Chinese investors have snapped up
mines across Latin America. How
do they compare in their respect for
labor rights and the environment?
China’s huge appetite for energy and min- erals to fuel its ex- panding economy has strained inter- national markets for oil, natural gas,
iron ore, coal, copper, nickel, aluminum, and other resources. To satisfy
China’s hunger for raw materials,
Chinese companies, backed by the
government, have been acquiring
equity stakes in natural resource companies, extending loans to mining
and petroleum investors, and writing long-term procurement contracts
for oil and minerals in Africa, Latin
America, Australia, Canada, and other
resource-rich regions.
In fact, more than half of Chinese
foreign direct investment (FDI) in natural resources is in Latin America. It
is concentrated in 34 major projects
that stretch from Venezuela and Ecuador through Brazil, Bolivia and Peru
to Argentina and Chile. Since China
launched its “going out” strategy,
encouraging companies to become
more competitive, total Chinese FDI
in Latin America has increased nearly
sevenfold, from $226 million in 2003
to $1.6 billion in 2009.1
As Chinese FDI in Latin America
has grown, so have concerns about
the practices of Chinese companies.
Egregious violations of international labor and environmental standards, particularly in the mining
sector, have been uncovered in Chi-nese-led investments in the Democratic Republic of the Congo, Angola
and Zambia, to name a few examples.
And persistent allegations of corruption and bribery offer an additional
cautionary note for Latin American
policymakers. “China has difficulty
regulating what its companies do
abroad,” writes Cynthia Sanborn of
Peru’s Universidad del Pacífico, who
has conducted an extensive study of
Chinese investment in Latin Amer-
