Chinese Investment in Latin America: A New Kind of Development?

It’s widely known that China has invested enormously in Africa in recent years. What might be less common knowledge is that Chinese investment in Latin American infrastructure and development projects has also grown at breakneck speed over the past few years. And in January 2015, Chinese President Xi Jinping pledged that China would invest $250 billion dollars in Latin America in the coming ten years. Yet this investment has often supported controversial projects such as a transcontinental railroad, the polemical $50-billion Nicaraguan canal, as well as mining, dams, and other projects.

One such project is the Chinese-owned Las Bambas copper mine in Peru. As I scanned my Los Angeles Times this morning, I was surprised to find the article “Blood in Peru at a China-owned mine,” by Jonathan Kaiman, which tells of the death of Beto Chahuallyo, a Peruvian killed by police while protesting the Las Bambas mine. In fact, Kaiman writes that labor organizers and protesters against Chinese-backed resource extraction and energy projects in Honduras, Ecuador, and other parts of Peru have been killed by police or mysteriously disappeared in the past two years.

While these deaths are horrible enough already, there is also an eerie historical echo in these stories. Latin American protesters have lost their lives fighting foreign development for over a hundred years. In perhaps the most famous incident, the Colombian banana massacre of 1928, Colombian workers striking for better working conditions in U.S.-owned United Fruit banana plantations were murdered by machine gun fire. Indeed, ever since the colonial period, outside economic powers have come to Latin America to extract resources—from gold and silver to copper and nitrates, to fruit and sugar—with little or no respect for the wishes of Latin Americans themselves.

Yet Chinese President Xi describes his plan for massive investment in Latin America as South-South cooperation, characterizing it as a program of mutual aid between developing countries, without the involvement of developed countries. This seems to cast the program in a different light than earlier investment programs by the U.S., for instance—two developing countries should be on the same side. Yet while China’s low per-capita income may prevent the nation from being described as a developed country, China also has the world’s second-largest economy, after the United States. And this investment pattern of resource extraction—in the Peruvian case, copper mining—for the benefit of China, and at the expense of Peruvian workers, seems to echo earlier investment patterns in Latin America by Europe and then the United States. Is this really South-South cooperation, or is it a yet another version of the Latin American story of colonialism and neo-colonialism, direct investment that produces dependency? Who actually benefits from Chinese investment in Latin America?


Not only is the historical pattern of such investment striking, but so are the actual words Kaimain uses to describe the development program associated with the Las Bambas mine in “Blood in Peru.” Kaiman states that the mine, which opened under Swiss ownership, “has boosted the local economy and helped modernize the region.” He further describes Nueva Fuerabamba, a new town built for people displaced by the mine, as “a model of progress, with freshly-paved roads, 441 sturdy houses, a health clinic, running water, and three churches.” This contrasts with Challhuahuacho, a “ramshackle” town on the outskirts of the mine. It is in Challhuahuacho where protester Beto Chahuayllo was killed by police during a protest against the Las Bambas project last September.

I would like to scrutinize the language of progress and modernization with which Kaiman describes Nueva Fuerabamba, especially juxtaposed against Challhuahuacho. “Modernizing the region” and “model of progress” are terms that have been used to describe Western settlements in Latin America since at least the 19th century. This was when such terms replaced the earlier description of Europeans coming in with their “civilizing” mission—one main justification of colonization. However, the fact remains that such “civilizing” and “modernizing” settlements brought slavery, massacred and oppressed indigenous peoples, and imposed outsider values on already existing communities across the American continents.

Given this history, we should beware of the rhetoric of modernity. While a health clinic, running water, and new houses may very well benefit the new residents of Nueva Fuerabamba, what else is implied when the new, Chinese-invested town is described as “progress” and the old one as “ramshackle,” when residents of the old town are those who are dying in protest? Did the residents of Nueva Fuerabamba have a say in their relocation? Are they active agents in their “modernization,” or are they recipients of an outside plan for their supposed benefit? Were residents of Challhuahuacho offered relocation, and would they have wanted it? Who is the relocation really benefiting—those few Peruvians who are offered new homes (while many more are not offered new homes, yet must still accept the mine) or the Chinese investors profiting off copper extraction? While Kaiman recognizes that the mine has “brought little benefit to many others who live near it”—such as Beto Chahuayllo, the murdered protester—he still calls the new Chinese-funded mining town a “model of progress.” Progress on whose terms? Whose modernization? The perception of native Latin Americans as backward, underdeveloped, and stuck in the past has persisted from colonization until today, but we need to question this perception before repeating it.

Chinese investment in Latin America is a major change from past investments in Latin America in one important way: China is not the West. The new investment is coming from Asia, not from Europe or North America. This does open the possibility of South-South cooperation and a different kind of development in Latin America, perhaps one more to the benefit of Latin Americans themselves. However, the patterns of Chinese investment in Peru and other Latin American countries seem to follow earlier patterns of resource extraction and development that benefit the investor to the detriment of Latin American nations themselves. And not only does the structure of the investment echo the past, but the very rhetoric of progress used to describe such projects also recalls earlier processes of outsider investment in the region. Let us question this recycled rhetoric and this recycled plan for outside-imposed development. Can foreign investment ever genuinely improve Latin American conditions? Is there a way for Chinese investment to step outside the pattern of investment that only benefits China but not the national pueblo? Perhaps Latin Americans themselves must find a way to shake off their neo-imperialist investors and create the change they need from within.