Contentious Acquisitions: Explaining Chinese Mining Acquisitions in South America

• In Event: China and the Emerging Economies: Sectoral Analyses & Geopolitics

Abstract

China’s demand for natural resources has led Chinese firms abroad to acquire not only natural resources, but the mines that produce those resources. Meanwhile, extractive industries have myriad implications for host communities; they can be a boon for the economy and local employment, but they may also destroy ecosystems, pollute the environment, or force communities to relocate. In South America, China’s forays into extractive industries have raised the specter of economic dependence. Thus, potential host communities often resist Chinese firms’ efforts at mine acquisition. Under what conditions are Chinese firms successful at acquiring mines? I examine how national political and economic context in the host country, societal factors, and firm-level strategies impact the success of potential acquisitions. I assess the role of these factors through case studies of attempted mine acquisitions in Chile and Peru, including two cases of successful acquisitions and two cases of failures. I find that host-country institutions, community organizing capacity, and firm-level strategies impact the success of attempts to acquire mines. By examining these interactions, this project contributes to our understanding of the impact of Chinese trade in Latin America for politics, society, and the economy.

Author

• Kerry Ratigan, Amherst College