Daniel Maia - Chinas Trade and the Perception of Complementarity in the Automotive Sectors of Chile...

中拉经济关系：以中国与智利、巴西汽车贸易为核心的考

察

China’s Trade and the Perception of Complementarity in the

Automotive Sectors of Chile and Brazil

作者姓名：Daniel de Castro Maia

专业名称：国际关系

指导教师：刘德斌教授

宋鸥教授

学位类别：全日制硕士

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学科专业：国际关系

论文题目：中拉经济关系：以中国与智利、巴西汽车贸易为核心的考

察

作者签名：指导教师签名：

年月日

作者联系地址（邮编）：吉林大学公共外交学院（130012）

作者联系电话：0431-85166657

I

中文摘要

在过去几十年间，中国与拉美国家的政治和经济关系不断增强，以至于对

于新的现实形成了两种清晰但相反的观点：乐观与悲观。中国政府和学者持乐

观的态度，认为中国与拉美国家关系的改善是互补性的并将使各方受益。

然而，在拉美国家的民意调查显示，每一个国家对中国影响的看法是不同

的，这表明在这一地区各国对“互补性”的看法不一样。在南美，智利对中国

持有最少的负面观点，而巴西对中国的负面看法最多。在本文中，我认为中国

政府提出与拉美国家的“互补性”假说在一些案例中是无效的，并探讨了智利

和巴西持不同观点的原因。

本文提出的第一个研究的问题是：“为什么智利和巴西就中国在该地区的影

响持有不同看法”。通过对中智关系和中巴关系的历史的分析，我认为中智关系

一直集中于贸易，中国经济在智利的发展被视为与智利的利益是互补的。另一

方面，中巴关系专注于传统上的战略领域，如核能和空间合作、多边外交等。

尽管贸易是中巴关系的一部分，但巴西是工业国家，中国经济在巴西的发展与

巴西几个工业部门是非互补的。

本文旨在提出一种看待中国与拉美各国关系的新方法，主要叙述中国与拉

美国家关系的多样性，而不是探讨中国在拉美的发展是积极地还是消极的。从

这个角度看，在拉美的每个国家既有人认为中国是互补性的合作伙伴，也有人

反对与中国关系的加强。因此，不能说中国与拉美国家从整体上是互补的或非

互补的伙伴。

由于智利和巴西利益集团对中国经济在两国的发展持不同的意见，分析了

中国汽车进入智利和巴西市场后两国汽车行业发展的案例。之所以选择汽车行

业是因为两个国家对中国政府认为的互补性发展持相反的观点。

本文的第二个研究问题是中国忽略拉美国家存在的地区性差异如何影响了

其在智利和巴西的汽车贸易。

为了回答这个问题，首先叙述了智利和巴西汽车行业的发展历史。在智

利，近几十年来，政府政策鼓励不同国家包括中国的产品进口，逐渐地削弱了

国内生产的力量。而巴西实施相反的政策，把汽车行业确立为最重要的经济支

II

柱行业之一。目前，国内生产占据了巴西工业 GDP 的 20％，并有强大的游说力

量。在此背景下，在巴西中国汽车的进口遭到了国内行为体的强烈反对。

虽然智利和巴西的汽车行业对中国进口有十分不同的看法，但中国在两个

市场的做法是相似的即试图以同样的方式出口车辆。由于对互补性的不同看

法，最近智利成为中国汽车在拉丁美洲的首选目的地，而巴西已经通过了几个

保护主义措施以阻碍中国进入其庞大的本地市场。

在叙述完历史后，我认为智利和巴西的汽车行业的历史发展遵循了不同的

道路，导致智利对中国进口是友好的，而巴西是封闭的，这反映了两国政府的

政策。在这个意义上，中国汽车进入智利市场提升了中国作为一个互补性的合

作伙伴关系，但在巴西是相反的。

为了分析智利和巴西汽车行业对中国进口的互补性观点，本文采用了罗伯

特·帕特南的“双层次博弈论”。这个方法论是一种有价值的方法，不仅可以了

解国内利益集团和国际社会的动态，而且有助于理解影响中国观的因素。

根据双层博弈理论，获胜集合（国际协议能够增加在相关国内民众中必要

的多数）直接影响国际协议的可能性。把这种理论运用于我的案例，大的获胜

集合代表国内民众愿意与中国建立合作伙伴关系，体现了高互补性。另一方

面，小的获胜集合代表与中国达成协议的可能性很小，体现了国内民众的非互

补性观。大双赢盛行于智利，而小双赢存在于巴西。

总之，我认为中国政府应该在拉美地区寻求多样性的中国观，而不是专注

于谋求适合整个地区的政策。中国在这一地区的成功与理解拉美国家对中国的

期望和看法的能力有直接关系，中国应该将注意力放在那些彼此视对方为互补

性伙伴的地区。此外，我提出了一些未来合作的建议和某些被巴西视为具备互

补性的领域。

关键词：

汽车制造业；互补性；贸易；中国；巴西；智利

III

ABSTRACT

The intensification of Sino-Latin American economic and political relations in the

last decades has created two clear and opposite views concerning this new reality:

optimistic and pessimistic. The Chinese government and scholars often spread the

optimistic view, considering that the improvement of China’s ties with Latin American

countries is complementary and benefits all parties.

However, public opinion polls in Latin America show that the perception of

Chinese influence is different in each country, suggesting that the idea of

complementarity is not equally perceived throughout the region. In South America,

Chile holds the less negative view of China, while Brazil had the most negative view. In

this paper, I argue that the Chinese assumption of complementarity with Latin America

is invalid for some cases and discuss the reasons of these different perceptions in Chile

and Brazil.

The first research question presented in this thesis is “Why Chile and Brazil hold

different views concerning the influence of China in the region and how trade affects

it?”. Through the analysis of the history of Sino-Chilean and Sino-Brazilian relations, I

argue that, on the one hand, Sino-Chilean relations have always been focused on trade,

therefore, the economic penetration of China in Chile’s economy has been perceived as

complementary to Chilean interests. On the other hand, Sino-Brazilian relations have

been traditionally focused on other strategic areas, such as nuclear and space

cooperation, multilateral diplomacy and others. Even though trade is part of Sino-

Brazilian relations, Brazil is an industrial country and the economic penetration of

China has been perceived as non-complementary by several industrial sectors.

This research aims to suggest a new way of looking at Sino-Latin American

relations. Instead of discussing whether the Chinese presence in Latin America is

positive or negative I propose a focus on its diversity. According to this perspective,

every country in the region owns sectors in which China is seen as a complementary

partner, as well as others that oppose the intensification of relations with China.

Therefore, it cannot be said that China and Latin America as a whole are

complementary or non-complementary partners.

Since the economic penetration of China is differently perceived by important

Chilean and Brazilian interest groups, I analyze the cases of the automotive sectors of

Chile and Brazil regarding the arrival of Chinese vehicles on their markets. This sector

IV

and these two countries have been selected because they show opposite sectoral

perceptions of China in a region considered by the Chinese literature on Latin America

as very complementary.

My second research question, then, is “How this Chinese approach that ignores

regional differences in Latin America affected the Chinese outcomes in the automotive

sectors of Chile and Brazil?”.

To answer this question, I present the historical development of the Chilean and

Brazilian automotive sectors. In Chile, governmental policies gradually weakened

national producers along the last decades, welcoming imports from different countries,

including China. Brazil decided for an opposite strategy in which the automotive sector

was selected as one of the most important pillars of its economy. Nowadays, national

producers represent 20% of Brazil’s industrial GDP and have a strong lobbying power.

In this context, the import of Chinese cars in Brazil was strongly opposed by important

domestic actors.

Even though the automotive sectors of Chile and Brazil had very different

perceptions of imports from China, the Chinese approach was similar for both markets,

trying to export its vehicles in the same way. Due to these different perceptions of

complementarity, Chile recently became the top destination for Chinese cars in Latin

America, while Brazil has approved several protectionist measures to obstruct their

entrance into its large local market.

After presenting the history, I argue that the historical development of the Chilean

and Brazilian automotive sectors followed different ways, making Chile very friendly

and Brazil closed to imports from China, which reflected in their governmental policies

for the sector. In this sense, I believe the arrival of Chinese vehicles in Chile

collaborated to improve the view of China as a complementary partner, and the opposite

in Brazil.

To analyze the perception of complementarity by the automotive sectors of Chile

and Brazil regarding China, I use Robert Putnam’s Logic of Two-Level Games. I

believe this methodology offers a valuable approach for understanding the dynamics

between domestic interest groups and international pressures, especially because it helps

to understand the factors affecting the domestic perceptions of China.

According to this approach, the size of a win-set (the international agreements that

would gain the necessary majority among the relevant domestic audiences) affects

directly the likelihood of international agreements. Applying it to my cases, a larger

V

win-set represents the domestic audiences’ willingness to establish partnerships with

China, reflecting their high perception of complementarity. On the other hand, a smaller

win-set represents the unlikelihood of agreement with China, reflecting a domestic view

of China as a non-complementary partner. A large win-set prevails in Chile, while a

small one prevails in Brazil.

To conclude, I suggest that, instead of focusing in policies for the whole region,

China should explore the diversity of perceptions throughout Latin America. The

Chinese success in the region is directly connected with its capacity to understand each

country’s expectations and perceptions of China and, consequently, focus its efforts in

areas in which both sides perceive each other as complementary partners. Moreover, I

present some recommendations for future cooperation and fields perceived as

complementary by Brazil.

Key words:

automotive industry; complementarity; trade; China; Brazil; Chile

VI

List of abbreviations

ABEIVA Association of Brazilian Automotive Importers

ANAC National Automobile Association of Chile

ANFAVEA Brazilian National Association of Motor Vehicle

Manufacturers

CAAM China Association of Automobile Manufacturers

CAVEM Chilean National Chamber of Automotive Commerce

CBERS China-Brazil Earth Resource Satellite program

CCP Chinese Communist Party

COSBAN China-Brazil Commission of High Level of Agreement and

Cooperation

DIRECON Chile’s General Directorate of International Economic

Affairs

INOVAR-

AUTO

Brazilian Automotive Regime

IPI Industrial-product tax

MOFCOM China’s Ministry of Commerce

VII

List of Charts

Chart 1 – Public Opinion – Perceptions of China – 2012………….. 13

Chart 2 – The Two Level Games…………………………………... 19

Chart 3 – The size of Win-set……………………………………… 20

Chart 4 – Win Set and Complementarity ………………………….. 21

Chart 5 – Most Important Sino-Chilean bilateral agreements –

1970-2014…………………………………………………………..

28

Chart 6 – Evolution of Chinese Participation on the Chilean

Automotive market - 2006-2013…………………………………...

41

Chart 7 – Top Destinations for Chinese Car Exports in 2013……... 42

Chart 8 – Origin of cars sold in Chile in 2013……………………... 42

Chart 9 – Origin of cars sold in Brazil in 2013…………………….. 48

Chart 10 – Evolution on Chinese sales on the Brazilian

Automotive market - 2008-2013…………………………………...

49

Chart 11 – The Case of Chile……………………………………… 55

Chart 12 – The Case of Brazil……………………………………... 59

I

CONTENTS

CHAPTER1 Introduction ............................................................................... 3

1.1 Significance of the study ........................................................................ 3

1.2 Research Questions ................................................................................ 4

1.3 Literature review .................................................................................... 6

1.3.1 The Chinese Diplomacy towards Latin America ......................... 6

1.3.2 Optimistic vs. Pessimistic Views ................................................. 7

CHAPTER2 Theoretical Framework: The Two-Level Games Theory .... 14

CHAPTER3 History and Expectations in Sino-Latin American

Relations .......................................................................................................... 22

3.1 Sino-Chilean Relations ........................................................................ 22

3.2 Sino-Brazilian Relations ...................................................................... 27

3.3 Understanding the Similarities and Differences .................................. 33

CHAPTER4 Case Studies: The Automotive Industries in Chile and

Brazil ................................................................................................................ 36

4.1 The Case of Chile ................................................................................. 37

4.1.1 Historical Overview .................................................................... 37

4.1.2 The arrival of Chinese cars ......................................................... 39

4.2 The Case of Brazil ............................................................................... 43

4.2.1 Historical Overview .................................................................... 43

4.2.2 The arrival of Chinese cars ......................................................... 45

4.3 A Two-Level Games Analysis ............................................................. 50

4.3.1 Chile-China Two-Level Negotiations ........................................ 51

4.3.2 Brazil-China Two-Level Negotiations ....................................... 53

CHAPTER5 Conclusion and Policy Recommendations ............................ 57

II

5.1 Conclusion ........................................................................................... 57

5.2 Policy recommendations ...................................................................... 59

BIBLIOGRAPHY .......................................................................................... 62

ACKNOWLEDGEMENTS ........................................................................... 72

CHAPTER 1 Introduction

3


1.1 Significance of the study

The intensification of Sino-Latin American economic and political relations,

started in the 1990s and strengthened in the 2000s, has created two clear and opposite

views on the literature concerning this new reality: optimistic and pessimistic. For the

optimists, the increased Chinese demand for commodities boosted Latin-American

economies, traditionally specialized in primary industries and, therefore,

complementary to Chinese needs. Moreover, they believe that the imports of cheap

manufactured goods and machines supported the modernization of national industries

and expanded the options for consumers. Politically, the growing Chinese influence in

the region is seen as an alternative to the historical Latin-American dependence on

United States.

The pessimists have an opposite perception and believe that this new reality

affected Latin American countries in a negative way. One important aspect

highlighted by these scholars is the fact that the Chinese demand for commodities

forces these countries to specialize in primary products. For the national

manufacturers, the cheap industrialized goods from China are seen as a threat, since

they can’t compete against Chinese products neither domestically nor internationally.

The result is unemployment and industrial shutdowns.

The Chinese view of Latin America available in English and the governmental

policy papers often present the region (especially South America) as very

complementary to the Chinese interests. Therefore, scholars from China repeatedly

emphasize the optimistic discourse of mutual benefit and common development.

Nevertheless, while some Latin American countries have widely welcomed the

intensification of their relations with China – sharing the view of “complementary

regions” – others presented considerable opposition to this situation. One of the most

important sources of conflict has been the entry of Chinese products into Latin

American domestic markets, creating a huge competition for domestic industries.

This research aims to suggest a new way of looking at Sino-Latin American

relations. Instead of discussing whether the Chinese presence in Latin America is

positive or negative the author proposes a focus on its diversity. According to this

perspective, every country in the region owns sectors in which China is seen as a


4

complementary partner, as well as others that oppose the intensification of relations

with China. Therefore, it cannot be said that China and Latin America as a whole are

complementary or non-complementary partners. In this sense, the cooperation

between China and Latin America should concentrate on the fields perceived as

complementary by both sides.

The main objective of this study is to understand how these differences of

perception affect the outcomes of China’s trade in the region. The author analyzes the

cases of Chile and Brazil – the first holds the less negative view of China among

South American countries recently surveyed; the latter, the most negative view of

China.1 The focus of this dissertation is on the automotive sectors of these two

countries and their different reactions to the arrival of Chinese cars in their domestic

markets. This sector and these two countries have been selected because they show

opposite sectoral perceptions of China in a region considered by the Chinese literature

on Latin America as very complementary.

This research significance lies first in the fact that a large part of the Chinese

literature on Latin America still tends to ignore the differences in the region. Second,

even though the presence of Asian automotive companies in Latin America –

especially Japanese and Korean – is not a recent phenomenon, the Chinese

corporations’ arrival is relatively recent and not widely studied by the academy.

1.2 Research Questions

Two research questions are presented in this research:

1) Why Chile and Brazil hold different views concerning the influence of

China in the region and how trade affects it?

This question is answered in the Chapter 3, when the author analyzes the history

of Sino-Chilean and Sino-Brazilian relations. He argues that Sino-Chilean relations

have always been focused on trade, therefore, the economic penetration of China in

Chile’s economy has been perceived as complementary to Chilean interests. On the

other hand, Sino-Brazilian relations have been traditionally focused on other strategic

areas, such as nuclear and space cooperation, multilateral diplomacy and others. Even

1 This research has been conducted by GlobeScan and its research partners in each country. They interviewed a

total of 24,090 citizens across 22 countries between 2011 and 2012. The research is available in http://www.globescan.com/images/images/pressreleases/bbc2012_country_ratings/2012_bbc_country%20rating%20final%20080512.pdf


5

though trade is part of Sino-Brazilian relations, Brazil is an industrial country and the

economic penetration of China has been perceived as non-complementary by several

industrial sectors.

2) How this Chinese approach that ignores regional differences in Latin

America affected the Chinese outcomes in the automotive sectors of Chile and

Brazil?

This question is answered in the Chapter 4, when the author presents the

historical development of the Chilean and Brazilian automotive sectors. In Chile,

governmental policies gradually weakened national producers along the last decades,

welcoming imports from different countries, including China. Brazil decided for an

opposite strategy in which the automotive sector was selected as one of the most

important pillars of its economy. Nowadays, national producers represent 20% of

Brazil’s industrial GDP and have a strong lobbying power. In this context, the import

of Chinese cars in Brazil was strongly opposed by important domestic actors.



trying to export its vehicles in the same way. Due to these different perceptions of

complementarity, Chile recently became the top destination for Chinese cars in Latin

America, while Brazil has approved several protectionist measures to obstruct their

entrance into its large local market.


and Brazil regarding China, the author uses Robert Putnam’s methodology of the

Logic of Two-Level Games. This theory has been chosen because it offers a valuable

approach for understanding the dynamics between domestic interest groups and

international pressures, especially because it helps to understand the factors affecting

the domestic perceptions of China in Brazil and Chile.

According to this approach, the size of a win-set (the international agreements

that would gain the necessary majority among the relevant domestic audiences)

affects directly the likelihood of international agreements. In our cases, a larger win-

set represents the domestic audiences’ willingness to establish partnerships with

China, reflecting their high perception of complementarity. On the other hand, a

smaller win-set represents the unlikelihood of agreement with China, reflecting a

domestic view of China as a non-complementary partner.


6

The final conclusion presents some suggestions for further development of

China’s relations with Latin America, especially in the case of Brazil. The main

suggestion is that the Chinese success in the region is directly connected with its

capacity to understand each country’s expectations and perceptions of China,

therefore, the Chinese side should focus its efforts in areas in which both sides

perceive each other as complementary partners.

1.3 Literature review

1.3.1 The Chinese Diplomacy towards Latin America

Even though China established diplomatic relations with several Latin American

countries during the 1970s, their relations started booming only in the 1990s. For

several scholars, the main reason for the improvement on the Chinese interest in Latin

America was China’s economic boom in the 1990s and its continuation in the 2000s.

For Dominguez, political relations were improved over the past decades mostly

because international agreements facilitate economic exchanges, “but the exuberance

of the economic boom outpaced the improvement in political relations”1. Jenkins

notes that Sino-Latin American political engagement “has been mainly driven by

[China’s] economic interests”2. For Medeiros these relations are also “primarily (but

not exclusively) driven by economic considerations”3. Hakim and Myers agree with

this perspective, when they say that trade and investment are the most important links

between China and Latin America and “remain the essential foundations of the

relationship”4.

In this context, Latin America, once peripheral to Chinese interest, became more

attractive, since the region offers several opportunities for China to enhance its

economic and political goals. Medeiros stresses that the Chinese interest on the region

is connected to the fact that Latin America can offer China “natural resources,

especially oil and minerals”, markets, “which increasingly purchase Chinese

1 Jorge Dominguez, “China’s Relations with Latin America: Shared Gains, Asymmetric Hopes”, Inter-American

Dialogue, Working Paper, June, 2006, p.1. 2 Rhys Jenkins, “China’s Global Expansion and Latin America”, Journal of Latin American Studies, N.42, Cambridge

University Press, 2010, p. 835. 3 Evan S. Medeiros, China´s International Behavior – Activism, Opportunism and Diversification. Rand, 2009,

p.154 4 Peter Hakim and Margaret Myers, “China and Latin America in 2013”, China Policy Review, January 9, 2014.

Available in http://www.thedialogue.org/page.cfm?pageID=32&pubID=3491. [Accessed on Jan 13th, 2015]


7

consumer goods, cars, and conventional weapons” and “support for China’s effort to

promote multilateralism and to build a multipolar world”1.

If from 1979 to 1991, Latin America received only 10 official visits by Chinese

leaders, there were 40 during the 1992-2006 period, the largest percentage growth

among all the regions (300%)2. China-Latin America dialogue has improved

especially after Jiang Zemin’s tour in the region in 2001, which triggered a wave of

successive trips by politicians and business leaders to discuss political and economic

issues. The Chinese President Hu Jintao visited Latin America in 2004, followed by

the Vice President Zeng Qinghong in 2005. In the period 2008-2009 Hu Jintao and Xi

Jinping repeated the visits. Recently, Xi Jinping went to Latin America for the BRICS

Summit and extended his visit to meet privately some regional leaders. As noted by

Jiang, “in contemporary international relations, no other country has ever sent top

leaders to Latin America in such a high frequency”3.

1.3.2 Optimistic vs. Pessimistic Views

The intensification of these relations reflected on the growth of scholars and

journals dedicated to Sino-Latin American affairs. It is possible to clearly identify two

contrasting views about this topic in the current literature.

The first view stresses the benefits brought by the Chinese economic growth to

Latin America. Since China has become a massive consumer of food, mineral, and

other primary products from the region, commodity-producing countries from South

America such as Brazil, Argentina and Chile could considerably profit in this

environment. In their view the Chinese economy is highly complementary to Latin

America’s. Moreover, they believe that the imports of cheap manufactured goods and

machines supported the modernization of Latin American industries. In a political

perspective, China is seen as a new alternative for Latin-American countries

concerning the historical dependence on United States.

The positive view is often reinforced by the Chinese government and scholars.

China frequently uses the idea of equality, mutual benefit and common development

on its relations with the region, as presented in China's Policy Paper on Latin America

1 Evan S. Medeiros, China´s International Behavior – Activism, Opportunism and Diversification. Rand, 2009, p.

147-148. 2 According to Medeiros, the growth on the other regions in the same period was the following: Europe (294%),

Africa (258%), Asia (186%), North America (71%) and Oceania (- 11%). 3 Jiang Shixue, “Understanding China’s Relations with Latin America”, Chinese Association of Latin American

Studies, April 2009, p.2.


8

and the Caribbean, from 20081. Recently, Xi Jinping assured that “China is ready to

work with Latin American and Caribbean countries hand in hand, supporting one

another and cooperating sincerely on the path to realizing the great dream of

development and prosperity”. He added that the Chinese development will bring

opportunities, not threats2. During a speech given in Mexico, he defended that the

progress of Sino-Latin American relations has proved to be “open, inclusive, mutually

beneficial and cooperative”3.

According to Jiang, China and Latin America have very complementary

economies, therefore, there is no reason for fears from any part. He notes that “as a

large nation, China has abundant resources, but in per capita terms, it lacks all kinds

of raw materials and commodities. (…) Latin America is well-endowed with natural

resources. (…) In other words, cooperation between China and Latin America is

mutually beneficial”4.

In his view, the trade balance is favorable to Latin America, since the Chinese

demand for raw materials pushed up their prices, benefiting Latin American producers,

while the Chinese manufactured goods are considerably cheap5. For him, this situation

improved the poorest people’s access to products they could not afford before6.

Jiang believes that most of South American countries profited from the rise on

commodities prices and demand, however, he notes that Mexico, Central America and

the Caribbean have been suffering from the Chinese competition with their industries7.

However, he argues that China has been significantly investing in Latin America and

could be an important scientific and technological partner to increase the region’s

competitiveness8.

Li agrees with the “complementarity perception” and notes that South American

countries have benefited from Chinese demand for raw materials, “especially the

1 People’s Republic of China, “China's Policy Paper on Latin America and the Caribbean”, Available in

http://www.gov.cn/english/official/2008-11/05/content_1140347.htm. [Accessed on Oct 20th

, 2014]. 2 Xi Jinping, “The Chinese Dream Will Benefit Not Only the People of China, But Also of Other Countries”, In

The governance of China, Foreign Languages Press, 2014, p.62. 3 Xi Jinping, “Forge a Stronger Partnership Between China and Latin America and the Caribbean”, In

The governance of China, Foreign Languages Press, 2014, p.343. 4 Jiang Shixue, “Understanding China’s Relations with Latin America”, Chinese Association of Latin American

Studies, April 2009, p.1-2. 5 Jiang Shixue,” A New Look at the Chinese Relations with Latin America”, Institute of Latin American Studies,

Chinese Academy of Social Sciences, p.10. 6 Jiang Shixue, “Understanding China’s Relations with Latin America”, Chinese Association of Latin American

Studies, April 2009, p.20. 7 Jiang Shixue, “Understanding China’s Relations with Latin America”, Chinese Association of Latin American

Studies, April 2009, p.7. 8 Jiang Shixue, “Recent Development of Sino-Latin American Relations and its Implications”, Revista de Estudios

Internacionales, Univesidad de Chile, Vol. 38, No. 152, Jan-Mar, 2006, p.37.


9

soybeans, iron ore, and copper”. On the other hand, China's exports to those countries,

“especially

high value added products, like automobiles, tractors, motorcycles, televisions,

computers”, make these relations highly complementary1.

He also analyzes the historical asymmetrical relations between Latin America

and United States and observes that “many in the region view the engagement with

China as a welcome opportunity to promote economic growth and diversification –

and to reduce their dependence on the United States”2.

The positive view of China’s influence in Latin America is also highlighted by

some foreign studies. The nature of these relations, as noted by Loser, has affected

positively the trade balance of Argentina, Brazil, Chile and the Andean community,

all important suppliers of raw materials to China3.

For Blázquez-Lidoy, Rodríguez and Santiso, the Chinese development “has most

certainly been favourable to Latin America”4. They argue that in comparison of other

emerging countries from other regions, Chinese competition is not a problem in

general terms, since Latin America’s comparative advantage in raw materials makes it

one of the most complementary regions in the world regarding China.

In Hsiang’s view, China’s rise favors not only commodity exporting countries,

but also offers opportunities for manufacturing exporting nations. In his view, “China

has been an engine for export growth, allowing exporters to diversify away from

traditional markets in the north”5.

Ellis argues that the economic success of China shows Latin American leaders

that they do not necessarily have to follow United States’ models for development.

Although Beijing is not trying to export its own model, the Chinese experience proves

that an alternative way is possible6.

1 Li He, “China’s Growing Influence in Latin America: Challenges and Opportunities”, East Asian Institute,

National University of Singapore. Available in http://www.eai.nus.edu.sg/BB411.pdf. [Accessed on Jan 14th, 2015]. 2 Li He, “China’s Growing Influence in Latin America: Challenges and Opportunities” East Asian Institute, National

University of Singapore, p.2. Available in http://www.eai.nus.edu.sg/BB411.pdf. [Accessed on Jan 14th, 2015]. 3 Claudio M. Loser, “The Growing Economic Presence of China in Latin America”, China-Latin America Task Force,

Center for Hemispheric Policy, University of Miami, 2006. 4 Jorge Blázquez-Lidoy, Javier Rodríguez and Javier Santiso, “Angel or Devil? China’s Trade Impact on Latin

American Emerging Markets” in Javier Santiso, The Visible Hand of China in Latin America. Latin American Economic Outlook, Organisation for Economic Co-operation and Development, 2007, p. 17. 5 Antonio C. Hsiang, “China Rising in Latin America: More Opportunities than Challenges”, Journal of Emerging

Knowledge on Emerging Markets, Volume 1, Issue 1, ICA Institute, November 2009, p.43. 6 R. Evan Ellis, “The United States, Latin America and China: A ‘Triangular Relationship’?”, Inter-American

Dialogue, Working Paper, May 2012, p.6.


10

The second view is pessimistic and highlights the threat represented by China for

the developing countries in the region. For these scholars, Sino-Latin American

relations are considered non-complementary. According to this perspective, the

invasion of manufactured Chinese goods into Latin American domestic markets

produces a huge competition for local industries, resulting in unemployment and

industrial shutdowns. Second, Chinese manufactured exports jeopardize Latin

American export industries, since they cannot compete with Chinese products at

international level. Third, the increasing Chinese demand for commodities forces

Latin American countries to specialize in primary products, which do not provide the

same benefits for the economy as the manufacturing sector. In the political field,

China is perceived as a new dominating power, basically replacing United States’ role.

Although Ellis highlights some positive points on China-Latin American

relations, he also notes that boost on trade with China has negatively affected Latin

America’s development of manufacturing industries, forcing the region to move back

toward a primary product export-oriented model1. Phillips calls this situation a

“movement forward to the past”, especially for South American countries. On the

other hand, Mexico and Central America are seen as the biggest losers concerning the

“China factor”, facing strong competition in other markets, particularly in

manufacturing2.

Jenkins, Peters and Moreira agree with this perspective and believe that this

scenario reproduces the “core-periphery pattern” of exchanging of manufactures for

primary products. For them, this is a tricky situation for commodity exporters, since a

slowdown in China’s economy, followed by a rise in Chinese manufactured imports

could be dangerous for the region3.

Ferchen’s contribution follows the same line when he says that Latin America’s

position as a commodity supplier to China will not last forever. In his opinion, the

positive expectations from Latin America are “more reflective of a gold rush

mentality than sober reflection”4. The uncertainties about the future situation of China

are also discussed by Devlin, Estevadeordal and Rodríguez-Clare. In their view,

1 R. Evan Ellis, “China in Latin America: The Whats and Wherefores”, Boulder: Lynne Rienner, 2009, p.3

2 Nicola Phillips, “Consequences of an Emerging China: Is Development Space Disappearing for Latin America

and the Caribbean?”, Working Paper No.14, The Centre for International Governance InnovationJanuary, 2007, p.18. 3 Rhys Jenkins, Enrique Dussel Peters and Mauricio Mesquita Moreira, “The Impact of China on Latin America

and the Caribbean”, World Development, Vol. 36, No. 2, 2008, pp. 235–253. 4 Matt Ferchen, “China–Latin America Relations: Long-term Boon or Short-term Boom?”, The Chinese Journal of

International Politics, Vol. 4, 2011, p.84.


11

“China today may not be China of tomorrow”, therefore, Latin American leaders

should act according to the predictions of China’s evolution1.

Moreira analyzes the Chinese effect on manufacturers in Latin America and says

that the future is not very bright for the region, especially because of imports.

However, he believes that it is not caused only by China, but by the regional inability

to enhance productivity and differentiate its products2.

As we can observe, there is a recent literature with diverse views discussing the

effects of the intensification of Sino-Latin American relations. Nevertheless, to what

extent these optimistic and pessimistic views reflect the perceptions of Latin-

American citizens regarding China?

In a survey conducted by GlobeScan/PIPA in 2012, citizens from all over the

world were asked whether the world influence of 16 countries was “mostly positive”

or “mostly negative”3. The research included South American nationals from Brazil,

Chile and Peru. Regarding their view towards China, all these commodity exporters

held similar positive views of China, confirming the optimistic view that these

countries see China as a complementary partner (see chart 1).

Concerning the respondents who believe the Chinese influence is “mostly

negative”, Chile, had the lowest rate, followed by Peru. However, Brazil had a much

higher rate of citizens who see the influence of China in a negative way. In this case,

we can say that the pessimistic view, in which China is perceived as a non-

complementary partner, is much stronger in Brazil.

These results show that the views of China do not follow the same pattern all

over Latin America. Even though Chile and Brazil, for example, export tons of raw

materials to China every year, their perception of the Chinese influence is very

different.

In this context, I believe that an alternative approach could be more useful to

understand these relations. Instead of discussing whether the Chinese presence in

Latin America is positive or negative I propose a focus on its diversity. According to

this view, every country in the region owns sectors in which China is seen as a

1 Robert Devlin, Antoni Estevadeordal and Andrés Rodríguez-Clare, “The Emergence of China: Opportunities and

Challenges for Latin America and the Caribbean”, Inter-American Development Bank, Washington, 2006, p.27. 2 Mauricio Mesquita Moreira, “Fear of China: Is there a future for manufacturing in Latin America?”, Latin

America/Caribbean and Asia/Pacific Economics and Business Association, Presented at the 2004 Laeba Annual Conference, Beijing, People’s Republic Of China, December 3-4, 2004. 3 This research is available in

http://www.globescan.com/images/images/pressreleases/bbc2012_country_ratings/2012_bbc_country%20rating%20final%20080512.pdf


12

complementary partner, as well as others that oppose the intensification of relations

with China. Therefore, we cannot say that China and Latin America as a whole are

complementary (the optimistic view) or non-complementary (the pessimistic view).

These ideas follow the same line of scholars like González, who disagrees with

the perspective that all South American commodity exporters are completely

complementary to Chinese interests. His approach suggests that we should not

analyze these perceptions through a country-by-country basis, but focus on each

economic sector. This view contributes to understand better why criticisms and

protectionist measures against Chinese competition on manufactured goods have

happened in commodity exporting countries, for example1.

Chart 1: Public Opinion – Perceptions of China - 2012

Source: GlobeScan/PIPA - 2012

To understand better these results, I believe it is necessary to take a look at the

history of bilateral relations between China and Chile (the country with the most

positive view of China among those surveyed) and China and Brazil (the country with

the less positive view of China among those surveyed). After that, I discuss how these

1 Francisco E. González, “Latin America in the Economic Equation – Winners and Losers: What Can

Losers Do?”, In China's Expansion into the Western Hemisphere: Implications for Latin America and the United States, Edited by by Riordan Roett and Guadalupe Paz, Brookings Institution Press, 2008, p.155.


13

different views of China affected Chinese car exports to these two South American

countries.

But first, I present the theoretical framework in which I analyze the Sino-Chilean

relations and Sino-Brazilian relations and the methodology used to understand the

domestic perceptions of China by the automotive sectors in Chile and Brazil.

CHAPTER 2 Theoretical Framework: The Two-Level Games Theory

14

CHAPTER 2 Theoretical Framework: The Two-Level

Games Theory


and Brazil regarding China, I use the methodology of Robert Putnam’s Logic of Two-

Level Games. I believe this theory offers a valuable approach for understanding the

dynamics between domestic interest groups and international pressures, especially

because it helps to understand the factors affecting the domestic perceptions of China.

Moreover, even though the concept of complementarity is widely discussed by

the Chinese literature, there is no such “Theory of Complementarity” in China. In this

sense, Putnam’s concepts are useful to translate these ideas into theory. In this chapter,

I establish a connection between the size of win-set (a Putnam’s concept) and the

perception of complementarity (from the Chinese approach).

The basic idea is that a larger win-set with China (all the international

agreements that would be accepted by the relevant domestic audiences) represents

their willingness to establish partnerships with China, reflecting their high perception

of complementarity. On the other hand, a smaller win-set represents the unlikelihood

of agreement with China, reflecting a domestic view of China as a non-

complementary partner.

I believe this approach is useful to understand the opposite outcomes observed in

Chile and Brazil concerning the imports of Chinese cars into their markets. In Chile,

the government managed to include the automotive sector on the list of the FTA

signed with China; in Brazil, the government adopted protectionist measures against

Chinese cars.

I highlight that different approaches could be used for analyzing these cases. This

is, according to my perception, the most practical and useful to explain the differences

and perceptions in Chile and Brazil concerning the Chinese auto companies.

Putnam’s main puzzle is: when and how domestic politics determine

international relations, or the reverse. The Two-Level Games, according to the scholar,

is an alternative approach to theories that focus only on domestic causes and

international effects – Second Image – or international causes and domestic effects –

Second Image Reversed. For him, both sides are often entangled, but theories usually

fail to separate and understand how they affect each other.


15

The basic idea of Two-Level Games is that “at national level, domestic groups

pursue their interests by pressuring the government to adopt favorable policies, and

politicians seek power by constructing coalitions among those groups. At the

international level, national governments seek to maximize their own ability to satisfy

domestic pressures, while minimizing the adverse consequences of foreign

developments”1.

The international negotiations work as if the negotiators sat in two different

game boards: the international (Level 1), where they discuss directly with the other

side; and the domestic (Level 2), where they try to understand several national

demands from different groups, in order to ratify what has been agreed on the

previous table (see chart 2).

According to Putnam, these games are extremely complex because “moves that

are rational for a player at one board (such as raising energy prices, conceding

territory, or limiting auto imports) may be impolitic for that same player at the other

board”2. In other words, pleasing domestic audiences can be costly internationally,

and vice versa.

Putnam assumes that each side has a leader or chief negotiator without individual

policy preferences. However, he/she will do his/her best to reach the most profitable

agreement for his/her constituents (domestic audiences). These audiences at the Level

2 can be interest groups, bureaucratic agencies, social classes or public opinion.

It is important to clarify Putnam’s most important concept: the win-sets. This

term consists of “a given Level 2 [domestic] constituency as the set of all possible

Level 1 [international] agreements that would ‘win’ – that is, gain the necessary

majority among the constituents”. When the win-sets from both sides overlap, there is

a high probability to reach an agreement at Level 1 negotiations.

On these games, larger win sets tend to make Level 1 agreements more likely,

since both parties are not very strict on their demands. However, a lot of factors

impact the size of Level 2 win-sets (see chart 3).

First, “the size of the win-set depends on the distribution of power, preferences

and possible coalitions among Level 2 constituents”3. In this sense, one important

1 Robert Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games”, International Organization,

Vol.42, No.3, Summer,1988, pp. 427-460. 2 Robert Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games”, International Organization,

Vol.42, No.3, Summer,1988, p.434. 3 Robert Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games”, International Organization,

Vol.42, No.3, Summer,1988, p.442.


16

issue to analyze is the relative size of the isolationist and internationalist forces.

According to Putnam, “support for international agreements is probably greater in

smaller, more dependent countries with more open economies, as compared to more

self-sufficient countries […], for most of whose citizens the costs of no-agreements

are generally lower”. Where the isolationist forces prevail, the win-set tends to be

smaller; where internationalist forces prevail, the opposite is expected.

Second, the group with the greatest interest in a specific issue is likely to hold the

most extreme position on that issue. This group tends to exert stronger pressure and

influence most the process of negotiation at Level 1, either increasing or decreasing

win-set’s size. For Putnam, the politicization of the issue also affects the win-set size,

since it activates groups less worried about the costs of no-agreement, reducing the

win-set.

Third, the smaller the costs of no-agreement to constituents, the smaller the win

set. When the maintenance of the status quo is not perceived as costly by the Level 2

constituents, the win-set tends to be smaller. In the opposite case, when the majority

of domestic constituents perceive they can considerably profit from an agreement,

they tend to support it and be relatively flexible to the other side’s demands.

Fourth, the greater the autonomy of central decision-makers from their Level 2

constituents, the larger their win-set and thus the greater the likelihood of achieving

international agreement. Similarly, when domestic interest groups exert considerable

pressure on the government, smaller its ability to act independently and reach

agreement.

Fifth, the larger a negotiator’s win-set, the more easily he can conclude an

agreement, but also the weaker his bargaining position vis-à-vis the other negotiator.

This situation happens because when a negotiator realizes his counterpart is very

eager to reach an agreement, he feels more confident to bargain harder and profit

more on this negotiation.

Putnam presents several examples of situations in which the Two-Level games

are applicable, however, he focuses his analysis on the Bonn summit conference of

1978. After the first oil crisis, the U.S., Germany and Japan met to discuss a

coordinated program to fight this “shock”. Nevertheless, the perceptions regarding the

crisis’ causes were different in each country: majorities in Germany and Japan blamed

American energy and monetary policies and U.S. accused Germany and Japan for

their tight-fisted policies. In the end, all parties agreed to make some concessions and


17

successfully approved their coordinated policies. For Putnam, whether the deal was

wise is not the key point, but how it became possible politically, despite domestic

opposition in these countries.

Besides the Bonn summit conference of 1978, the Two-Level Games approach

has been used to understand a varied range of issues such as the US foreign policy1,

Israel-Palestine conflict2, Serbian and Russian reactions to their separatist provinces

3,

the Brazilian debt crisis of 19884, agricultural trade negotiations on the Uruguay

Round5, the US-China copyrights dispute

6, the causes for ASEAN economic

integration7 and several other cases. Some scholars like Raymond, however, believe

that Putnam's approach is most relevant in negotiations regarding economic issues

such as trade and investment8.

After presenting the basic assumptions of the Two-Level Games, I believe it is

important to establish a key connection between this theory and the Chinese literature

on Latin America. My main idea is that the size of the win-set is directly connected to

the domestic perception of complementarity. In the cases when the Chinese view of

complementarity is shared by the majority of domestic constituents in a specific sector

in a specific Latin American country, the win-set is larger and agreements are more

likely to happen. When China is seen more as a threat than a complementary partner,

the win-set is smaller, affecting negatively the likelihood of agreement.

Putnam’s methodology can be useful for China to understand in which cases,

sectors or countries the win-sets for partnerships with China are larger, and

consequently the perception of complementarity and the likelihood of agreement. It is

important to notice that when China invests in fields considered non-complementary

by Latin American countries’ audiences, it affects negatively its image among these

publics (see chart 4). Quoting Putnam, “cognitive balance theory suggests that

1 See Mark Boyer, “Issue definition and two-level negotiations: An application to the American foreign policy

process”, Diplomacy & Statecraft. 11. 2, 2000: 185-212. 2 See Jacob Shamir and Kamil Shikaki, “Public Opinion in the Israeli-Palestinian Two-Level Game”, Political

Research Quarterly, 2006. 3 See Ann Conner Wilson, “Putnam's Two-Level Game: Case Studies of Serbian and Russian Reactions to the

Kosovar and Chechen Independence Movements”, Master Thesis, The Ohio State University, 2010. 4 See Howard P. Lehman and Jennifer McCoy, “The Dynamics of the Two-Level Bargaining Game: The 1988

Brazilian Debt Negotiations”, World Politics – 444, 1992: 601-644. 5 See Byung-Hwa Chung, “A Two-Level Games Analysis of the Agricultural Trade Negotiations Between the United

States and the European Community in the Uruguay Round”, Master Thesis, University of Massachusetts, 1994. 6 See Krishna P. Jayakar, “The United States-China copyright dispute: A two-level games analysis”,

Communication Law and Policy, Volume 2, Issue 4, 1997. 7 See Yi-hung Chiou, “A Two-level-games Analysis of AFTA Agreements: What Caused ASEAN States to Move

towards Economic Integration?”, Journal of Current Southeast Asian Affairs, 29, 1, 2010: 5-49. 8 See Gregory A. Raymond, “Review: Upstairs, Downstairs: Negotiating in Two-Level Games”, Mershon

International Studies Review, Vol. 38, No. 2 (Oct., 1994), pp. 346-348.


18

international pressure is more likely to reverberate negatively if its source is generally

viewed by domestic audiences as an adversary rather than an ally”1.

As I present in the fourth chapter, the historical development of the automotive

fields in Chile and Brazil led to different perceptions of complementarity and win-sets

for negotiations with China in each country.

But first, in the next chapter, I introduce the history of bilateral relations between

China and Chile, as well as China and Brazil, to then analyze the automotive fields of

these two countries.

1 Robert Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games”, International Organization,

Vol.42, No.3, Summer,1988, p. 456.


19


20


21

CHAPTER 3 History and Expectations in Sino-Latin American Relations

22

CHAPTER 3 History and Expectations in Sino-Latin

American Relations

In the previous chapter, I presented data showing that although the Chinese

Literature on Latin America argues that both regions are highly complementary, Chile

and Brazil perceive the Chinese influence in a very different way.

In this chapter, I start discussing one of my main research questions: Why Chile

and Brazil hold different views concerning the influence of China in the region?

To answer this question, I focus on the analysis of the history of Sino-Chilean

and Sino-Brazilian relations. I argue that Sino-Chilean relations have always been

focused on trade, therefore, the economic penetration of China in Chile’s economy

has been perceived as complementary to Chilean interests. On the other hand, Sino-

Brazilian relations have been traditionally focused on other strategic areas, such as

nuclear and space cooperation, multilateral diplomacy and others. Even though trade

is part of Sino-Brazilian relations, Brazil is an industrial country and the economic

penetration of China has been perceived as non-complementary by several industrial

sectors, affecting negatively the image of China.

3.1 Sino-Chilean Relations

The diplomatic connections between China and Chile date from the 19th century,

when Chile established honorary consulates in Guangzhou and Hong Kong. Thus,

from 1844 the political representation of Chile in Chinese territory fostered the

exchange of copper and wheat from Chile as well as silk and spices from China1.

In the following century, in 1952, even before Chile recognized People’s

Republic of China, both sides signed a trade pact, as noted by Jiang. The author

highlights that this was the first Sino-Latin American economic agreement after the

Chinese Revolution2. In 1961 China established in Chile the Commercial News Office

1 Fernando Schmidt. Presentación libro UDD "Chile y China: Cuarenta Años de Relaciones Diplomáticas

Ininterrumpidas y Fructíferas. [Presentation of the book “Chile and China: Forty Years of Uninterrupted and Fruitful Diplomatic Relations]. Chile´s Ministry of Foreign Affairs, Oct 19th, 2011. Available in http://www.minrel.gob.cl/minrel/site/artic/20111020/pags/20111020213922.html. [Accessed on Dec. 12th, 2014]. 2 Jiang Shixue,” A New Look at the Chinese Relations with Latin America”, Institute of Latin American Studies,

Chinese Academy of Social Sciences, p.8.


23

of Chinese Import and Export Corporations – renamed Commercial Office of China

Council for the Promotion of International Trade, in 19651.

Even though since its beginning this bilateral relation had a strong economic

nature – with no special attention on political affairs – the election of a leftist

president in 1970 represented a temporary shift. During Salvador Allende’s

government, Chile became the second country in the western hemisphere to recognize

the People’s Republic of China, only after the communist Cuba. In fact, it was

Allende’s first decision as a president concerning Chile´s foreign affairs, as noted by

the former Chilean ambassador in China, Octavio Errázuriz Guilisasti2. Therefore, for

less than three years, there was a considerable political-ideological identification

between these two countries.

However, since Allende’s overthrow in 1973, the Sino-Chilean relations have

been mostly pragmatic, with no ideological content. This is a pattern observed not

only in Chile, but all over Latin America, as Dominguez explains. For this author,

“ideological or regimist factors do not explain trends in Sino-Latin American

relations”3.

The following authoritarian right-wing government of Augusto Pinochet cooled

Sino-Chilean relations, but never broke them. Actually China and Romania were the

two Communist countries which didn’t cut ties with Pinochet’s regime. Nevertheless,

an increasing international isolation from the western world due to its military rule

forced Chile to reorient its foreign policy. During the mid-70s, they initiated a process

to diversify and improve relations with countries in the Asia-Pacific region –

including China – as an “escape route”4. According to Jiang, the reforms and new

policies adopted by China during the 1980s contributed for the bilateral exchanges

between two countries5.

1 China Radio International, “China-Chile Relations”. Available in

http://english.cri.cn/3126/2006/09/01/[email protected]. [Accessed on Dec 12th, 2014]. 2 Octavio Errázuriz Guilisasti, “Las relaciones de Chile y China: del simbolismo a la acción” [Chile-China Relations:

from Symbolism to Action], University of Chile, Revista de Estudios Internacionales, Año 39, No. 154, Jul-Sep 2006, p. 170. 3 Jorge Dominguez, “China’s Relations with Latin America: Shared Gains, Asymmetric Hopes”, Inter-American

Dialogue, Working Paper, June, 2006, p.4. 4 Jörg Faust, “Latin America, Chile and East Asia: Policy-Networks and Successful Diversification”, Journal of Latin

American Studies, Vol. 36, No. 4 (Nov., 2004), p. 748. 5 Jiang Shixue, “Recent Development of Sino-Latin American Relations and its Implications”, Revista de Estudios

Internacionales, Universidad de Chile, Vol. 38, No. 152, Jan-Mar, 2006, p.33.


24

In fact, Chile was the first country in Latin America to establish a joint venture

with China, in 1982 (Beijing Copper Company)1. In the mid-1980s East Asia was

already Chile's most important trading region2.

During Pinochet’s government, sectors of the Chilean economy who had

invested in import-substitution strategies were weakened (e.g. automotive), while

export-oriented sectors were strengthened (e.g. mining, wine and fruit production).

These liberal economic policies during the 1970s and 1980s would affect the relations

with China in a very strong way after Chile’s re-democratization, in 1990. The result

would be a very friendly and open nation concerning trade with China, since

protectionist forces were just a minority.

For Faust, even though periods of political changes (as re-democratization)

involve the rearrangement of political coalitions and struggles between different

domestic groups, the consensus among elites in favour of the liberal export-driven

development model in Chile has been relatively stable3.

In this context, the 1990s represented an intensification of bilateral relations

between both countries. As noted by Guilisasti, there was a “qualitative and

quantitative shift, which reflected on the increased number of high level visits,

negotiation of important bilateral agreements, a strong growth on trade and

cooperation in the Pacific region”4. However, according to the same author, this

bilateral relation has been always highly focused on economic affairs.

In 1999 Chile and China concluded bilateral negotiations as a “prelude to

China’s bid to join WTO”, as noted by Domínguez5. Chile was the first Latin

American nation to recognize China as a market economy in 2004 and, in the same

year, they set up a Comprehensive Partnership.

Conversations about a Free Trade Agreement initiated in 2002. To discuss the

issue at national level, the Chilean government organized several meetings between

politicians, business associations, union labors and NGOs. Fiedler highlights the high

1 Chile´s Embassy in China, “Bilateral Relations”. Available in http://chileabroad.gov.cl/china/en/relacion-

bilateral/comercio-relaciones-bilaterales/. [Accessed on Dec. 29th, 2014]. 2 Jörg Faust, “Latin America, Chile and East Asia: Policy-Networks and Successful Diversification”, Journal of Latin

American Studies, Vol. 36, No. 4 (Nov., 2004), p. 755. 3 Jörg Faust, “Latin America, Chile and East Asia: Policy-Networks and Successful Diversification”, Journal of Latin

American Studies, Vol. 36, No. 4 (Nov., 2004), p. 745. 4 Octavio Errcizuriz Guilisasti, “Las relaciones de Chile y China: del simbolismo a la acción” [Chile-China Relations:

from Symbolism to Action], University of Chile, Revista de Estudios Internacionales, Año 39, No. 154, Jul-Sep 2006, p. 172. 5 Jorge Dominguez, “China’s Relations with Latin America: Shared Gains, Asymmetric Hopes”, Inter-American

Dialogue, Working Paper, June, 2006, p.36.


25

participative nature of this process among the different societal constituents1. As

noted above, Chile’s liberal policies since the 1970s weakened domestic

manufacturers, making protectionist forces very limited to oppose the accord.

Regarding the remaining protectionist forces, Wehner says that “the Chilean

government successfully countered the aversion to FTAs of those domestic groups

that previously enjoyed protection; it has reduced the size of the opposition to FTAs

to facilitate the domestic ratification of these accords; and it has also undertaken the

conversion of some protective-oriented groups into supporters of FTAs”2.

The Free Trade Agreement was finally signed in 2005 and entered into force in

2006, being probably the most remarkable event of this bilateral relation.

The treaty facilitated Chile’s access to Chinese markets for fruits, cellulose,

seafood and its most important commodity, copper, considerably important for

Chinese industries. At the same time, Chinese manufactured goods arrived in Chile in

very competitive prices. Few strategic sectors were excluded from the FTA list,

including textiles, for example. For other sectors not very friendly to this agreement,

the government offered compensation packages and programs to make them more

competitive3.

The increased importance of China on Chile’s economy is noted by Ellis, who

says that “Chilean presidents Ricardo Lagos and Michelle Bachelet (…) made Sino-

Chilean trade relations the cornerstone of Chile’s economic policy”4. In 2011, Xi

Jinping also pointed out that “China and Chile should first and foremost expand

bilateral trade”5.

From 2005 to 2013, Sino-Chilean trade has increased almost fivefold from US$ 7

billion to US$ 34 billion and China is currently Chile’s leading trading partner.

Copper represented impressively 80% of Chile’s exports to China in 2012. On the

other hand, the Chilean imports from China were very diverse. The top 3 imported

products were mobile phones (9,2%), computers (4,7%) and cars (1,4%)6.

1 Sebastián Gómez Fiedler, “Tratado de Libre Comercio Entre Chile y China: Análisis del

Acuerdo Suplementario Sobre el Comercio de Servicios en el Marco de la OMC” [Free Trade Agreement between Chile and China: Analysis of the Suplementary Agreement over Trade in Services on OMC’s Framework], Universidad de Chile, p.73. 2 Leslie Wehner, “Chile’s Rush to Free Trade Agreements”, Revista de Ciencia Política, v.31, nº 2, 2011, p. 218.

3 Leslie Wehner, “Chile’s Rush to Free Trade Agreements”, Revista de Ciencia Política, v.31, nº 2, 2011, p. 218.

4 R. Evan Ellis, “Chinese Soft Power in Latin America - A Case Study”, Joint Force Quarterly, issue 60, 1st quarter

2011, National Defense University Press, p.87. 5 People’s Daily, “Chinese vice president unveils plan to promote China-Chile economic ties”. Available in

http://en.people.cn/90001/90776/90883/7406894.html. [Accessed on Mar 8th, 2015]. 6 Chile´s Ministry of Foreign Relations, “Evaluación de las relaciones comerciales entre Chile y China a siete años

de la entrada en vigencia del tratado de libre comercio” [Evaluation of commercial relations between Chile and


26

Given the relevance of this FTA for both sides, one of the most important

bilateral diplomatic channels between both countries is the Free Trade Commission of

China-Chile FTA, comprising representatives of China’s Ministry of Commerce

(MOFCOM) and Chile’s General Directorate of International Economic Affairs

(DIRECON).

In 2012, Chile and China upgraded their relations to Strategic Partnership,

following the Chinese classification. When they announced this agreement, the

Chilean President Sebastian Piñera said that “since the establishment of diplomatic

relations, both countries have seen fruitful cooperation, which has strongly promoted

Chile's economic advancement”1. Next year, Piñera met Xi Jinping and reinforced

that Chile was ready to “strengthen strategic partnership with China”. His Chinese

counterpart expressed that “in terms of relations with China, Chile is always at the

forefront of Latin American countries”2.

For Jiang, the economic nature of Sino-Chilean relations in a global age follows

a common understanding of globalization. According to the Chinese scholar, “in its

strict sense, globalization simply means the smooth flow of goods, capital,

information, etc.”. He summarizes the mutual perception of complementarity between

Chile and China when highlights the fact that “on one hand, Chile is rich in natural

resources, and China needs them to maintain its high rate of economic growth. On the

other, Chile should not overlook the huge size of the Chinese market when

implementing its strategy of ‘looking towards the East’”3.

Domínguez adds that Chile traditionally behaves as a “trading state” in its

relation with China. He notes that if we compare China’s relations with other

important South American countries, Chile has the “least politicized” relation4.

The strong economic nature of Sino-Chilean relations reflects on the nature of

the most important agreements signed by both parties since the establishment of their

diplomatic relations. According to embassy of Chile in China, among 31 important

China seven years after TLC went into effect]. Available in http://www.direcon.gob.cl/2013/09/8372/. [Accessed on Dec 15th, 2014]. 1 People´s Daily, “China, Chile to establish strategic partnership, boost trade”, June 27, 2012. Available in

http://news.xinhuanet.com/english/china/2012-06/27/c_123334167.htm. [Accessed on Dec 29th, 2014]. 2 People’s Republic of China, “President Xi Jinping Meets with President Sebastian Pinera of Chile”, October 7,

2013. Available in http://www.fmprc.gov.cn/mfa_eng/topics_665678/xjpfwynmlxycx21apec_665682/t1085513.shtml. [Accessed on Jan 19th, 2014]. 3 Jiang Shixue, “Recent Development of Sino-Latin American Relations and its Implications”, Revista de Estudios

Internacionales, Universidad de Chile, Vol. 38, No. 152, Jan-Mar, 2006, p.34. 4 Jorge Dominguez, “China’s Relations with Latin America: Shared Gains, Asymmetric Hopes”, Inter-American



27

agreements signed since 1970, thirteen (41%) concern commercial and trade issues

(see chart 5).

The importance of Sino-Chilean relations by both sides is shown on the number

of presidential visits to Beijing and Santiago since 1990. By the Chinese side, Yang

Shangkun (1990), Jiang Zemin (1993 and 1997), Hu Jintao (2004 and 2010) and Xi

Jinping (2011, at that time as vice-president) have visited Chile. Xi has also met the

Chilean president in Brazil in 2014, during the BRICS meeting. On the Chilean side,

Patricio Aylwin (1992), Eduardo Frei (1995), Ricardo Lagos (2001), Sebastian Piñera

(2010) and Michelle Bachelet (2008 and 2014) went to Beijing on official travels.

Source: Embassy of Chile in China – Agreements and Treaties 1

3.2 Sino-Brazilian Relations

Until the last decades of the 19th century, the diplomatic relations between Brazil

and Asian nations were almost inexistent. The first official agreement between China

and Brazil, for example, occurred in 1880, when they signed a Friendship, Trade and

Navigation Treaty, in Tianjin. For Brazil, it was a necessary initial step to develop

close relations with China – at that time still ruled by the Qing Dynasty. In that period,

the Brazilian government was offering incentives to increase the number of migrant

1 Scientific Agreements include Health, Fishing, Agriculture and Livestock, Tourism, Space Cooperation and

Forestry Cooperation. Available in http://chileabroad.gov.cl/china/en/relacion-bilateral/acuerdos-y-tratados-bilaterales/. [Acessed on Dec 11

th, 2014].


28

workers in Brazil, and saw China as a potential partner. The main goal was to attract

foreigners to work on the coffee plantations after the imminent end of slavery in

Brazil – and the consequent manpower shortage. Despite the initial agreement, the

Chinese government refused the migration proposal, fearing that its citizens would be

working under the same conditions of slavery. Other governments, however, did not

oppose the Brazilian idea. As a result, a large number of foreigners, mostly Italians,

Germans, Portuguese, Japanese and others arrived in Brazil in the end of the 19th

century1.

Brazil maintained a consulate in Shanghai from 1883 to 1949, but after the

Chinese Revolution, they broke diplomatic relations with China. Oliveira notes that

from 1950s to 1970s, Brazil-Asian relations were not very intense. The most

significant interactions were restricted to the multilateral diplomacy with countries in

development, looking for coordination on international affairs and fostering a new

economic order through the South-South cooperation perspective2.

The testimony of Santos – nowadays president of the Sino-Brazilian Friendship

Association – describing his conversation held with Zhou Enlai in Beijing, in 1966,

exemplifies the cold Sino-Brazilian relations in the middle of the 20th century. “We

talked for some moments and I asked to the then Prime Minister how were the

relations with Brazil. The Chinese leader, calmly, answered me: ‘Talk tomorrow with

our Foreign Minister, Chen Yi”3.

The Chinese official, however, assured the Brazilian that, someday, the

commercial ties between Brazil and China would be very strong. Even though during

those decades their relations were modest, China and Brazil agreed in most of

multilateral issues and tended to follow the same pattern for voting in international

forums.

China and Brazil restored official diplomatic relations only in 1974, after China’s

admission in the United Nations. For Chen Duqing, former Chinese ambassador in

Brazil, Sino-Brazilian relations can be divided into four different stages4:

1 Henrique Altemani de Oliveira, “Brasil-China: trinta anos de uma parceria estratégica”. [Brazil-China: thirty

years of a strategic partnership]. Revista Brasileira de Política Internacional, vol.47, no.1, Brasília, Jan/Jun, 2004, p.10. 2 Henrique Altemani de Oliveira, “Brasil-China: trinta anos de uma parceria estratégica”. [Brazil-China: thirty

years of a strategic partnership]. Revista Brasileira de Política Internacional, vol.47, no.1, Brasília, Jan/Jun, 2004, p.11. 3 Danillo Santos, “Um caso de amor à primeira vista” [A case of love at first sight], China Radio International

Fanzine, Ed. 48, No 4, 2014, p.17. 4 China Radio International Fanzine, “Testemunhei o processo do estabelecimento das relações diplomáticas

China-Brasil” [I witnessed the establishment of China-Brazil diplomatic relations], Ed. 48, No 4, 2014, p.16.


29

1) 1974-1985 – Mutual learning about each other

2) 1985-1993 – Consolidation

3) 1993 -2003 – Stabilization

4) 2003-Nowadays – Boost

During the first stage of mutual learning, although China and Brazil signed a

trade treaty in 1978, bilateral relations were not very intense. In fact, Brazil´s import

substitution strategies since the 1950s and the National Plans of Development (1972

and 1975) were highly protectionist, discouraging global trade. China, on the other

hand, was similarly very closed in economic matters. The most remarkable point of

the Sino-Brazilian relations in this period occurred in 1984, when they discussed

cooperation in nuclear energy.

The second stage of consolidation was marked by the beginning of the China-

Brazil Earth Resource Satellite program (CBERS), launched in 1988 to promote space

cooperation. The re-democratization of Brazil in the end of 1980s, similarly to the

Chilean case, resulted in the intensification of relations with China. In the 1990s

Brazil opened its economy and, since then, both countries intensified their commercial

ties. However, according to Oliveira the importance of political relations has been

maintained1.

Brazil was the first country in the world to establish a Strategic Partnership with

China, in 1993. This moment marks the beginning of the “stabilization” period on

Sino-Brazilian relations, as noted by Chen Duqing. Since “Strategic Partnership” was

a new nomenclature for Brazilians, its real meaning was unclear for them. When

asked by a Brazilian newspaper about its significance, Li Ruihuan, a former member

of China’s Standing Committee of the Political Bureau, tried to clarify it. He used the

idea of complementarity as the key point concerning this bilateral relation.

“Latin America is one of the most dynamic regions in the world when we refer to

economic development. On the political field, this region, especially Brazil, has an

important strategic position in the world. Brazil is Latin America´s largest country in

development and China is the world’s largest country in development. There are

several common goals between both countries: both are looking for economic

development and the improvement of its people’s life standards. Therefore, this

cooperation has a very relevant meaning for these two countries, since there aren’t

1 Henrique Altemani de Oliveira, “Brasil-China: trinta anos de uma parceria estratégica”. [Brazil-China: thirty

years of a strategic partnership]. Revista Brasileira de Política Internacional, vol.47 no.1 Brasília, Jan./June 2004, p.17.


30

conflicts of interest concerning fundamental issues. There are, in fact, two

complementary nations”1.

However, for all over the 1990s, the bilateral relations were not as effective as

expected. Feng and Huang noted that “building strategic partnership mechanisms can

take time” and this one “was launched in a rush and remained dormant for over a

decade”2.

The few examples of political coordination between Brazil and China in the

1990s were shown in 1995, when Brazil supported the admission of China in WTO

and in 1999, when they launched their first China-Brazil Earth-Resources Satellite

(CBERS-1). The end of the dormancy – using the term used by Feng and Huang –

happened only in the next decade.

This “awakening” or “boost” period occurred especially after 2003, when the

Chinese economic growth demanded more of Brazil's natural resources. In 2004,

Brazil recognized China as a market economy and bilateral trade improved along the

years. From 2001 to 2013, Sino-Brazilian trade rose from US$ 3 billion to US$ 83

billion3. Since 2009 China is Brazil's leading trading partner and Brazil is currently

ranked on 9th among China’s trading partners4. Moreover, Brazil is China’s leading

trade partner in Latin America and among the BRICS countries.

Iron ore and soy beans represented 72% of Brazil’s exports to China in 2013,

while manufactured products and mechanical appliances were the majority of Chinese

exports to Brazil, accounting for 50% of total. The Brazilian ambassador in China,

Valdemar Carneiro Leão has noted that despite of several achievements, the trade

development is the most remarkable fact in 40 years of bilateral relation5.

The establishment of an institutional diplomatic channel between both sides is

another remarkable event of this relationship. In 2004 they created the China-Brazil

Commission of High Level of Agreement and Cooperation (COSBAN), the most 1 Jaime Spitzcovsky, “Dirigente chinês quer aproximação com Brasil”, [Chinese leader wants aproximation with

Brazil], Folha de São Paulo, June 17, 1995. Available in http://www1.folha.uol.com.br/fsp/1995/6/17/brasil/19.html. [Accessed on Dec. 29th, 2014]. 2 Feng Zhongping and Huang Jing, “China’s Strategic Partnership Diplomacy: Engaging with a Changing World”,

European Strategic Partnerships Observatory, Working Paper 8, June 2014, p.10. 3 Brazil’s Ministry of Foreign Affairs, “People´s Republic of China – Bilateral relations”. Available in

http://www.itamaraty.gov.br/index.php?option=com_content&view=article&id=4926&Itemid=478&cod_pais=CHN&tipo=ficha_pais&lang=pt-br. [Accessed on Dec. 12th, 2014]. 4 People’s Daily, “Top 10 trading partners of the Chinese mainland”. Available in

http://www.chinadaily.com.cn/bizchina/2014-02/19/content_17290565.htm#Contentp. [Accessed on Dec. 12th, 2014.]. 5 China Radio International Fanzine, “Confiança mútua entre Brasil e China merece mais destaque – Entrevista

com o embaixador do Brasil na China, Valdemar Carneiro Leão” [Mutual trust between Brazil and China desserves more emphasis – Interview with the Brazilian ambassador in China, Valdemar Carneiro Leão], Ed. 48, No 4, 2014, p.15.


31

important mechanism to promote the Strategic Partnership. This commission exists as

an institutional tool to monitor continuously the development of the bilateral relations.

According to the Brazilian Vice-President, Michel Temer, “the COSBAN

encompasses, then, the monitoring of our relations in important areas such as the

political dialogue over common interests on bilateral level and in multilateral forums;

trade and investment relations; finance issues; agriculture; energy and mining; space

cooperation and science and technology; as well as culture and education”1

The commission was supposed to meet every two years, however, until 2010,

there had been only one meeting in 2006. The situation changed in 2010, when both

parties signed a Joint Action Plan (2010-2014), elaborated by COSBAN. The plan

“sets the objectives, concrete goals and guidelines for bilateral cooperation for the

next five years”2. The role of COSBAN was reinforced, and consequently, the

commission has gathered in 2012 and 2013.

In 2012, Brazil and China upgraded their relations from Strategic Partnership to

Comprehensive Strategic Partnership, the highest of this kind. In a joint statement,

Brazil and China noted that “this decision recognizes the growing global and strategic

influence of both countries, whose cooperation will be increasingly broader in an

international scenario characterized by deep changes”3. The Brazilian ambassador

Leao expressed a similar view when he said that the meaning of this upgrade was on

the fact that “both countries have common interests, not only bilaterally, but also

globally”4.

Through the same joint statement they announced the creation of the annual

China-Brazil Strategic Dialogue – between the Foreign Ministries – and the China-

1 Federative Republic of Brazil, “Cosban - Íntegra do discurso do Vice-Presidente Michel Temer”, [Cosban – Full

speech of Vice-President Michel Temer], February 14, 2012. Available in http://www2.planalto.gov.br/vice-presidencia/vice-presidente/noticias/noticias-do-vice/2012/02/cosban-integra-do-brinde-do-vice-presidente-michel-temer. [Accessed on Dec. 13th, 2014 ]. 2 Federative Republic of Brazil and People’s Republic of China, “Plano de Ação Conjunta entre o Governo da

República Federativa do Brasil e o Governo da República Popular da China, 2010-2014” [Joint Action Plan between the government of the Federative Republic of Brazil and the government of the People’s Republic of China, 2010-2014]. Available in http://dai-mre.serpro.gov.br/atos-internacionais/bilaterais/2010/plano-de-acao-conjunta-entre-o-governo-da-republica-federativa-do-brasil-e-o-governo-da-republica-popular-da-china-2010-2014. [Accessed on Dec. 10th, 2014]. 3 Federative Republic of Brazil and People’s Republic of China, “Comunicado Conjunto entre Brasil e China – Rio

de Janeiro, 21 de junho de 2012“ [Joint Communiqué between Brazil and China - Rio de Janeiro, June 21st, 2012]. Available in http://www.itamaraty.gov.br/index.php?option=com_content&view=article&id=3073&catid=42:notas&Itemid=280&lang=pt-br. [Accessed on Dec. 12th, 2014]. 4 China Radio International Fanzine, “Confiança mútua entre Brasil e China merece mais destaque – Entrevista

com o embaixador do Brasil na China, Valdemar Carneiro Leão” [Mutual trust between Brazil and China desserves more emphasis – Interview with the Brazilian ambassador in China, Valdemar Carneiro Leão], Ed. 48, No 4, 2014, p.15.


32

Brazil Ten-Year Cooperation Plan (2012-2021). The plan guides the new steps on

“science, technology, innovation and space cooperation; energy, mining infrastructure

and transports; investments, industrial partnerships and financial cooperation;

economic-commercial cooperation; cultural and educational cooperation and

exchange between civil societies”1.

Brazil and China also cooperate on international issues through the BRICS

perspective. Recently, during the 2014 BRICS Summit, all parties agreed to maintain

coordination on issues of global development and on the reform of global financial

and economic structures.

The intensification of Sino-Brazilian relations echoed in the number of

presidential visits by both parties since 2001, particularly from the Chinese side.

During the 1990s, there was only one Chinese visit in 1993, when Jiang Zemin went

to Brasilia. He returned in 2001 and was followed by Hu Jintao (2004 and 2010) and

Xi Jinping (2014).

Despite the fact that João Goulart, the vice-president of Brazil in 1961 had

visited Beijing, João Baptista Figueiredo was the first Brazilian president who

travelled to China, in 1984. José Sarney (1988), Fernando Henrique Cardoso (1995),

Lula da Silva (2004 and 2009) and Dilma Rousseff (2011) repeated the journey.

The improvement on trade and governmental relations has not affected all the

sectors in Brazil in a similar way. For Hsiang, Brazil is among the countries who have

negatively responded to China’s economic penetration2. The strong industrial sector,

especially, has been the main source of criticism regarding China.

In 2007, the Brazilian National Confederation of Industry reported that 52% of

companies competing with China on the domestic market had lost points on their

market share and 58% of the exporters lost clients to China3. Recently Roberto

Giannetti da Fonseca, head of trade issues at FIESP, the industry association of São

1 Federative Republic of Brazil and People’s Republic of China, “Comunicado Conjunto entre Brasil e China – Rio

de Janeiro, 21 de junho de 2012“ [Joint Communiqué between Brazil and China - Rio de Janeiro, June 21st, 2012]. Available in http://www.itamaraty.gov.br/index.php?option=com_content&view=article&id=3073&catid=42:notas&Itemid=280&lang=pt-br. [Accessed on Dec. 12th, 2014]. 2 Antonio C. Hsiang, “China Rising in Latin America: More Opportunities than Challenges”, Journal of Emerging

Knowledge on Emerging Markets, Volume 1, Issue 1, ICA Institute, November 2009, p.38. 3 CNI, “Concorrência com produtos da China afeta uma em cada quatro empresas industriais brasileiras”

[Competition with products from China affects one in four Brazilian industries]. Sondagem Especial, Ano 5, Nº.1, março de 2007. Available in www2.fiescnet.com.br/web/recursos/VUVSR01EY3pPQT09. [Accessed on Jan. 16th, 2015].


33

Paulo, said that China is “not a strategic partner”, and it just “wants to buy raw

materials with no value added and to export consumer goods”1.

In 2012, the Brazilian Vice-President Michel Temer requested China to control

its exports of manufactured goods to Brazil, since they were threatening the national

industry. He also complained about the predominance of commodities on the

Brazilian exports to China and expressed that Brazil would like to export more

industrialized goods to Chinese markets2.

3.3 Understanding the Similarities and Differences

After reviewing the historical development of Sino-Chilean and Sino-Brazilian

relations, it is important to compare the key points that affect their different view

concerning the influence of China in the region.

First of all, it is clear that economic factors play a key role on the bilateral

relations of China with these countries.

In Chile, trade has always been the key issue on the bilateral agenda with China.

Consequently, along the years the partnership and bilateral agreements were highly

concentrated on economic matters.

The nature of Chilean economy – export commodities and import manufactured

goods – makes the Chinese expansion towards global markets less harmful to Chile,

since they don’t compete in third markets with the same products. Moreover, the

arrival of more Chinese industrialized goods in Chile after the FTA was signed was

welcomed, since more products represent more competition and lower prices. For the

few manufacturing sectors in Chile, Chinese products were not seen as threat, since

these key sectors were protected on the FTA contract.

In this sense, we can assume that Chilean expectations regarding relations with

China are strongly connected to trade. The nature of this bilateral trade is, as the

Chinese literature in Latin America argues, very complementary on both sides’ views.

This situation directly impacts the low rate of negative views of China in Chile.

1 Jiang Shixue , “Demystifying the China-Brazil Relations”, China Institute of International Studies. Available in

http://www.ciis.org.cn/english/2014-09/29/content_7270603.htm. [Accessed on Jan. 16th, 2015]. 2 João Fellet, “Brasil pede à China que controle exportações ao país” [Brazil asks China to control exports], BBC,

February, 13, 2012. Available in http://www.bbc.co.uk/portuguese/noticias/2012/02/120209_china_brasil_jf.shtml. [Accessed on Nov 17th, 2014].


34

Sino-Brazilian relations are also strongly affected by economic factors. However,

the history of Sino-Brazilian relations shows that Brazil expects much more than just

trade from this cooperation. Since the 1980s, China and Brazil started nuclear energy

and space cooperation, signed and upgraded a Strategic Partnership, established

permanent mechanisms to promote the cooperation and jointly discuss international

affairs through BRICS. More recently, the establishment of the Joint Action Plan and

China-Brazil Ten-Year Cooperation Plan are indicators that Brazil expects from

China cooperation in fields other than trade, such as science, technology, and others.

Regarding trade, Brazil’s exports of iron ore and soy beans made China its main

commercial partner in the world. For commodity exporter sectors, the Chinese factor

is definitely positive. Nevertheless, the industrial nature of Brazilian economy forced

some sectors to pressure the government towards more diversification on the export

basket to China. Moreover, China has received several criticisms from industrial

sectors worried about the invasion of cheap Chinese manufactured goods in Brazil,

seen as non-complementary to Brazilian interests. As noted by González,

manufacturers in Brazil “who have been harmed by Chinese competition share more

with Mexican and Central American manufacturers than with their domestic

compatriots who have been making big windfalls from Chinese demand for raw

materials”1.

For Dominguez, these conflicts on trade directly affect the negative views of

China in Brazil. The author believes that those who objected Chinese influence in

Brazil “may have been affected by import competition”2.

In sum, raw materials trade is perceived as complementary by Brazilian sectors,

while industrial groups tend to see China as a non-complementary partner. At the

same time, the Brazilian government also expects to cooperate with China in several

fields other than trade, opening several possibilities to find common ground regarding

their perceptions of complementarity.

In the next chapter, I am going to discuss these key differences on the perception

of China among industrial sectors of Chile and Brazil, with a focus in the automotive

field. Besides, I present how these different views affected the Chinese car sales in

each country (positively in Chile and negatively in Brazil). I also present some

1 Francisco E. González, “Latin America in the Economic Equation – Winners and Losers: What Can Losers Do?”,

In China's Expansion into the Western Hemisphere: Implications for Latin America and the United States, Edited by by Riordan Roett and Guadalupe Paz, Brookings Institution Press, 2008, p.155. 2 Jorge Dominguez, “China’s Relations with Latin America: Shared Gains, Asymmetric Hopes”, Inter-American



35

suggestions that I believe could help the Chinese government to improve relations

with Brazil, especially in some complementary fields not widely explored yet.

CHAPTER 4 Case Studies: The Automotive Industries in Chile and Brazil

36

CHAPTER 4 Case Studies: The Automotive Industries in

Chile and Brazil

Since its discovery in the 15th century, Latin America has been a region with

structural problems that hamper a significant reduction of social inequality and

economic dependency of more developed nations. Even after the independence

processes in the 19th century, when the region could finally cut official ties with their

former colonizers, the new governments haven’t been able to overcome such

problems.

For Galeano, in the Latin American history “everything, from the discovery until

our times, has always been transmuted into European — or later United States —

capital, and as such has accumulated in distant centers of power”1. In Mechan´s view,

“the ebbs and flows of this inter-American system have largely reflected US

interests”2.

The development of the automotive industries in Latin America happened in the

context of the import-substitution wave in the region after the post-World War II. For

several scholars, the main idea concerning the import-substitution policies was that

Latin American countries, whose economies were traditionally based on exporting

commodities and importing manufactured goods, should break with this historical

colonial determinism to promote domestic development. In order to change this

reality, they believed these countries should establish their own industries to become

advanced economies, following the most developed nations and forcing companies to

migrate to Latin America. In this sense, protectionism was seen as necessary to attract

these industries – very interested in Latin American markets – to also establish their

production in the region.

Transportation and infrastructure were seen as two key sectors for a successful

import-substitution strategy. According to Moore, they could supply the transportation

necessities of growing economies, reduce the political and economic dependence on

developed countries and boost the economy, due to the proved positive effects of the

automotive industry, for example, on the overall economy3.

1 Eduardo Galeano, “120 Million Children in the Eye of the Hurricane”, In Open Veins of Latin America: Five

Centuries of the Pillage of a Continent. Monthly Review Press, 25th Anv. edition (1997), p.2. 2 Michael Mecham, “Mercosur: a failing development project?”, International Affairs, 79, 2 (2003), p.374.

3 Russell Martin Moore, “The Role of International Firms in Latin American Automotive Industry”, Journal of

International Business Studies, Vol. 3, No. 1 (Spring, 1972), p.53.


37

In this chapter, I present the historical development of the Chilean and Brazilian

automotive sectors. Considering the idea of Sino-Latin American complementarity

defended by Chinese scholars, I introduce my second research question: How this

Chinese approach that ignores regional differences in Latin America affected the

Chinese outcomes in the automotive sectors of Chile and Brazil?

I show that in Chile, governmental policies gradually weakened national

producers along the last decades, welcoming imports from different countries,

including from China. Brazil decided for an opposite strategy in which the automotive

sector was selected as one of the most important pillars of its economy. Nowadays,

national producers represent 20% of Brazil’s industrial GDP and have a strong

lobbying power. In this context, the import of Chinese cars in Brazil was strongly

opposed by important domestic actors.



trying to export its vehicles in the same way. According to my perspective, these

decisions collaborate to improve its image in Chile, but deteriorate it in Brazil.

Due to these different perceptions of complementarity, Chile has included

automotive field on the terms of China-Chile FTA and recently became the top

destination for Chinese cars in Latin America, while Brazil has approved several

protectionist measures to obstruct their entrance into its large local market.

In each case, I present a historical overview on the development of the

automotive sector. I divide the different stages and policies adopted by the Chilean

and Brazilian governments and how they affected the automotive field until the arrival

of Chinese cars in Chile and Brazil in 2007. This part is followed by a discussion over

the domestic reactions, negotiations and political outcomes regarding Chinese cars in

both countries. To conclude, we analyze both cases using Putnam’s Two-Level

Games concepts.

4.1 The Case of Chile

4.1.1 Historical Overview

The automotive production in Chile started in 1956. Although the government

banned car imports to develop the domestic industry, national producers were allowed

to import parts – even though there weren’t official requirements concerning local


38

content rates. In 1961, there were already nineteen car companies producing in Chile,

mostly small firms.

In 1962, the government launched a policy aiming to increase national content

percentages, which created serious problems for car companies, since they didn’t have

a good infrastructure and suppliers in Chile. As a result, many factories were forced to

shut down during the 1960s.

A second stage of the Chilean automotive industry initiated in 1971, when the

leftist president Salvador Allende changed the automotive policy. He proposed the

selection of only three companies to produce respectively trucks, small and medium

cars. All of them should be controlled by the state (minimum of 51% of participation).

Pegaso (Spain), Citroen and Peugeot (France) were the chosen companies.

Nevertheless, this policy would never be adopted. As explained in the previous

chapter, in 1973 Augusto Pinochet made a military coup that overthrew Allende and

changed the economy’s principles. This third stage represented a big shift in Chilean

economy towards liberalization. For the automotive sector, his plan was to help the

remaining national based producers through financial incentives; but in return, these

companies should develop technology and increase productivity1. Gradually, the

government reduced the automobile import fees, from 300% in 1973, to 115% in 1978

and to 10% in 1979. These measures directly affected car imports in Chile. While in

1975 Chile imported only 2.205 vehicles (22.5% of total sales), in 1980 this number

rose to 91.797 units (75% of total sales).2 This new policy attracted many foreign

brands especially from Japan, such as Daihatsu, Suzuki, Subaru, Datsun, Mazda and

Honda.

After the end of the authoritarian rule in 1990, Chile intensified its process of

opening the economy. As we explained in the second chapter, it was possible only

because of the consensus reached among societal and political elites on this new

political moment of Chile, favoring a liberal export-driven development model. This

vision reflected on the automotive field. At that time, almost 100% of the cars sold in

Chile were imported3.

1 Among four companies, three were foreign firms: Fiat, General Motors and Peugeot-Renault. Only Corfo, who

was associated with Citroën, was a Chilean company. 2 Carlos Godoy Vera, “Antecedentes sobre la evolución de la industria automotriz”, [Background on the evolution

of the automotive industry], Department of Statistics and Publications of the Central Bank of Chile (1982), p.31. Available in http://www.bcentral.cl/estudios/estudios-economicos/pdf/serieestudios12.pdf. [Accessed on Aug 28th, 2014]. 3 Diego Díaz, Rodrigo Veyl and Cristóbal Galli, “Un análisis de los Antecedentes de Confianza y la Lealtad hacia las

Marcas de la Industria Automotriz en Chile”, [An analysis of the History of Trust and Brand Loyalty of the


39

The Financial Crisis in 1997 strongly affected Chile “more than any other Latin

American country”, according to Faust1. Since Chile’s exports were in a high extent

dependent on the Asian demand, the recession in Asia affected their domestic

economy. Consequently, from 1998 to 2002, the automotive sector was also

weakened.

After this period, the economy in general including the automotive sector

recovered. For national producers, however, it was not a sign that their sales would

increase, given that the liberal economy of Chile was very friendly to imports.

4.1.2 The arrival of Chinese cars

The arrival of Chinese cars not only in Chile, but all over Latin American

markets, was pushed by China’s “go out” strategy held by Beijing in the late 1990’s

and strengthened in 2003, in which state-owned companies were encouraged to

expand its activities going abroad. The main goals of this policy were linked with the

Chinese diplomatic goals to have more access to strategic resources and markets in

the developing world. According to Medeiros, this approach has been used mostly in

Africa and Latin America, “which increasingly purchase Chinese consumer goods,

cars and conventional weapons”2.

As noted by Ueda, the global expansion of Chinese automakers is similar to the

process experienced by Japanese brands in the 1990s and Koreans in the first decade

of the 21st century3.

The Chilean market was affected by this new wave right after they signed a Free

Trade Agreement with China, in 2006. The agreement was supported and celebrated

by organizations such as the National Automobile Association of Chile (ANAC) and

Chilean National Chamber of Automotive Commerce (CAVEM).

Following the implementation of the FTA, Chile immediately removed all its

tariffs concerning vehicles made in China. The very liberal nature of the governmental

Automotive Industry in Chile], Universidad de Chile, p.12. Available in http://tesis.uchile.cl/bitstream/handle/2250/111219/aguayo%20d%C3%ADaz.pdf?sequence=1. [Accessed on Aug 28th, 2014]. 1 Faust Jörg Faust, “Latin America, Chile and East Asia: Policy-Networks and Successful Diversification”, Journal of

Latin American Studies, Vol. 36, No. 4 (Nov., 2004), p.754. 2 Evan S. Medeiros, “China´s International Behavior – Activism, Opportunism and Diversification”, Rand, 2009,

p.148. 3 Thiago Ueda, “A entrada dos veículos comerciais leves chineses: uma ameaça à hegemonia das grandes

marcas?”, [The entry of the Chinese light commercial vehicles: a threat to the hegemony of the dominant companies?], Journal of Transport Literature, Vol. 7, n. 1, Jan 2013, p.88.


40

policies along the years forced the gradual shut down of national based companies.

The last one was General Motors, who left Chile in 2008.

For the Secretary-General of ANAC Gustavo Castellanes, Chinese companies

and the Chilean market are very complementary. During an interview, he stated that

the low price and high safety of Chinese cars, combined with the open and

competitive nature of the Chilean market are the reason of this win-win partnership1.

Since their arrival, cars produced in China have been increasing their

participation in the local market. If in 2006 there were no Chinese cars in Chile, in

2013 they represented 17% of total sales (see chart 6). According to ANAC, in 2013

there were 24 Chinese car and truck brands among the Top 60 sellers in Chile,

including both private and state owned companies2. In the same year, Chile ranked 3

rd

on the Top destinations for Chinese car exports, receiving 71.600 units, behind only

Algeria and Russia (see chart 7)3. In Latin America, Chile was the most important

market for China.

During this period, 91% of the cars sold in Chile came from countries with

whom Chile has signed FTAs and 66% were produced in Asia. South Korea leads the

ranking followed by China, Japan, Thailand and Mexico, among others (see chart 8)4.

1 Peter Vanham, “Chinese cars find eager buyers in Chile”, Financial Times, August 23, 2012. Available in

http://blogs.ft.com/beyond-brics/2012/08/23/chinese-cars-find-eager-buyers-in-chile/. [Accessed on Mar 8th, 2015]. 2 Brilliance, BYD, Changan, Changhe, Chery, DFM, Dongfeng, DFSK, FAW, Foton, Gac Gonow, Gac Motor, Geely,

Great Wall, Hafei, Higer, Jac, Jinbei, JMC, Landwind, Lifan, Maxus, ZNA and ZN Auto. 3 China exported 977.300 vehicles in 2013. See in China’s Daily, “Year of Horsepower: Car industry shifts gears”,

February 10, 2014. Available in http://www.chinadaily.com.cn/business/motoring/2014-02/10/content_17273776_8.htm. [Accessed on Aug 28th, 2014]. Also see China Auto Web, “Chinese Auto Exports Dropped Below 1 Million in 2013”, January 13, 2014. Available in http://chinaautoweb.com/2014/01/chinese-auto-exports-dropped-below-1-million-in-2013/. [Accessed on Aug 28th , 2014]. 4 National Automobile Association of Chile, “2013 Yearbook”. Available in

http://www.anac.cl/web/images/anuario2012.pdf.


41

Source: ANAC

Source: China Auto Web


42

Source: ANAC

The effects of these friendly Chilean policies on Sino-Chilean relations are often

highlighted by diplomatic officials and during high level bilateral meetings.

The former presidents Hu Jintao and Michelle Bachelet met in 2008 and “noted

with pleasure the dynamic business relations between the two sides since the signing

and smooth implementation of the Free Trade Agreement between China and Chile”1.

In 2011 the former Chinese ambassador to Chile Lu Fan pointed out that in

recent years “China and Chile have strengthened win-win cooperation” and “he had

strong confidence in the future of the all-around cooperative partnership between the

two countries”. For him, the China-Chile FTA “has provided new fields and channels

for both sides to expand mutually beneficial cooperation”2.

For the Chinese government Chile has been a successful example of cooperation

between China and Latin America. In 2013, Xi Jinping pointed out that “in terms of

relations with China, Chile is always at the forefront of Latin American countries”3.

Next year he pointed out that “the Chinese side appreciates the support of the Chilean

side to the development of the China-Latin America relations, and hopes that the

1 People’s Republic of China, “Joint Press Communiqué Between the People's Republic of China and the Republic

of Chile”, April 16, 2008. Available in http://www.fmprc.gov.cn/mfa_eng/wjdt_665385/2649_665393/t427229.shtml. [Accessed on Mar 8th, 2015]. 2 People´s Daily, “China's vice president visits Chile to promote bilateral relations”, June 13, 2011. Available in

http://en.people.cn/90001/90776/90883/7408398.html. [Accessed on Mar 8th, 2015]. 3 Embassy of the People’s Republic of China in Chile, “President Xi Jinping Meets with President Sebastian Pinera

of Chile”, June 10, 2011. Available in http://www.ambchine.mu/eng/zgxw/t1085513.htm. [Accessed on Mar 8th, 2015].


43

Chilean side continues to play a positive role in promoting the China-Latin America

overall cooperation”1.

4.2 The Case of Brazil

4.2.1 Historical Overview

For some authors, the auto industry is considered the most important industry in

Brazil2. However, until the middle of the 20th century, Brazil did not produce vehicles.

Despite the fact that companies like Ford and General Motors were established in São

Paulo, at that time they just imported all the parts and assembled their production in

Brazil.

In 1952, in the context of the import-substitution wave, Brazil announced the

first National Plan to Promote the Auto Industry. But due to the political crisis in that

year, the plan was launched only in 1956. The strategy was part of the Brazilian

President Juscelino Kubitschek’s motto of “50 years of development in 5”, in which

the automotive industry would have a remarkable role.

The plan limited imports and gave foreign companies only two options: produce

vehicles with almost 100% Brazilian-made content within five years and enjoy

financial subsides; or leave the Brazilian market3. The automotive regime also

allowed foreign companies to enter with full management control. Initially, Simca

(France), Willys Overland (U.S.), Volkswagen and Vemag (Germany), among others,

established their factories in Brazil. In 1961, six years after the policy was

implemented, there were eleven companies producing in Brazil.

The military government established after the 1964’s coup loosened the rules for

national content, attracting other U.S. companies interested to have their factories in

Brazil. Then, Ford (1966), GM (1968) and Chrysler (at the beginning of 1970s)

started their production in Brazilian territory. The competition of American

1 People’s Republic of China, “Xi Jinping Holds Talks with President Verónica Michelle Bachelet Jeria of Chile”,

November 12th, 2014. Available in http://www.fmprc.gov.cn/mfa_eng/topics_665678/ytjhzzdrsrcldrfzshyjxghd/t1211026.shtml. [Accessed on Mar 8th, 2015]. 2 Flávio Limoncic, “The Brazilian automotive industry in international context: from European origins to American

crisis”. Paper presented at the “New perspectives on Latin America and the US Noon Lecture Series”, University of Michigan, Jan. 2009, p.1. Available in http://historiaunirio.com.br/numem/pesquisadores/flaviolimoncic/?c=download_biblio&arq=MjY%3D. [Accessed on Nov 25th , 2014]. 3 Helen Shapiro, “State Intervention and Industrialization: The Origins of the Brazilian Automotive Industry”,

Yale University, 1988, p.26.


44

companies was tough for the Europeans and none of them survived on this new

environment, except Volkswagen. In the end of 1960s, VW, GM and Ford were

responsible for 89% of national production. The market, however, was still very

protected by the governmental rules and car imports were still prohibited. According

to Moore, at that time “automotive exports [were] welcomed as a contribution to

solving the foreign exchange bottleneck, but there [was] little motivation to accept

imports in return if they would merely increase competition for existing Brazilian

producers”1.

From 1969 to 1973, the automotive industry was the most important pillar for the

so-called “Brazilian miracle”, when the domestic car production reached an annual

22% growth rate. These impressive numbers made the automotive industry in Brazil

in the 1970s “the most important consumer durables industry in Latin America and

the developing world”2. In this context, Fiat (Italy), who would rapidly become part of

the “Big 4” producers in Brazil (with Volkswagen, GM and Ford), arrived in 1976.

In the 1980s, the sector entered in recession, following the “Lost Decade” in

Latin America, when the region as a whole suffered with stagnation, high inflation

and unemployment. This economic crisis contributed for high levels of criticism over

the military government and the consequent end of the authoritarian regime in Brazil.

The first democratic president elected after 24 years Fernando Collor finally

opened up the market to imports in 1990. At that time, the government believed that

opening was necessary to increase internal competition and enhance the international

competitiveness of the Brazilian industry. For Mukherjee and Sastry, the transition

from the import-substitution model to world integration was unavoidable in Brazil,

since “isolation from world trade hampered industry development”3. As expected,

national producers did not welcome the new policy after decades of “close and

cooperative relations with the government”4.

Collor’s economic policies were not able to contain inflation, which followed an

internal crisis and deep recession. He faced an impeachment process and was replaced

by Itamar Franco in 1992. A stabilization program headed by his Minister of Finance

1 Russell Martin Moore, “The Role of International Firms in Latin American Automotive Industry”, Journal of

International Business Studies, Vol. 3, No. 1 (Spring, 1972), p.63. 2 Laura Gómez Mera, “Macroeconomic Concerns and Intrastate Bargains: Explaining Illiberal Policies in Brazil’s

Automobile Sector”, Latin American Politics and Society, Vol.49, No.1 (Spring 2007), p.120. 3 Avinandan Mukherjee and Trilochan Sastry, “Automotive Industry in Emerging Economies: A Comparison of

South Korea, Brazil, China and India”, Economic and Political Weekly, Vol. 31, No. 48 (Nov. 30, 1996), p.76. 4 Laura Gómez Mera, “Macroeconomic Concerns and Intrastate Bargains: Explaining Illiberal Policies in Brazil’s

Automobile Sector”, Latin American Politics and Society, Vol.49, No.1 (Spring 2007), p.122.


45

Fernando Henrique Cardoso was initially unfavorable to automotive companies. In his

neoliberal view, sectoral policies and incentives for certain industries were inefficient;

therefore, the solutions for the high inflation were trade liberalization and the

consequent growth on imports, in order to contain prices.

However, the Brazilian National Association of Motor Vehicle Manufacturers

(ANFAVEA) pressured hard the government. At the same time, neoliberal measures

to promote trade liberalization and control inflation led to a rising trade deficit,

especially on the automotive sector. Then, both parties agreed that selective measures,

as a protectionist automotive regime, could contribute for normalizing the balance of

trade as a whole.

Similarly to the first national plan to promote the automotive industry, from 1956,

the Automotive Regime approved in 1995 was based on tariff barriers to enhance

national production, but also offered subsides for foreign brands interested in

producing in Brazil.

While the “Big 4” still accounted for 90% of sales, this new policy attracted new

companies, mostly from Japan and France, to produce in Brazil – Honda (1997),

Mistubishi (1998), Toyota (1998), Renault (1998), Nissan (2000) and Peugeot/Citroen

(2001). For Ueda, in the 21st century the Brazilian market became an oligopoly

among the traditional Big 4, with the addition of Toyota, Honda, Renault and

Peugeot-Citroen1.

The growth of Japanese and French brands, as well as the arrival of imported

Korean and Chinese cars on the 2000s represented a new challenge for the national

based brands.

4.2.2 The arrival of Chinese cars

There were no Chinese cars in Brazil, when, in 2007, the state-owned Changan

started selling in Brazilian territory2. This company was followed by other state-

owned brands, such as Hafei (2008)3, Chery/Rely (2009)

1, Jac Motors (2011)

2, as well

1 Thiago Ueda, “A entrada dos veículos comerciais leves chineses: uma ameaça à hegemonia das grandes

marcas?”, [The entry of the Chinese light commercial vehicles: a threat to the hegemony of the dominant companies?], Journal of Transport Literature, Vol. 7, n. 1, Jan 2013, p.84. 2 Changan Motors website. Available in http://changanmotors.com.br/a-changan-motors/. [Accessed on Nov

15th

, 2014]. 3 Xinhua, “New policy to encourage China's carmaker consolidation”, Available in

http://news.xinhuanet.com/english2010/china/2010-02/22/c_13182876.htm. [Accessed on Nov 15th, 2014].

Also check´: Globo, “Alegria dos 'dogueiros', Towner volta ao Brasil” [The joy of hot dog makers, Towner’ is back to Brazil]. Available in http://g1.globo.com/Noticias/Carros/0,,MUL847436-9658,00-ALEGRIA+DOS+DOGUEIROS+TOWNER+VOLTA+AO+BRASIL.html. [Accessed on Nov 15th, 2014].


46

as private brands such as Jinbei (2008)3 and Lifan (2010)

4. Initially, none of them

were producing in Brazil.

The Chinese brands did not represent a big threat for the traditional companies

until 2010, when their sales in Brazil rose 627%, from 2.753 units in 2009 to 20.023

in 2010. In 2011, 66.412 units were sold, placing Brazil among the Top 3 destinations

for Chinese car exports5. At the same time, the “Big 4” saw their market share

decrease to 74% in 20106.

ANFAVEA, then, pressured the government to approve measures against

imported cars. The national producers argued that they were one of the largest pillars

of the Brazilian economy, employing directly around 150.000 people in Brazil, while

another 1.5 million work in the automotive sector as a whole. Moreover, their

activities generate huge taxes for the government. The second important interest

group involved were the labor unions who also pressured the government and

supported those claims, in order to preserve their jobs in industry.

In 2011, the internal pressures intensified and after several meetings between

industry representatives and politicians, the government increased by 30% the

industrial-product tax (IPI) on imported cars. Vehicles produced in the Mercosur

region and Mexico, with whom Brazil signed automotive agreements were not

affected. For Brazil's finance minister, the country was under siege from imports and

risking losing its position on the international automotive market7.

In next year, the industrial-product tax (IPI) for cars produced in Brazil was

eliminated, helping to boost even more the national industry. Those actions

1 Chery Brazil website. Available in http://www.cherybrasil.com.br/chery-brasil. [Accessed on Nov 15th, 2014].

2 Jac Motors website. Available in http://www.jacmotorsbrasil.com.br/perguntas-frequentes. [Accessed on Nov

15th, 2014]. 3 Jinbei arrived at the same time as Hafei, through the same importer company.

4 Autoesporte, “Chinesa Lifan chega ao Brasil com modelo ‘inspirado’ no Mini Cooper” [Chinese Lifan arrives in

Brazil with a model ‘based’ on Mini Cooper]. Available in http://g1.globo.com/carros/noticia/2010/09/chinesa-lifan-chega-ao-brasil-com-modelo-inspirado-no-mini-cooper.html. [Accessed on Nov 15th, 2014]. 5 Paul Shortell, “Chinese Automakers in Latin America Shift into High Gear”, China and Latin America

Inter-American Dialogue. Available in http://chinaandlatinamerica.com/2014/07/22/chinese-automakers-in-latin-america-shift-into-high-gear/. [Accessed in Jan 9th, 2014]. 6 Ernst & YoungTerco/Fenabrave.

Available in http://www3.fenabrave.org.br:8082/plus/modulos/listas/index.php?tac=indices-e-numeros&idtipo=1&layout=indices-e-numeros. [Accessed on Nov 15th, 2014]. 7 The Economist: “A self-made siege”. Sep 24th 2011. Available in http://www.economist.com/node/21530144.

[Accessed on Dec 16th, 2014].


47

contributed to reduce the sales of imported vehicles in Brazil from 24% of the total in

2011 to 18% in 20131 (see chart 9).

Source: Anfavea

Domestically, these measures were condemned by the Association of Brazilian

Automotive Importers (ABEIVA), who represents all Chinese brands in Brazil2. At

the international level, the protectionist actions generated several criticisms, especially

from Japan and South Korea, who warned Brazil at a committee on the World Trade

Organization3.

Meanwhile, in October of 2012, Brazil continued its crusade against imported

cars, approving the new National Automotive Regime (also known as Inovar-Auto).

The new law increased by 30% the IPI tax for all companies failing requirements

concerning national content and R&D.

Chinese companies were highly affected by all these measures. In 2011 they sold

66.412 vehicles in Brazil, however, the number dropped to 46.310 in 2012 and 30.510

in 2013 (see chart 10). If in 2011 automobiles represented 3.7% of the total of Chinese

exports to Brazil, the percentage was 2.8% in 20134.

1 The Wall Street Journal: “Brazil to Boost Car Sales Tax Next Year”. Dec. 24th, 2013. Available in

http://online.wsj.com/news/articles/SB10001424052702304020704579278280944894964. [Accessed on Dec 16th, 2014]. 2 Globo, “Abeiva critica barreira à importação de demais países” [Abeiva criticizes barriers against imports from

other countries]. May, 13th, 2011. Available in http://g1.globo.com/economia/noticia/2011/05/abeiva-critica-barreira-a-importacao-de-demais-paises.html. [Accessed on Dec 16th, 2014]. 3 Reuters: “Japan and S.Korea warn Brazil on imported cars tax”. Oct 14, 2011. Available in

http://www.reuters.com/article/2011/10/14/brazil-trade-cars-idUSL5E7LE2JZ20111014. [Accessed on Dec 16th, 2014]. 4 China Brazil Business Council, “Bilateral trade Brazil-China”, Jan, 24th, 2014. Available in

http://www.cebc.org.br/sites/default/files/informativo_no_19.data_.pdf. [Accessed on Dec 12th, 2014].


48

These unfriendly Brazilian policies caused some frictions for Sino-Brazilian

relations. Consequently, both sides used their diplomatic channels to discuss the

Chinese exports and the Brazilian protectionism. This issue has been debated on state

visits and through the China-Brazil Commission of High Level of Agreement and

Cooperation (COSBAN).

The subject has been first discussed during Dilma Rousseff’s presidential trip to

China, in 2011. In that occasion, both countries agreed to expand and diversify

reciprocal investments on the automotive industry through partnerships between

companies from China and Brazil, going beyond trade1.

Chart 10 - Evolution on Chinese sales on the Brazilian Automotive market - 2008-2013

Source: ANFAVEA

The second round of negotiations happened during the second COSBAN meeting,

held in Brasília in 2012. Delegations headed by the Brazilian Vice-President Michel

Temer and the Chinese Deputy Prime Minister Wang Qishan, discussed the arrival of

Chinese products in Brazil. According to Temer, his country was “worried about the

massive and indiscriminate rise of Chinese products in Brazil, which causes the

1 Federative Republic of Brazil, “Comunicado Conjunto entre a República Federativa do Brasil e a República

Popular da China - Pequim, em 12 de abril de 2011” [Joint Communiqué between the Federative Republic of Brazil and People´s Republic of China – Beijing, April, 12th, 2011]. Available in http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/comunicado-conjunto-entre-a-republica-federativa-do-brasil-e-a-republica-popular-da-china-pequim-em-12-de-abril-de-2011/print-nota. [Accessed on Dec 18th, 2014].

Protectionist measures


49

displacement of the Brazilian production, producing unemployment and obstacles for

Brazilian business sector”1.

The Brazilian government also emphasized that both sides must explore more the

complementarity of their economies on bilateral trade. In this sense, the exports

should be concentrated on sectors in which the other part is unable to meet the

demands of the domestic market. The automotive sector, as shown before, is already

established in Brazil and is a non-complementary sector according to the Brazilian

view.

By the Chinese side, the criticism over Brazil was concentrated on the rise of

industrial-product tax (IPI) for imported vehicles; however, they showed interest to

talk about this decision and the alternatives for Chinese companies selling in Brazil2.

The third COSBAN meeting took place in Guangzhou in 2013. In this occasion,

both sides reinforced their efforts to explore the opportunities for their complementary

economies and exchanged their opinions about the new Brazilian Automotive Regime

(Inovar-Auto), which created an unfavorable environment for Chinese car exports.

The president of ANFAVEA, one of the most important pro-protectionism groups,

joined the Brazilian delegation3.

Nevertheless, since the beginning of Brazil-China discussions over the

automotive protectionism, no agreement has been reached. The outcomes have been

mostly negative for the Chinese aspirations to export cars to Brazil. To overcome the

problems concerning import taxes, state-owned Chery and Jac Motors decided for

building factories in Brazil. The remaining brands, however, are likely to

continuously face problems.

Recently, the Assistant Minister of Commerce of China Shouwen Wang publicly

criticized the high Brazilian taxes. Moreover, he suggested that an FTA between

1 Federative Republic of Brazil, “Brinde do Senhor Vice-Presidente da República por ocasião de almoço oferecido

ao Vice-Primeiro-Ministro da República Popular da China, Wang Qishan” [Vice-President of the Republic’s toast during lunch offered to the Deputy Prime Minister of China, Wang Qishan], Feb. 14. 2012. Available in http://www2.planalto.gov.br/vice-presidencia/vice-presidente/noticias/noticias-do-vice/2012/02/cosban-integra-do-brinde-do-vice-presidente-michel-temer. [Accessed on Dec 18th, 2014]. 2 João Fellet, “Brasil pede à China que controle exportações ao país” [Brazil asks China to control exports], BBC,

February, 13, 2012. Available in http://www.bbc.co.uk/portuguese/noticias/2012/02/120209_china_brasil_jf.shtml. [Accessed on Nov 17th , 2014]. 3 Federative Republic of Brazil, “Ata da Terceira Reunião da Comissão Sino-Brasileira de Alto Nível de

Concertação e Cooperação (COSBAN)” [Record of the Third Meeting of China-Brazil Commission of High Level of Agreement and Cooperation (COSBAN), Guangzhou, Nov. 6, 2013. Available in http://kitplone.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/ata-da-terceira-sessao-plenaria-da-comissao-sino-brasileira-de-alto-nivel-de-concertacao-e-cooperacao-cosban-cantao-6-de-novembro-de-2013.


50

China and the regional bloc Mercosur would be mutually beneficial, but complained

about the lack of interest from Brazil1.

4.3 A Two-Level Games Analysis

In the last part of this chapter we analyze the domestic reactions to Chinese cars

in Chile and Brazil according to the logic of Two-Level Games, developed by Robert

Putnam.

To explain the different outcomes for each case, the analysis is concentrated on

five key points considered by Putnam as important factors that affect the size of each

part’s win-sets, and consequently, the likelihood of agreement between two nations.

The key points are the following:

1. The size of the win-set (and thus the negotiation room of the Level 1 negotiator)

depends on the relative size of the ‘isolationist’ forces (who oppose international

cooperation in general) and the ‘internationalists’ (who offer ‘all-purpose’

support) (…) More self-sufficient states with smaller win-sets should make fewer

international agreements and drive harder bargains in those that they do make;

2. The group with the greatest interest in a specific issue is also likely to hold the

most extreme position on that issue;

3. The lower the cost of no-agreement to constituents, the smaller the win set;

4. The greater the autonomy of central decision-makers from their Level 2

constituents, the larger their win-set and thus the greater the likelihood of

achieving international agreement;

5. The larger [a negotiator’s] win-set, the more easily he can conclude an agreement,

but also the weaker his bargaining position vis-à-vis the other negotiator.

This research does not focus on the possible complexities on the Chinese Level 2

negotiations, due to space and framework limitations.

Therefore, we analyze Chilean and Brazilian Level 2 negotiations, as well as

their international negotiations with China (Level 1). I, then, consider that the Chinese

side, represented by CAAM (China Association of Automobile Manufacturers) is

highly interested in selling its cars in both Chile and Brazil. Thus, China tends to have

1 Jamil Chade, “China Critica Protecionismo Brasileiro”, [China Criticizes Brazilian Protectionism], O Estado de São

Paulo, Oct 16th

, 2014. Available in http://economia.estadao.com.br/noticias/geral,china-critica-protecionismo-brasileiro-imp-,1577604. [Accessed on Jan 20th, 2015].


51

more to lose with the maintenance of the status quo and, consequently, a larger win-

set. I also consider that, since several Chinese automakers selling in Latin America are

state-owned companies, their position tend to be aligned with the Chinese

government’s, reducing the complexities to negotiate at Level 2 with Chinese

constituents. In this sense, the domestic pressures in China are not considered very

relevant for Chinese negotiators at the Level 1 talks. Therefore, the biggest challenges

for China in these cases are the international negotiations, not the satisfaction of

internal audiences.

4.3.1 Chile-China Two-Level Negotiations

In the Chilean case, we analyze the process of agreement between Chile and

China regarding the Free Trade Agreement, in 2006, which opened Chile’s market for

Chinese cars. We don’t analyze the whole process and forces included on the

discussions over the FTA, but only those concerning the automotive field which made

possible the inclusion of this sector on the FTA’s final list.

Following our methodology, the first variable to evaluate is the relative size of

isolationist and internationalist forces in Chile. As we explained, since the 1970s, the

reforms promoted by Pinochet progressively weakened the sectors who had invested

in import substitution industries (the automotive was one of them). This liberal shift in

the 1970s and its intensification after the 1990s gradually transformed Chile in one of

the most opened countries in the world concerning trade (ranks on 8th on the Enabling

Trade Index of the World Economic Forum)1. Since Chile’s economic strategy is still

focused on supplying the world with some very specific commodities (especially

copper) and importing manufactured goods they can’t produce (cars, for example),

they are very dependent on international trade. In this sense, international agreements

are very important for Chile to continuously access new markets and import products

at a competitive price2. Therefore, the internationalist forces have a strong role in

Chile, and consequently, they prevail over the isolationist forces, making the Chilean

win-set for international negotiations larger.

Second, the constituents with the greatest interest in a Free Trade Agreement –

and the consequent arrival of Chinese cars in Chile with low taxes – were the

1 Robert Z. Lawrence, Margareta Hanouz and Sean Doherty, “The Global Enabling Trade Report 2012 - Reducing

Supply Chain Barriers”, World Economic Forum, 2012. 2 According to the same WEF ranking, Chile ranks 1st on foreign market access, facing the lowest tariffs in the

world.


52

automotive associations (ANAC and CAVEM), as well as the civil society, whom, as

expected, held the most extreme position on that issue, making an agreement very

likely. As we presented in the first chapter, the Chilean society holds the most

favorable view towards China among the Latin American countries surveyed. Since

the last national carmaker left Chile in 2008, their resistance is considered inexistent.

In this respect, Chilean’s FTA negotiators didn’t suffer relevant pressures from their

Level 2 constituents.

Third, a hypothetical non-agreement for Chile could be costly, since diversifying

imports is their key to ensure competition at their domestic markets, decreasing prices

and increasing quality. Therefore, since the cost of no-agreement with China could be

high, their win-set for negotiations was larger. In other words, the majority of Chile’s

relevant constituents saw the possible arrival of Chinese cars in their country as a

profitable situation.

The fourth point regards the autonomy of central decision-makers from the

domestic constituents. As we just explained, the government did not suffer much

pressure from big domestic automotive producers, since they were gradually

weakened. In such conditions, the government could easily add the automotive field

on the FTA list, increasing the probability of international agreement regarding this

sector. In other words, a rational move at one table was not impolitic for the

negotiators at the other board (the basic complexity of the Two-Level Games).

Finally, all this process culminated with the establishment of a larger win-set

from the Chilean part, making easier to conclude an agreement according to Putnam’s

concepts. Even though he considers that a large win-set can reduce the negotiators

bargaining power, the Chinese counterparts were equally interested in such agreement,

increasing the overlapping win-sets and the likelihood of agreement.

As I discussed in the theoretical framework, it is possible to establish a

connection between the size of win-set and the perception of complementarity.

Therefore, the larger win-set in Chile also represents a greater view of China as a

complementary partner among actors related to automotive sector, confirming the

assumption of the Chinese literature on Latin America. Moreover, the Chinese

decision to invest in this sector probably reinforces the positive image they have

among Chileans, since China is not seen as a threat in this case (see chart 11).


53

4.3.2 Brazil-China Two-Level Negotiations

Applying Putnam’s concepts, we have an understandable behavior in the

Brazilian case. First, Brazil has a huge industrial park with a self-sufficient and


54

established automotive field, therefore, the isolationist forces tend to prevail at the

Level 2.

These forces, namely the domestic automakers (represented by ANFAVEA) and

labor unions, tend to pressure the government to adopt favorable policies against, in

their view, an international threat for their business. On the other side of this domestic

struggle, the association of Brazilian automotive importers (ABEIVA), pressures

towards liberal policies, however, they are not strong enough to effectively balance

the isolationist forces at Level 2. ABEIVA does not create as many jobs as the

national producers in Brazil neither generates huge taxes to the government.

This situation makes the relative size of the isolationist forces much larger than

the internationalist forces. Consequently, the isolationists pressure for a very small

win-set on the negotiations with China.

Second, since these two opposing groups have the greatest interest in the policies

for the automotive field, they tend to hold the most extreme positions on this matter.

In other words, for those isolationist actors, few Level 1 agreements with China would

be ratified at the Level 2. In their view, it is highly desirable to see foreign based

companies facing problems to sell in Brazil. In the opposite side, the internationalist

forces, represented mainly by ABEIVA, pressure to have the most open as possible

market, however, they are not strong enough.

Third, the strongest Brazilian constituents have very little to profit from the

hypothetical situation in which Chinese cars would enter Brazil without special taxes.

Since the cost of no-agreement is very low to these constituents, their win-set is

smaller, in order to maintain the status quo.

The fourth point that explains the smaller win-set from the Brazilian side

concerns the autonomy of central decision-makers. As discussed above, Brazil’s

domestic economy is very dependent on the automotive industry, which represents

almost 20% of the industrial GDP. Moreover, automotive policies affect employment

rates in Brazil, since more than 1.5 million people work directly or indirectly in the

automotive sector. Consequently, the autonomy of central decision makers regarding

their most important constituents at Level 2 is considerably small, which reduces the

size of their win-set and the likelihood of international agreements in this field.

Fifth, the smaller Brazilian win-set contributes to strength its bargaining position

at Level 1 negotiations with China. Brazilian negotiators use the strong internal

pressure as an argument to bargain harder internationally. As noted by Putnam, “the


55

larger the perceived win-set of a negotiator, the more he can be ‘pushed around’ by

the other Level 1 negotiators. Conversely, a small domestic win-set can be a

bargaining advantage: ‘I´d like to accept your proposal, but I could never get it

accepted at home’”1.

Sitting on the international table – or the Level 1 – the Brazilian negotiators

(working mostly through COSBAN) were challenged to deal with the basic

complexity of this kind of negotiations. As noted by Putnam, “moves that are rational

for a player at one board (such as raising energy prices, conceding territory, or

limiting auto imports) may be impolitic for that same player at the other board”2. In

this context, Brazilians should defend the national automakers but, at the same time,

minimize the adverse consequences for the bilateral relations with China. Here is

important to highlight that China is the largest trade partner of Brazil, therefore,

creating bilateral problems could be very costly, since a great part of Brazilian

commodities are exported this country.

However, Brazilian negotiators’ and their small win-set contributed to push

China towards the idea to force their companies to produce in Brazil, which in fact

happened. Their view is that Brazil is already self-sufficient in the automotive field;

therefore removing barriers to Chinese cars could be very costly to their coalitions

with domestic constituents.

This smaller win-set reveals that among the actors related to automotive sector in

Brazil China is perceived as a non-complementary nation, opposing the main

assumptions of the Chinese literature on Latin America, in which China and South

American countries are seen as complementary nations. Moreover, the problem here

is that China’s decision to invest in this sector probably reinforces the negative image

they have among Brazilians, since China is seen as a threat for some of important

Brazilian domestic actors (see chart 12). There is not enough data to understand to

which extent the Chinese attempts to export cars to Brazil reinforce the negative

image of China in this country. However, as presented before, some scholars suggest

that these international factors tend to reverberate negatively if its source is seen as an

adversary by domestic constituents.

1 Robert Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games”, International

Organization, Vol.42, No.3, Summer,1988, p.440. 2 Robert Putnam, “Diplomacy and Domestic Politics: The Logic of Two-Level Games”, International

Organization, Vol.42, No.3, Summer,1988, p.434.


56

CHAPTER 5 Conclusion and Policy Recommendations

57


5.1 Conclusion

In this study I discuss the academic literature on China and Latin America

relations, especially those papers published after 2000, when both regions intensified

their connections. I, then, divide the scholars in two groups (optimists and pessimists),

reflecting their opposite views of Sino-Latin American relations. The Chinese

government and scholars share the optimistic view, in which the improvement of

China’s ties with Latin American countries is complementary and benefits all parties.

However, the perception of Chinese influence among nationals from different

countries in Latin America is different in each country, suggesting that the perception

of complementarity is not equally shared throughout the region. Data from South

America showed that Chile had the less negative view of China while Brazil held the

most negative view. I, then, introduced my first research question: Why Chile and

Brazil hold different views concerning the influence of China in the region and how

trade affects it?

I answered this question in the Chapter 3, where I analyzed the history of Sino-

Chilean and Sino-Brazilian relations. My argument is that Sino-Chilean relations have

always been focused on trade, therefore, the economic penetration of China in Chile’s

economy has been perceived as complementary to Chilean interests. On the other

hand, Sino-Brazilian relations have been traditionally focused on other strategic areas,

such as nuclear and space cooperation, multilateral diplomacy and others. Even

though trade is part of Sino-Brazilian relations, Brazil is an industrial country and the

economic penetration of China has been perceived as non-complementary by several

industrial sectors.

In the next chapters I analyzed how the economic penetration of China has been

observed in Chile and Brazil. Moreover, how this Chinese approach that ignores

regional differences in Latin America affected the Chinese outcomes in the

automotive sectors of Chile and Brazil.

This issue was discussed in the Chapter 4, where I presented the historical

development of the Chilean and Brazilian automotive sectors. In Chile, governmental

policies gradually weakened national producers throughout the last decades,

welcoming imports from different countries, including China. Nowadays Chile is the


58

most important market for Chinese vehicles in Latin America. Brazil decided for an

opposite strategy in which the automotive sector was selected as one of the most

important pillars of its economy. Nowadays, national producers represent 20% of

Brazil’s industrial GDP and have a strong lobbying power. In this context, the import

of Chinese cars in Brazil was strongly opposed by important domestic actors, who

pressured the government to approve protectionist measures and close the market to

Chinese cars.

This research, as all the academic works, has its limitations. Given the fact that

China is dealing with several sectors and countries in Latin America, we cannot

assure that the same patterns are observed in other cases. What we can argue is that

the Chinese assumption of complementarity with Latin America is invalid for some

cases. The automotive trade in Chile and Brazil is only one example of how the

perception of complementarity can differ in the region.

Moreover, we cannot assume that automotive trade is the only variable affecting

the negative views of China in the region. There are, surely, other aspects influencing

these perceptions. Nevertheless, I showed how the automotive trade with China is

perceived by important interest groups (not only automakers, but also labor unions

representing common citizens in Brazil), who perceive themselves negatively affected

by China.

Another limitation of this analysis concerns the complexities of the Chinese

domestic table (Level 2), which were not considered in this work due to the lack of

time and space. In this sense, would be interesting for further researches to analyze

the relations between the Chinese government and the automotive companies, as well

as the differences between private and state owned in their relations and pressures

towards the CCP.

Despite the limitations, the cases of automotive trade in Chile and Brazil are

important to show opposite perceptions of China in a region considered by the

Chinese literature on Latin America as very complementary. In fact, the Chinese

approach is neither right nor wrong, but cannot be applied to every sector and country

in Latin America. The key to understand and succeed on bilateral relations with the

region is to focus on its diversity, considering the particularities and different models

of development of each country.

The automotive trade, for example, was perceived as complementary to Chilean

interests, but not to Brazilian. The focus on diversity allows China to understand the


59

perception of complementarity in each country and, consequently, reduce frictions

between governments. The result is the improvement in bilateral relations and, more

important for China, the reinforcement of its positive image in the region. There are

definitely a number of fields in which China could cooperate with Latin American

countries. China’s success depends on choosing the right ones.

5.2 Policy recommendations

As I just argued, the automotive sector is definitely not the only important

variable concerning Sino-Latin American relations. However, I believe this field

exemplifies very clearly the diversity of perceptions regarding the Chinese presence in

each country of this region. As noted by Lin and Johnson, the diversity of Latin

America “requires China to treat these countries differently and be more sensitive to

their different needs and conditions”1.

The historical evolution of industrial sectors in Chile and Brazil offer varied

opportunities and challenges to China. In the case of Chile, trade with China is seen as

complementary by large percentages of domestic constituents, what explains partially

the low levels of negative views of China in this country. Similarly to most part of

Chile’s economy, the Chinese presence on the Chilean automotive sector is likely to

increase, following the tendency since its arrival. Besides, the Chinese trade and

investment in this complementary sector collaborates to reinforce a positive image of

China in Chile.

In the case of Brazil, the Chinese presence is not seen as complementary by

several industrial sectors, including the automotive. For the majority of domestic

constituents affecting this sector, the arrival of imported Chinese vehicles in Brazil

represented a great opportunity for China to expand its sales in one of the largest

markets in the world, with few benefits for the Brazilian economy in general. Due to

its importance for the Brazilian economy and the strong lobby of the national

automotive associations, it is expected for China to continue facing problems to

export vehicles to Brazil. It is important to highlight that the protectionist measures

approved by Brazil does not affect only China, but all the countries with whom Brazil

1 Zhimin Lin and Gregg B. Johnson, “Sino-Latin American Relations: Chinese Views of Latin America”, Paper

prepared for the Annual Meeting and Exhibition of the American Political Science Association held August 28-31, 2014 in Washington, DC, Valparaiso University, p.19.


60

does not have trade agreements in this field. In this sense, the Chinese exports in this

non-complementary sector collaborate to reinforce a negative image of China in

Brazil.

China is aware that its success on foreign affairs depends heavily on their

international public opinion. According to Zhao, “a country with good relations

enjoys a higher level of trust among them. It also has greater influence in the world,

and pays lower ‘costs’ for international operations conducted in its national interests”.

He also notes that the public opinion on China in the West recognizes its economic

development, however, “the news items selected and the tone of commentary are

often highly negative”1.

To avoid conflict and mutual public complaints2, both sides should focus their

partnerships on sectors in which the domestic win-set (or the perception of

complementarity) is higher. Otherwise, bilateral relations will not advance as

expected for comprehensive strategic partners, causing serious damages for China’s

public opinion in the region, especially in Brazil.

Even though Brazil was the first country to sign a strategic partnership with

China, in several aspects this relation is still “in dormancy”. As Jiang Shixue noted,

cooperation in some fields mentioned in the Chinese policy paper for Latin America

are still on their early stages and “opportunities for cooperation in other fields remain

unexplored”3. It is extremely important for both sides to use permanent bilateral

diplomatic channels existent between China and Brazil (especially COSBAN) in order

to understand better each other’s expectations and perceptions of complementarity.

Recently, the new Brazilian foreign minister Mauro Viana selected China as a

destination for his first international trip, which has a strong symbolic meaning. In his

speech, he expressed that the current challenges of Brazil “are connected mostly to the

investment in education, infrastructure, science, technology and innovation”, areas in 1 Zhao Qizheng, “How China Communicates – Public Diplomacy in a Global Age”, Foreign Languages Press, Beijing,

2012, p.43. 2 As said before, recently the Brazilian Vice-President asked China to control exports to Brazil. On the other hand,

Wang Shouwen, Assistant Minister of Commerce of China criticized the high Brazilian taxes to produce in its territory. See more in Flavia Loreque, “Temer Critica Aumento Maciço e Indiscriminado de Produtos Chineses”, [Temer Criticizes the Massive and Indiscriminated Increase in Chinese Products], Folha de São Paulo, Feb 13th, 2012. Available in http://www1.folha.uol.com.br/poder/2012/02/1048031-temer-critica-aumento-macico-e-indiscriminado-de-produtos-chineses.shtml. [Accessed on Jan 20th, 2015] and Jamil Chade, “ China Critica Protecionismo Brasileiro”, [China Criticizes Brazilian Protectionism], O Estado de São Paulo, Oct 16

th, 2014.

Available in http://economia.estadao.com.br/noticias/geral,china-critica-protecionismo-brasileiro-imp-,1577604. [Accessed on Jan 20th, 2015]. 3 Jiang Shixue, “China's first Latin American policy paper is a road map for future relations”, China Internet

Information Center. Available in http://www.china.org.cn/opinion/2010-11/05/content_21281787.htm. [Accessed on Jan 22th, 2015].


61

which China is seen as a potential partner1. If China shares this perception,

partnerships in these complementary fields (according to the Brazilian perception)

could not only improve Sino-Brazilian relations, but also reverberate on Brazil’s

public opinion regarding China. It is important to highlight that the boom on bilateral

trade did not significantly minimize the negative views of China in the last years.

According to the GlobeScan/PIPA survey, in 2004 the negative views of China in

Brazil represented 32%. In 2012, they reduced only to 31%.

More than just strengthen trade and bilateral relations, Brazil and China need to

share their perceptions of complementarity and focus this partnership in fields that are

in fact mutually beneficial. Through dialogue and previous consults, China and Brazil

can understand better each other’s perceptions of complementarity, in order to focus

this strategic partnership in sectors with large Chinese and Brazilian win-sets.

1 Federative Republic of Brazil, “Discurso do Ministro Mauro Vieira na I Reunião do Foro CELAC-

China” [Minister Mauro Vieira’s Speech on the First Meeting of Celac-China Forum]. Available in http://www.itamaraty.gov.br/index.php?option=com_content&view=article&id=6522:discurso-do-ministro-mauro-vieira-na-i-reuniao-do-foro-celac-china&catid=42:notas&Itemid=280&lang=pt-br. [Accessed on Jan 22th, 2015].

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ACKNOWLEDGEMENTS

72

ACKNOWLEDGEMENTS

Coming from the field of Communication, my contact with International

Relations was initially hard. First, I am grateful for all the professors who shared their

knowledge about theories and concepts, in order to break the possible problems

derived from my different educational background.

Second, after two years in China, I am sure that, despite the standardization

brought by the process of globalization, the world is definitely much more diverse

than we think. The experience to share and learn about so many parallel realities we

have in the world, from America to Asia, from Europe to Africa was definitely

insightful.

I highlight the valuable ideas and suggestions from Prof. Song Ou, who

collaborated to minimize the huge differences between the Brazilian and Chinese

systems of writing and organizing the knowledge.

Third, I am very grateful to Prof. Syed Hasanat for his constant efforts to

translate theoretical concepts into the reality we live in, changing the perspective we

had of International Relations. Instead of discussing the past, we moved to the

discussion of the current challenges of this global era, which instigated our minds in

order to look for solutions.

Fourth, I consider myself lucky for the chance to live in the dormitory of foreign

students in Jilin University, which I consider my practical laboratory of International

Relations. It was the place where I had the chance to hold fantastic conversations with

my classmates and understand a little about their own different views of the world.

If for some people International Relations are mostly the history of conflicts,

during these two years, the experience of living in an international community proved

that it is 100% possible to have a more peaceful world. Dialogue, communication and

respect are the keys for that.

In 1964, Bob Dylan asked us to stop criticizing what we can’t understand,

however, the song still makes sense. If we live in a global era, full of exchanges and

contacts, we need citizens who are able to understand the differences and minimize

the possible conflicts derived from these interactions.

Thank you Jilin University for offering me this environment, providing the

necessary resources to understand the differences and become a professional adapted

to the conditions the world requires.

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