February 1st, 2012
12:47 PM ET

China's export to Latin America: Corruption

Editor's Note: Ariel C. Armony, a political scientist, is a professor of international studies and director of the Center for Latin American Studies at the University of Miami in Florida. For more, check out the Winter 2012 edition of Americas Quarterly on China’s Global Rise: Implications for the Americas. 

By Ariel C. Armony - Special to CNN

Shoes. Toys. Clothing. China has inundated Latin American markets with cheap goods. This flooding has jolted local producers and generated demands for government measures to protect domestic industries. But there is one Chinese export that has not received enough attention among policymakers, media analysts and public opinion: Corruption.

Though China and Latin America have different values and attitudes, both have traditionally lacked transparency in government. They operate according to informal business dealings which, in turn, undermine or further weaken the rule of law. Corrupt practices exacerbate distortions in public administration, impair sustainable development, erode a nation’s legal culture, and worsen inequality and poverty.

Given China’s increasing business operations and growing investment in Latin America, corruption at home is likely to have a significant impact on societies at the receiving end of China’s move to invest and trade with the outside world. The relationship between China and Latin America is an “encounter of informalities.” Traditional business practices that operate “above the law” and closed-door deal-making will find a welcome environment in Latin America. The consequences of this encounter can damage the interests of taxpayers, undermine safety and environmental standards, threaten human rights, and erode the capacity of the state to enforce legal rules.

In a recent interview with Fareed Zakaria, President Obama talked about China’s need to “play by the same rules as everybody else.” This is important, but the drama is not only played in the international stage. It is manifest in the varied dimensions of China’s engagement in the developing world, from large-scale projects related to public-sector contracts, to small-scale trade and outright criminal networks engaged in various illegal activities.

Media outlets have exposed many examples of corruption involving Chinese interests within mining ventures in Peru, petroleum refineries in Costa Rica, and hydroelectric projects in Ecuador. Transnational networks that can be traced back to China are involved in smuggling, human trafficking, and “protection” rackets in several countries of the region.

As China deepens its presence in Latin America, it is likely that Chinese investors (including state-owned enterprises) that peddle corrupt practices and undue influence will continue to find fertile ground and reinforce the weak institutional capacity of many Latin American countries.

There is some room for optimism though. A few Chinese firms themselves are starting to demand clearer rules of the game from Latin American governments. Several Chinese companies are gradually adjusting to international norms. China’s congress recently amended the country’s penal code, incorporating an extraterritorial amendment that introduces specific anti-corruption language that defines the act of bribing foreign government officials as a criminal offense.

Nevertheless, without active monitoring by the international community and local civil societies in these countries, the dark pull of corruption on China–Latin America economic and political relations will remain strong. Ultimately, the real risk from China may not be manufactured exports but the export of corruption.

The views expressed in this article are solely those of Ariel C. Armony.

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Topics: China • Latin America

soundoff (31 Responses)
  1. Charlette

    When China fully opens its doors to the world...China is the future. Take focus to China.

    February 1, 2012 at 1:05 pm |
    • MHouston

      Beware of China...just as you would beware of a sick, rabid dog...

      February 3, 2012 at 12:05 pm |
      • R.R.Martin

        Hey,dude.U know you are a Nationalist.Why say like that?Jus take focus to China.Did chinese suck YOUR dicK?

        February 5, 2012 at 7:11 am |
  2. JAL

    Fundamentally, most large-scale business practices are fraudulent, by their very nature. The only saving grace is an up-front and honest approach, with survival at the helm. Poverty is the enemy here, not people. Identify ALL proper stakeholders from the start, or just expect failure. I dont mind working for free, but keep me informed and dont think that any groud-breaking event has transpired.

    February 1, 2012 at 1:09 pm |
  3. Nyumah

    I believe , injustice anywhere is Injustice everywhere . The same assistance that Washington gave to Libyan
    Opposition same should be applied to Syria.
    New York

    February 1, 2012 at 1:10 pm |
  4. George Patton

    I see that this Ariel C. Armony fails to mention all the corruption brought to Latin America by the United States itself. Chile and what happened there on Sept. 11,1973 is a shining example of this. This was followed by the horrific dictatorship of Augusto Pinochet and his henchmen, not to mention all the other legitimate governments on Latin American by the C.I.A. Before we Americans start to throw stones at others, we need to take a look at our own track record!!!

    February 1, 2012 at 2:09 pm |
    • MHouston

      "Before we Americans start..."?? You're no American, Patton. You're a Chinese schill of the Maersk sort. Only difference between you and him is you haven't learned his foulmouthed nastiness yet.

      February 3, 2012 at 4:27 am |
  5. That'snotTrue={

    *Sigh* Another article of the American government throwing stones in glasses houses. Come up with something original! Or is that too much to ask. The US government support dictators.... that's the worse kind of corruption to another country. =.=
    You, the author are a dimwit....

    February 1, 2012 at 4:26 pm |
    • MHouston

      The author is no "dimwit" but I'm sure you, "sigh*", are not quite astute enough to realize that.

      February 3, 2012 at 8:18 pm |
      • Sowhat

        You still sound dumb =.=
        From all your post, my conclusion is that you're a troll, go play farm-ville on FB or something!!! This is for people with common sense at the very least, which you lack among other things.

        February 4, 2012 at 2:12 pm |
    • MHouston

      Common sense, Sowhatsnot??? That should have eliminated you long ago.
      Wipe your nose and and dream up another excuse to justify yourself and
      all the other Maersks that spew their Chinese blatther here....

      February 5, 2012 at 3:42 am |
      • R.R.Martin

        Are U reaing your own article? HAHAHAHAHA~ Funny......IM a Rio guy.Not Monkey.Fight fo Yourself.greaT!!!!!!

        February 5, 2012 at 7:30 am |
  6. j. von hettlingen

    The business culture in Asia, Africa and South America are quite different from our Western ethics. We condemn bribery as dishonest and corruption as criminal. We all want ourselves and others to have a fair chance and be treated equally without special preferences. Not so in many countries, where everybody does what he wants to reach his goals, with no regard for the others.

    February 1, 2012 at 5:19 pm |
    • MHouston

      True enough, hettlingen, but it's particularly true of China as a country and of Chinese as individuals.
      China is trying as fast as it can to catch up to the living standards the "West". Unfortunately for China it's too late.
      China is a catastrophe just waiting to happen (because of overpopulation). Unfortunately for the rest of the world
      the Chinese implosion is going to produce terrible results in the rest of the world, and particularly for those countries
      that may have considered China to be a benevolent friend. China is no ones "friend".

      February 3, 2012 at 4:18 am |
      • That'snotTrue:[

        *Sigh* The China implosion theory had been in the western media for the last what, 10 years? It never happens, the west is just hoping for it to fail because China is one of few countries that doesn't abide by "western ideals." As for over population...I think India have the bigger problem with this one, no regulations, the largest population in 2020 or something won't be China for sure...
        I can see that you're attempting to make points, but please realize that both the western and eastern media have their own bias, the China is going to fail thing...well just look at how many articles that they got on CNN, and is it happening, yes in narrow minded people's minds, but not in real life. Please fix Uncle Sam's spending habits first, try to buy fewer wepons!

        February 3, 2012 at 3:14 pm |
  7. RedWhiteBlue

    The Chinese simply are fecklessly behind. Beijing clearly should emulate the winner – namely the efficacious and glorious practices of the world leader, with programs similar to the School of the Americas (what is that thing called nowadays?) that brought many decades and untold (or is it untellable) amounts of prosperity and stability and fairness to Latin America!!

    Bribery is dishonest? Doh!! America has it all worked out – make it legal of course. Today it is called "campaign contributions", and can be UNLIMITED in size, thanks to Citizens United.

    It truly shocks and awes how much more advanced America is in this area.

    February 1, 2012 at 6:18 pm |
  8. Maersk

    And America's exports to the world are kwok zucking kwok zuckers such as Ariel C. Armony to zuck kwoks for a living and at the same time badmouth China.

    February 2, 2012 at 2:24 am |
    • MHouston

      Typical reaction of a Chinese. Condemn the messenger if he brings unflattering news.
      Clean up your dirty mouth, fool...

      February 3, 2012 at 4:34 am |
      • Maersk

        Typical American kowk zucking kwok zucker who has zucked his uncle kwok and swalowed a mouthful. The only problem is that he doesn't know he is full of it.

        February 3, 2012 at 6:38 am |
    • MHouston

      Your nasty response just proves my point...SMAERSKstink...

      February 3, 2012 at 12:08 pm |
  9. Benedict

    Chinese business men have found in their dealings with foreign companies that a little infusion of cash into the hands of the men at the helm goes a long way in smoothening the way for business to take place. The corruption isn't perculiar to these regions as we know that Africa as well as areas in the Middle East amd Eastern Europe have a tendency to look the other way when the hand has been grease properly. Until governments strenghten the financial watchdogs, these under-the-table deailngs will continue to undermine honesty economic transactions.

    February 2, 2012 at 4:00 am |
  10. pmcdonald

    The USA has developing country levels of inequality and the largest level of poverty amongst rich nations. If we take Mexico, its close neighbour It has exported violence and death through the war on drugs and extreme inequality and poverty through the export of laissez faire economics that maintain an elite extractive minority.

    This unresearched opinion piece appears to be the work of an academic. It beggars belief that standards are so low in US Universities. However the conclusion may at least be a hypothesis....

    If China and Latin America work by an informal set of rules and can squeeze out the USA, it provides a mechanism for dominating the USA in the western hemisphere. No doubt China will be able to do it within Asia too so the USA will get marginalised. Even in Europe. European countries have a much more relational perspective on business than the USA which is short-term, transactional and self interests. Therefore we see why China will rise......if the professor is right.

    February 2, 2012 at 9:29 am |
    • Christina

      I support buying Mexico's honest products...Tequila for example.....lots of Tequila!

      February 2, 2012 at 6:38 pm |
  11. Alex

    Yesterday there was a similar news in foxnews. The goverments is already introducing the agenda to the american and people around the world........Latin america is run by dictators that dont respect human rights, no democracy bla bla bla. Whats the agenda? Get into latina america's untapped resources (OIL GAS STEEL ALUMINIUM, ETC). Middle east is an unstable region, russia hates the US, China already took africa and they are starting to deal with latin america. Dont be surprise if this year the CIA introduces a coup to latin american goverments. Why do we think that we own other peoples resources and sovereignty? They are going to fail peopple in latin america hates the US and love their democratically elected leaders. Watch what happens this year and the next in Venezuela.. the biggest oil, gas, aluminium and steel reserves in the world.

    February 2, 2012 at 9:57 am |
  12. jo_smith456

    Certainly, China (including Russia and India) has learned from the US's foreign politco-economic policymechanisms over the last decades!!!!

    February 2, 2012 at 11:14 am |
  13. Paul

    She was the l0ve 0f my life. Y0ung an gud l00king. N0w she lives wit a white b0i./bum. Why L0RD/im crying

    February 3, 2012 at 6:51 am |
  14. Paul

    Im beside myself wit disbeleaf. I get sik thinking 0f my beutiful latina wit an 0lder white dude thats a real life bum/drunk. Idk why it happend. She w0nt speak t0 me at all. Help me L0RD

    February 3, 2012 at 6:58 am |
  15. Paul

    I wana die wit 0ut her.

    February 3, 2012 at 7:00 am |
  16. Michael

    No comments about corruption but China's exports could just go through the roof. http://www.globalsources.com/gsol/I/Electronic-products/a/9000000121999.htm

    March 22, 2012 at 5:45 am |

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