de China en América Latina: 10 estudios de caso, ed. E.D. Peters, 13–59. Mexico: Unión de Universidades de América Latina y el Caribe.

    Google Scholar 

  32. 32.

    Lu, J., X. Liu, M. Wright, and I. Filatotchev. 2014. International experience and FDI location choices of Chinese firms: the moderating effects of home country government support and host country institutions. Journal of International Business Studies 45 (4): 428–449.

    Article  Google Scholar 

  33. 33.

    Luo, Y., Q. Xue, and B. Han. 2010. How emerging market governments promote outward FDI: experience from China. Journal of World Business 45 (1): 68–79.

    Article  Google Scholar 

  34. 34.

    Ministerio de Relaciones Exteriores y Culto. 1995. Acuerdo por canje de notas entre el Gobierno de la República Argentina y el Gobierno de la República Popular China para el Establecimiento de una Consulado General en Shanghai. Beijing.

  35. 35.

    Ministerio de Relaciones Exteriores y Culto. 2000. Negociaciones entre el Gobierno de la República Argentina y el Gobierno de la República Popular China para el ingreso de la República Popular China a la Organización Mundial de Comercio. Buenos Aires.

  36. 36.

    Ministerio de Relaciones Exteriores y Culto. 2004. Memorandum de Entendimiento sobre Inversiones entre el Ministerio de Economía y Producción de la República Argentina y el Ministerio de Comercio de la República Popular China. Beijing.

  37. 37.

    Ministerio de Relaciones Exteriores y Culto. 2004. Memorándum de Entendimiento entre la República Argentina y la República Popular China sobre Cooperación en Materia de Comercio e Inversiones. Buenos Aires.

  38. 38.

    Ministerio de Relaciones Exteriores y Culto. 2010. Memorándum de Entendimiento entre el Gobierno de la República Argentina y el Gobierno de la República Popular China para Expandir y Diversificar su Relación en Materia de Comercio e Inversiones. Beijing.

  39. 39.

    Ministerio de Relaciones Exteriores y Culto. 2010. Declaración Conjunta entre la República Argentina y la República Popular China. Beijing.

  40. 40.

    Ministerio de Relaciones Exteriores y Culto. 2014. Declaración Conjunta sobre el Establecimiento de la Asociación Estratégica Integral entre la República Argentina y la República Popular China. Buenos Aires.

  41. 41.

    Ministerio de Relaciones Exteriores y Culto. 2015. Declaración Conjunta sobre el Fortalecimiento de la Asociación Estratégica Integral entre la República Argentina y la República Popular China. Beijing.

  42. 42.

    Obarrio, M. 2014. Cristina y Xi Jinping acordaron inversiones por US$ 7500 millones. La Nacion.

  43. 43.

    Obarrio, M. 2015. Cristina firmó 15 convenios con China y ofreció invertir en recursos naturales. La Nacion.

  44. 44.

    Olivera, F. 2017. El Gobierno quiere que China financie dos nuevas centrales nucleares. La Nacion.

  45. 45.

    Orihuela, R. 2011. Chinese agro giant to invest $1.5b in Argentina. China Daily.

  46. 46.

    Oviedo, E.D. 2010. Historia de las relaciones internacionales entre Argentina y China 1945-2010. Buenos Aires: Dunken.

    Google Scholar 

  47. 47.

    Oviedo, E.D. 2012. Argentina y China: causas de la disputa en torno al aceite de soja. Estudios de Asia y África: 337–376.

  48. 48.

    Oviedo, E.D. 2013. Argentina facing China: modernization, interests and economic relations model. East Asia 30 (1): 7–34.

    Article  Google Scholar 

  49. 49.

    Oviedo, E.D. 2015. Argentina and China: an analysis of the actors in the soybean trade and the migratory flow. Journal of Chinese Political Science 20 (3): 243–266.

    Article  Google Scholar 

  50. 50.

    Ramasamy, B., M. Yeung, and S. Laforet. 2012. China’s outward foreign direct investment: Location choice and firm ownership. Journal of World Business 47: 17–25.

    Article  Google Scholar 

  51. 51.

    Roman, V. 2015. Un proyecto polémico, La estación espacial china empezará a funcionar en 2016. La Nacion.

  52. 52.

    Romig, S. 2011. Hungry China Shops in Argentina. Wall Street journal.

  53. 53.

    Sauvant, K.P., and C.V. Zitian. 2014. China’s regulatory framework for outward foreign direct investment. China Economic Journal 7 (1): 141–163.

    Article  Google Scholar 

  54. 54.

    Sina. 2011. 北大荒15亿美元阿根廷 种地. Sina.

  55. 55.

    Standard Bank. 2011. ICBC to acquire controlling shareholding in Standard Bank Argentina. Standard Bank.

  56. 56.

    Tierra del Fuego Government. 2016. Decree 1426/16. The government terminate the Chinese agreement. Ushuaia, Argentina.

  57. 57.

    Urdinez, F., J. Knoerich, and P. Feliú Ribeiro. 2016. Don’t cry for me “Argenchina”: unraveling political views of China through legislative debates in Argentina. USP and King’s College London Working Paper.

  58. 58.

    Wang, H. 2012. Ten Chinese going global models: emerging patterns and analysis. The European Journal of Finance 20 (7-9): 625–636.

    Article  Google Scholar 

  59. 59.

    Xia, J., X. Ma, J.W. Lu, and D.W. Yiu. 2014. Outward foreign direct investment by emerging market firms: a resource dependence logic. Strategic Management Journal 35: 1343–1363.

    Article  Google Scholar 

  60. 60.

    Zhang, J., J. Jiang, and C. Zhou. 2014. Diplomacy and investment–the case of China. International Journal of Emerging Markets 9 (2): 216–235.

    Article  Google Scholar 

  61. 61.

    Ziggers, D. 2011. China invests in Argentinean farmland.). All about feed.

  62. 62.

    胡军华. 2011. 北大荒将赴阿根廷种地业内称难解中国大豆危局. 第一财经日报.

Download references

Acknowledgements

This is a revised version of a paper presented at the 30th Annual Meeting of the Association of Chinese Political Studies, Nankai University, Tianjin, China. The author would like to thank the participants on the “China’s Trade and Investment Relations with Latin America Panel” for their useful feedback and suggestions and especially the special issue editor Jean-Marc F. Blanchard for his substantial guidance regarding content and editorial issues. The author also would like to thank his two anonymous interviewees, both government officials, for their contribution.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Javier Luque.

Appendix

Appendix

Table 5 Summary of left governments in LA

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Luque, J. Chinese Foreign Direct Investment and Argentina: Unraveling the Path. J OF CHIN POLIT SCI 24, 605–622 (2019). https://doi.org/10.1007/s11366-018-09587-7

Download citation

Keywords

  • Chinese outward foreign direct investment
  • Argentina
  • Kirchnerism
  • China