China’s Presence in Chile’s Energy Sector: Risks and Challenges

Photo: Unsplash.

China has significantly increased its influence in Chile, particularly in the energy sector, where it controls nearly two-thirds of the infrastructure. This dominance, facilitated by strategic acquisitions and supported by the Belt and Road Initiative, raises concerns about national security and Chile’s growing economic dependence on Beijing.

Notable acquisitions include the purchase of Compañía General de Electricidad (CGE) by China State Grid in 2020, the acquisition of Pacific Hydro in 2016, and a partial stake in Transelec in 2018. These investments allow China to strategically position itself to leverage key Chilean resources, such as copper and lithium, which are essential to its global economic agenda.

China’s influence is exercised through “sharp power” tactics, including advantageous trade negotiations, persuasion of political elites, and economic pressure. These practices, combined with the lack of antitrust legislation in Chile, have facilitated China’s expansion into critical sectors, posing risks to the country’s sovereignty.

Chile also faces transparency challenges, as many Chinese investments are shielded by confidentiality clauses and opaque corporate structures, making it difficult to trace the ultimate beneficiaries. Experts suggest that Chile adopt measures such as creating an investment control committee, diversifying the energy sector, strengthening critical infrastructure with support from strategic partners like the United States, and establishing regulations to limit monopolies in key sectors. Without these actions, China will continue to consolidate its economic and political influence in the country.

Source:

https://dialogo-americas.com/es/articles/la-preocupante-influencia-de-china-en-el-sector-energetico-de-chile – Diálogo Américas

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