Ecuador-China Relations: the Growing Effect of Chinese Investment on Ecuadorian Domestic Politics, 2007–2016

Abstract

Two burning academic and policy questions in the study of Latin American and Caribbean- China ties relate to the effects of China’s rising trade, investment and financial presence on Latin American and Caribbean (LAC) country foreign and domestic policies. In this article, we study the case of Ecuador, focusing on Rafael Correa’s administration (2007–2016), as a way to delve into these issues. As conventional wisdom about the power of economics suggests, we find that Ecuador’s foreign and domestic policies have inclined towards China and Chinese companies. However, this was not solely because of China’s economic allure. Ecuador’s stance also has something to do with the fact that better ties with China and receptivity to Chinese foreign direct investment (FDI) flows fit the government’s international economic and political agenda. Moreover, they also conformed to the social agenda of Ecuadorian leaders, which made it even more logical to pursue warm ties with Beijing and create an open door for Chinese outward FDI (OFDI). As for Correa specifically, his regime sought to bring in Chinese OFDI as a means to promote a new growth model as well as his development philosophy Buen Vivir.