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China's Rise in South America: The Partner of Choice

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Technical Report

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Naval Postgraduate School Monterey United States

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As Chinese investment in South America has grown exponentially and influenced the region, has South America benefited from the investment This paper features case studies of both Venezuela and Argentina to illustrate how Chinese investment has had different effects on these two economies. Venezuela has relied heavily on loans-for-oil to fuel its socialist economy and feed its political structure, resulting in very negative outcomes. On the other hand, Argentina has channeled Chinese investment mostly into infrastructure, such as energy diversification projects, with the construction of two hydroelectric dams, two nuclear reactors, and upgrades to its outdated railway systems. Chinese investment can boost South American economies if it is used for infrastructure that will lead to less reliance on additional Chinese loans. Unfortunately, both countries rely heavily on raw material exports and need to ensure that manufacturing and technology-based jobs are not lost in the process. As China gains more influence in the region, the United States needs to provide alternate sources of investment and bring to light the pitfalls created by the current Sino-South America partnership.

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  • Government and Political Science
  • Economics and Cost Analysis

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