A Review of China’s and Japan’s International Engagement in South America: The Cases of Brazil, Chile and Venezuela

Discussion Papers

No.785

by Gabriel Garcia

May 2020

ABSTRACT

The twenty-first century has been declared the ‘Asian Century’ with experts predicting the region will contribute 52% of the global gross domestic product by 2050. While the rise of Asia in the last fifteen years is apparent in terms of trade, investment and international financial cooperation, government officials in South America have shown little enthusiasm for understanding the implications of Asia’s economic progress, and South American governments have not designed a strategic plan to guide policymakers, businesses and the broader community to engage effectively with Asia. Whether or not South America can continue profiting from the rise of Asia will depend on many factors including a better understanding of the growing wealth of the East and a thoughtful planning that considers the comparative advantages of each country and how they can best be positioned to engage in win-win relations.

This article aims to contribute to a better understanding among South American stakeholders of Asia’s growing relevance in global matters. Its central discussion compares China’s and Japan’s engagement with the region and focuses on three case studies: Brazil, Chile and Venezuela. It argues that Japan has opted to engage with South America using institutionalised instruments of International Law (e.g. free trade agreements and memberships in regional multilateral institutions) while China has designed a platform that combines the same instruments of International Law used by Japan as well as informal mechanisms (e.g. strategic partnerships and the China-CELAC Forum), giving preference to the latter over the former.

Keywords: Japan-South America, China-South America, Asia-Latin America, China-CELAC Forum, Inter-American Development Bank, South-South cooperation, Japan development assistance, China development assistance, FEALAC, Belt and Road Initiative, Brazil, Chile, Venezuela

JEL classification: K33

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