Saturday, 21 May 2016

Dr. R. Evan Ellis: Chinese Engagement with Bolivia

In October 2015, Bolivia’s president, Evo Morales, announced an unprecedented expansion of nancial support by and economic engagement with the People’s Republic of China (PRC). China’s Export–Import Bank had agreed to provide $7.5 billion in loans to fund 11 “strategic projects” contemplated in Bolivia’s 2016–2020 National Economic and Social Development Plan, with the work to be done by Chinese companies. In the process, Bolivia’s national debt would more than double to $13 billion.1

The announcement was the culmination of a growing relationship between China and Bolivia which has begun to bear fruit, especially in purchases of Chinese products and Chinese construc- tion companies work for the Bolivian state. The China–Bolivia relationship has not always deve- loped so rapidly. From the 2003 con ict over the export of Bolivian gas, until the resolution of Bolivia’s constitutional crisis in January 2009, the lack of stability in the country both impeded the Bolivian government and gave pause to its Chinese suitor.2

The future of Bolivia’s relationship with the PRC is of strategic importance to Latin America. The country lies at the geographic center of the South American continent, forming a bridge between Paci c-facing nations such as Peru and Chile and Brazil to the East. It also occupies a strategic position politically. The collapse of Venezuela, Cuba’s rapprochement with the United States, and the election of the right-of-center government of Mauricio Macri in Argentina has increased Bolivia’s importance as one of the region’s few remaining proponents of populist so- cialism. Because of this, its behavior will impact the effectiveness of multilateral bodies such as the Organization of American States (OAS), Unión de Naciones Suramericanas (UNASUR) and the Community of Latin American and Caribbean States (CELAC), where Bolivia’s President Morales is competing with Honduran president, Juan Orlando Hernandez, for the rotating pre- sidency in 2017.3 Indeed, some in Bolivia believe that the nation’s time may soon come for a temporary seat on the United Nations Security Council.

Almost nothing of an academic character has been published on the relationship between the PRC and Bolivia. Indeed, Bolivia is regularly omitted from even those compiled volumes on China–Latin America relations containing country studies chapters.4 Two of the few examples of China–Latin America academic works which include a dedicated analysis of the relationship are Pablo Poveda’s “Bolivia and China: Indirect Relations in a Global Market,” and a dedicated sec- tion of the 2009 work China in Latin America: The What’s and Wherefores.5 Both works, while useful, are increasingly dated, in light of the rapid expansion of Chinese activities in the country.

The present article seeks to address that void. It examines the evolving Bolivia–China relation- ship in ten areas:
• political and institutional interactions;
• the Chinese community in Bolivia;
• the trade relationship;
• the intellectual infrastructure in Bolivia for engaging with the PRC; • Chinese projects and proposals in Bolivia’s petroleum sector; and

• related activities inmining, construction,
manufacturing, telecommunications and space, and military cooperation.
The work concludes by examining the implications of the observed pattern of engagement with Bolivia and the region.

Political and Institutional Engagement
For much of the 20th Century, China’s most common bond with Bolivia was shared underde- velopment and chaotic, insular politics. From 1964 until 1982, Bolivia was ruled by a series of conservative military governments which chose not to recognize the communist regime in the PRC. The Chinese, for their part, reciprocated with subversive activities such as broadcasting revolutionary messages in the indigenous language Quechua to the residents of Bolivia’s Andean highlands. Bolivia’s transition to civilian rule opened a door, already chosen by many of its South American neighbors, to establish diplomatic relations with the PRC.6 On 9 July 1985, days before democratic elections in Bolivia, the embattled outgoing government of Hernán Siles Zuazo di- plomatically recognized the PRC. Despite this important step, during the 20 years that followed, no Chinese president visited Bolivia, and Bolivian presidents only traveled to the PRC on two occasions: once, by Pres. Jaime Paz Zamora in 1992, and a trip by Pres. Gonzalo Sanchez de Lo- zada in March 1997.
The election of Evo Morales in December 2005 created a strategic opening for China’s rela- tionship with Bolivia, albeit one which would take time. Even before assuming of ce, Morales demonstrated an interest in building a closer relationship with China, traveling to the PRC in January 2006, where he publicly declared during a meeting with members of China’s politburo that he was a “great admirer” of the PRC’s former revolutionary leader Mao Zedong.7 Since that visit, Morales has returned to China twice: in August 2011, and in December 2013. The latest trip was designed to allow Morales to be present when the PRC launched the satellite that it had built for Bolivia, the Tupac Katari.8

Beyond the previously mentioned interactions, Morales also traveled to Brazil in July 2014 to meet with Chinese Pres. Xi Jinping at the rst summit held between the PRC and CELAC in Fortaleza, a gesture made by only a limited number of the CELAC heads of state. Overall, during the decade of rule by Evo Morales beginning in January 2006, certain areas of the PRC–Bolivia relationship have ourished. These include the import of Chinese products by Bolivian busines- ses; the Chinese construction of transportation, mining, energy, communications, space, and other infrastructure (with loans from Chinese banks); and, to a lesser degree, military coopera- tion. Under Morales, the credits provided for such work by PRC-based banks such as China Ex- port–Import Bank have reached $1 billion, and could expand to $10 billion in the coming years led by the Bolivian government’s exercise of the previously mentioned $7.5 billion line of credit.

The Bolivian government has also deepened its ties to the PRC at an institutional level through people-to-people contacts at all levels of government. Such interactions include not only of cial visits but also the training of the key scientists and technicians for Bolivia’s national space agency (ABE), created to support the previously mentioned Tupac Katari satellite built and launched by the PRC for Bolivia.9 They also include the trip to China by four justices and 16 lower-level functionaries from Bolivia’s constitutional court in 2015, widely criticized for leaving the body without a quorum when important cases needed to be addressed.10

The Chinese community in Bolivia
The Chinese community in Bolivia is relatively small, with an estimated 7,000 persons of Chi- nese descent within a Bolivian population of 10.8 million.11 The greatest concentration of ethnic Chinese in Bolivia is found in the city of Santa Cruz, where the Chinese government maintains a consulate bigger than the one maintained by the US government. A signi cant number of Chi- nese also live in Cochabamba, which has a modest Chinatown district, and where PRC-based companies are engaged in some infrastructure projects, as detailed later in this work. Small num- bers of Chinese are also found in the capital, La Paz, as well as Bolivia’s other principal cities.12

Bolivia’s role as a transit country for the traf cking of immigrants was highlighted by a public scandal in 2007 involving the illegal sale of Bolivian passports to Chinese immigrants by the im- migration of ces in Santa Cruz and Beni.13 As a product of such human traf cking, as well as the importation of workers by Chinese companies for construction projects, the Chinese community in the country is believed to be growing.14

The China–Bolivia Trade Relationship
Re ecting Bolivia’s position as a land-locked country, PRC trade with the country has been limited, characterized by a signi cant surplus in China’s favor. According to the International Monetary Fund, in 2014, the PRC exported approximately $1.82 billion in goods to Bolivia and imported $434 million from it.15 China’s trade with Bolivia has expanded by a factor of six from the $75.3 million in bilateral trade between the two countries in 2000.16 Indeed, in 2014, China surpassed Brazil as the number one source of Bolivia’s imports.17 While such growth seems im-pressive, China’s trade with Latin America and the Caribbean as a whole has expanded 24-fold during the same period.
Bolivia imports $4.2 in goods from China for every dollar of goods exported, compared to a balance of trade ratio of 2:1 for the region as a whole.18 Such a poor trade balance vis-à-vis China is particularly notable given that Bolivia is rich in the petroleum, mining, and agricultural resou- rces that China has most sought from the region traditionally.

Bolivia’s exports to the PRC are dominated by a relatively limited range of primary products. In 2014 its principal exports to the country were zinc (which accounted for 27.5 percent of ex- ports), silver (24.5 percent of exports), tin (18.4 percent), copper (9 percent) and lead (5.4 percent).19 The country also exported some agricultural products to China, including quinoa, soybeans and wine.20
By contrast to the composition of its exports to the PRC, Bolivia imports a broad range of goods from it. At the low end, half of all Bolivian clothing imports come from the PRC.21 Beyond such goods, Bolivia’s principal imports from the PRC in 2014 by dollar value were helicopters (3.3 percent), motorcycles and scooters (2.4 percent), sugar industry equipment (2.4 percent), drilling equipment (2.4 percent), and cellphones and other wireless communication devices (1.9 percent).22
As in other parts of the region, the PRC is selling multiple brands of cars to Bolivia, generally imported by local dealers. The Chinese car brand JAC has been sold in Bolivia since the 1990s.23 The Bolivian dealer Autokorp currently represents the Chinese brand “Great Wall,”24 while Chery is imported and sold by SMX Automotores, and BYD by the Bolivian retailer Crown.

In addition to retail sales, the Bolivian national, departmental, and local governments are also important purchasers of Chinese goods. In 2015, the municipality of La Paz bought 80 cross- country buses from the Chinese rm King Long, while in October 2014, the national govern- ment spent $35 million in Chinese credit for 1,500 security cameras.25 In October 2015, the PRC provided a $3.1 million interest-free loan for Chinese scanning equipment for the Bolivian cus- toms service.26 More infamously, the Bolivian government purchased ve barges from a Chinese shipbuilder, but a dispute over the contract became a protracted legal battle until the Bolivian go- vernment nally agreed to pay for the barges plus a penalty for their storage during the dispute.27

The Bolivia–PRC intellectual infrastructure
By comparison to other Latin American countries, the intellectual infrastructure supporting PRC–Bolivia commercial interactions, such as China-focused university programs, business cou- ncils, and government organizations in Bolivia, is limited, yet growing. Of the 36 Confucius Ins- titutes in the region for the study of Chinese language and culture, as of February 2016, Bolivia had only one, which opened in 2011 in San Simon University in Cochabamba.28

To expand and diversify the nation’s exports, including those with the PRC, Bolivia has a small organization, “Promote Bolivia” (formerly “CEPROBOL”). There is also an initiative funded by the European Union “Programa de Apoyo a la Promocion del Crecimiento y la Diversi cacion de las Exportaciones (Program of Support for the Promotion of the Growth and Diversi cation of Exports, or “PROEX”). Neither has signi cant activities focused on China, and the resources of both are limited re ecting the emphasis placed by the Morales government on using national production to supply the domestic market.29 The principal resources to help Bolivian businesses to make contacts in the PRC are found in the private sector, including the Bolivian Institute for Foreign Commerce (IBCE), the National Chamber of Industries, the Chamber of Industries of La Paz, and the Chamber of Exporters of Santa Cruz (CADEX). The China-focused resources of these groups are modest as well.

Despite such limitations, of cials and businesspeople from Bolivia and the PRC are gradually learning how to work with each other. Bolivian contacts with Chinese vendors are also supported
by activities such as the annual Santa Cruz-based trade fair Expocruz where PRC-based companies have a special area.30 Bolivian businesspeople also make exploratory trips to the PRC, conducted by organizations such as IBCE, often focused on major vendor events such as the biennial Can- ton Trade Fair. As an indicator of the expansion of direct ties between Bolivian and Chinese bu- sinesses, a greater portion of Bolivian importers now buys their products directly from the PRC, rather than through the more accessible yet more expensive ZOFRI free trade zone in Iquique, Chile.31 On the PRC side, awareness regarding doing business in Bolivia is similarly expanding with the growing presence of Chinese companies in the country and informal networks of Chi- nese businesses in the country to help each other to function there.32

Oil and Gas
Chinese oil companies have long shown interest in Bolivia’s petroleum sector, but to date have realized few signi cant projects there beyond equipment sales and work done under contract. In the early 2000s, two minor Chinese petroleum companies, Hunanji and Shengli Oil held mee- tings in Bolivia to discuss possible investments in the sector, but nothing concrete materialized from such discussions. In 2012, Chinese company Eastern Petroleum and Gas similarly had pre- liminary discussions with Bolivia’s national petroleum company YPFB regarding a partnership to explore for gas in Sanandita, in the Department of Tarija.33 More concretely, China National Petroleum Corporation (CNPC) signed a letter of intention to partner with YPFB, and in 2013 reaf rmed its interest in working with YPFB as a consultant or partner on small projects.34

Despite such talks, the most substantial participation by Chinese companies in the sector has been their sale of $60 million in drilling equipment to YPFB, nanced by China Export–Import Bank.35 Unfortunately, the equipment was deployed where there was little oil and it suffered breakdowns. Beyond the drilling rigs, in 2010, the Chinese rm Sinomach expressed interest in a $1 billion venture to develop a fertilizer plant in a remote area near Cochabamba, to produce ammonia and urea.36 The Bolivian government eventually selected a South Korean rm, Sam- sung, to build the project,37 but selected the Chinese companies CAMC Engineering and China Railway Road to build part of the road and rail infrastructure to the plant, as discussed in the Construction section of this work.38

By contrast to Bolivia’s neighbors Peru and Brazil, where Chinese mining companies have com- mitted to tens of billions of dollars in investments, Chinese rms in the Bolivian mining sector have principally worked under contract to build infrastructure and perform work for the Boli- vian government. The largest and most recent project in Bolivia’s mining sector awarded to a PRC-based rm was the construction of facilities for the processing of ore from the El Mutún iron deposit in the Department of Santa Cruz, by the Chinese company SinoSteel.

The project had a dif cult history, involving multiple Chinese and other foreign companies. In 2006, the Chinese rm Shandong Luneng expressed interest in the project implying that its selection could also lead to Chinese nancing and construction of $10 billion in infrastructure improvements, including a rail line to transport El Mutún ore across Bolivia and Peru to the Paci c coast near the Peruvian town of Tacna.39 However, Shandong Luneng withdrew from the bidding, and the concession was eventually awarded to the Indian rm Jindal, leading to the evaporation of discussions of Chinese funding for the rail line from Mutún to the Pacific.
Despite the setback, by 2008 the Bolivian government was in a serious dispute with Jindal over the mine and renewed semipublic discussions with the Chinese about El Mutún.40 In April 2010, the Bolivian government cashed in the bond that Jindal had provided as a security deposit, brin- ging about an extended legal dispute with Jindal.41 Within a month of the action, the Chinese proposed to loan the Bolivian government $15 billion to develop part of El Mutún, with the condi- tion that the Chinese company Chung Hsing Mining get contracts for key areas of the work.42

The Bolivian government did not take the Chinese up on that proposal, but Bolivian ministers continued to discuss ways to take El Mutún forward.43 Bolivia’s Minister of Mining and the Minis- ter of Planning and Development made trips to the PRC in October 2014, and there was a trip in May 2015 by the new Minister of Planning Rene Orellana.44

By late 2015, the Bolivian government was considering two Chinese rms to take the project forward, SinoSteel a competing rm, Hennan.45 In January 2016, the government announced a three-year, $450 million contract to SinoSteel to build and administer mining facilities on the site, to be nanced by China Export–Import Bank, despite Hennan’s lower, $419 million bid.46 While El Mutún is the most signi cant Chinese mining project in the country, it is far from the only one.

In September 2012, the Chinese company CITIC Guoan signed an agreement for a pilot pro- ject extracting lithium from the small salt ats in Coipasa, and in 2013, the Bolivian government contracted the Chinese rm Linyi Gelon New Battery Materials Company to construct a plant for producing lithium on the site.47 Also, the Chinese company CAMC Engineering was contracted to build a plant for extracting and re ning potassium chloride in the area.48 In 2014, the Chinese company Henan Yuguang was contracted by the Bolivian mining authority Comibol to build a plant in Oruro and a plant in Potosí for the re ning and casting of zinc, nanced by the Bank of China.49
Beyond mineral salts, in 2011, the Chinese rm Vicstar was awarded a $50 million contract to expand the state’s capacity for processing of tin ore at the Huanuni mine in Potosi. 50 The facility was completed in February 2015.51 Also in Potosi, the Chinese rm Subo was engaged in the ex- traction of magnesium.52 In June 2012, however, its facilities were invaded by the economically marginalized population of the nearby commune Rio Mulato, part of a broader series of local protests, centered on the larger nearby Colquiri mine.53
In Oruro, the Chinese company Jungie Mining had a contract to operate a mining facility, but ran into dif culty in November 2014, when the dike for a containment pond that it had built to contain mining residues burst, injuring 18 miners and contaminating the nearby ground.54 Nor was the incident the only dif culty for Jungie. In September 2015, the Bolivian government mi- ning jurisdiction authority (AJAM) revoked a concession which it had granted to the conglome- rate Alcira, nding that it had violated the country’s new mining laws when it had transferred the concession to Jungie in 2010.55

Perhaps the most wide-ranging activities by Chinese companies in Bolivia involve the construc- tion of infrastructure, including important projects in the transportation, electricity, and tele- communications, sectors, among others. Of 49 public works projects tracked in Bolivia in 2015, 11 had been awarded to PRC-based companies, with the majority of such work nanced by loans from Chinese banks. By the end of 2015, China had become Bolivia’s largest creditor, with a debt of $533 million owed to Chinese nancial institutions by the Bolivian government.56
As in the mining sector, virtually all Chinese construction projects in Bolivia have experienced dif culties, including labor unrest, quality problems and rework, nancial shortfalls, and other issues leading to project delays. The most signi cant of such problems, however, occurred in February 2016, when it became public that the Bolivian president, Evo Morales, had an illegiti- mate child with the manager of the Bolivian operations of the Chinese company CAMC Enginee- ring, Gabriela Zapata. The secrecy regarding the child (who died shortly after birth), and an es- timated $580 million in contracts from the state in the years which followed, generated accusations of in uence traf cking.57 Days after the matter became public; CAMC Engineering was barred from participation in further contracts with the Bolivian state.58 Aside from CAMC Engineering and the scandal surrounding it, which was unfolding as this article went to press, multiple Chi- nese companies have won important infrastructure contracts in the country. The previously men- tioned Shenzhen-based company Vicstar Construction is working on a series of road and bridge improvements in Cochabamba, plagued by delays.59 In one case, work by Vicstar on two urban bridges in the city was forced to stop when one began sinking into the earth, raising concern that it would collapse.60

In the northwest of Bolivia, the construction arm of the Chinese rm Sinopec has also been working on a major bridge on the Beni River connecting the towns of San Buenaventura and Rurrenabaque. The rm has been criticized for the dumping excavated dirt and debris into the river.61

Multiple Chinese companies have been awarded contracts for projects, generally funded by Chi- nese banks. Examples include:
  • a $253 million China Railway Road contract for a 158 kilometer El Espino–Charagua–Bo- yuibe highway in the Department of Santa Cruz,62
  • $86.9 million to Sinohydro in November 2015 for a 49-kilometer highway segment of from Padilla to El Salto,63
  • a $179 million to Nuclear Industry Nanjing Construction Group contract for a 74-kilome- ter highway segment from Santa Cruz to Cochabamba,64
  • another contract to the same company supervised by the Argentine rm Bureau Veritas for a four-lane highway from Caracollo (Oruro) to Con tal (Cochabamba),65
  • a 2013 China Water and Electric contract to upgrade a 78 kilometer stretch of highway from Trinidad to San Ignacio de Moxos,66 and
  • Sinohydro was also awarded a $144 million contract in 2014to construct a four-lane highway from Ivirgarzama to Ichilo.67

    As with the previously mentioned urban roads and bridge work, Chinese contractors have suffered multiple problems in the highway projects they have worked in Bolivia. In constructing the previously mentioned Ivirgarzama to Ichilo highway, for example, Sinohydro was plagued by ve work stoppages in 14 months, including 350 workers who went on strike January 2016 alle- ging mistreatment by Chinese supervisors, and that Sinohydro had broken promises regarding providing work uniforms and other items.68

    The most signi cant project assigned to Chinese contractors to date has been the Bolivian government’s award in 2013 of a $250 million contract for a 148 km highway and train line from Montero to Bulo. The two Chinese companies winning segments of the project were China Rai- lway Road, and CAMC Engineering, whose country manager was later discovered to have secretly had a child with President Morales. A third segment awarded to the Spanish company Yapilo.69
    Although Yapilo progressed with only minor dif culties on the segment assigned to it, both CAMC Engineering and China Railway Road ran into problems. By 2015, China Railway Road had only completed 30 percent of its assigned work, prompting the Bolivian Ministry of Public Works to revoke its contract. CAMC Engineering reportedly nished even less, and in December 2015, lost its contract as well.70
Hydroelectric Sector
The Bolivian government has also awarded projects to Chinese rms in the hydroelectric sec- tor. In October 2014, the Bolivian government awarded CAMC Engineering, a contract for three of the four parts of the hydroelectric facility Misicuni, near Cochabamba.71 CAMC Engineering, already under pressure for its work on the Montero–Bulo Bulo highway and train line, ran into cash ow problems, and in January 2016 became the target of protests for not paying its local heavy equipment operators.72 In June 2014, the Bolivian government awarded to Sinohydro a contract for the $235 million, 124 MW San Jose hydroelectric facility, also in the Department of Cochabamba, but by January 2016, the project was paralyzed by a strike.73

Arguably the largest hydroelectric project in Bolivia considered for an award to a Chinese company is the $1.3 billion, 600 MW Rositas complex on the Grande River in the Department of Santa Cruz. The project was rst proposed in 1987, one of the oldest hydroelectric projects in the country.74 In 2013, the Chinese company Hydrochina did a self-funded study of the Rositas pro- ject, seemingly positioning itself to win the work.75 In December 2015, the Bolivian government conducted an exceptionally rapid 21-day public bidding for the project, even before the nal design for the facility had been completed. The manner in which the auction was conducted, and the use of Export–Import Bank of China to provide funding, suggested that HydroChina was indeed favored for the award, although a decision had not been announced at the time this work went to press.76

Infrastructure Projects
China’s October 2015 $7.5 billion line of credit suggests that the numerous Chinese infrastruc- ture projects in Bolivia are only the beginning. Indeed, the February 2016 national referendum to change the constitution to permit the reelection of the president seems to give the Morales government even more incentives to emphasize the array of China-funded projects that will theo- retically be used to develop the country during another, anticipated, Morales presidential term.
The Morales government has advanced 11 strategic projects to be nanced by the new funds, and to be performed by Chinese companies. They include three major roads connecting central Bolivia to its northern border:
  1. A highway from Charazani to Apolo to Tumupasa to Ixiamas to Chivé to Porvenir––from the north of the department of La Paz to the Department of Pando,
  2. a highway from Trinidad to Guayaramerín, and
  3. a highway from the north of Santa Cruz to the Southwest of the Department of Beni.77
Other projects mentioned in conjunction with the new funds include a $500 million expan- sion to transform Santa Cruz’ principal airport, Viru, into a major international cargo terminal, as well as a $600 million, 500-kilometer highway from the town of Rurrenabaque to Riberalta.78
With the new funds, President Morales has also suggested that the Chinese might help cons- truct a long-contemplated trans-Bolivia railroad, from Motacusito to Puerto Busch in Santa Cruz, to export iron from El Mutún, now in the hands of the Chinese rm SinoSteel.79 Indeed, the project ties into the nation’s hope to be part of a “central” route for a bioceanic highway and rail corridor, theoretically spanning from Ilo, Peru, to Santos, Brazil, via the route Tacna–Collpa–La Paz–San Lorenzo–Extrema.80

In the manufacturing sector, by contrast to countries like Brazil, Mexico, and to a lesser extent Colombia, Chinese rms have made almost no investments in Bolivia. As in the other sectors
examined in this work, however, they have built industrial facilities under contract with the Boli- vian state, albeit with dif culties that have limited the contribution of those facilities to the natio- nal economy.
One of the rst such projects under the Morales administration was an asphalt production facility in El Alto, on the outskirts of La Paz, nanced and constructed by Chinese companies, and completed in 2012.81 In an even bigger venture, in 2012, CAMC Engineering was contracted to build a $174 million sugar factory in San Buenaventura, in the Department of La Paz.82 The facility was completed in October 201583 but did not immediately begin producing sugar, due to the lack of infrastructure connecting the remote facility to the local economy, and the lack of farmers growing sugarcane in the area to supply the plant. Also in 2012, the Bolivian state orga- nization PAPELBOL contracted the previously mentioned Chinese company Vicstar construct a paper mill in the town of Villa Tunari, in the Department of Chapare.84 The $25 million factory began operating in January 2014.85

Telecommunications and Space
Huawei and ZTE are two PRC-based companies that have spearheaded the Chinese advance across Latin America and the Caribbean. They have made similar advances in Bolivia’s telecom- munications sector, selling their telephones and communications equipment and building net- works for the nation’s state telecommunications company, ENTEL. Huawei began doing busi- ness in Bolivia in 2008, but its rst major advance occurred in October 2009, sixteen months after the Morales government nationalized the telecommunications sector. Entel signed a $120 million contract with Huawei to provide telecommunications service to 1.5 million new users in 12,000 localities across the country in a project called “Total Territorial Coverage” (TCT).86
Huawei has also worked with the private telecommunications providers Tigo and Viva, on GSM, and 3G telecommunications standards networks.87 By 2013, Huawei was also the third ma- jor seller of smartphones in the Bolivian market, behind Apple and Samsung, and was a principal supplier of other telecommunications equipment.88 While Huawei has been the dominant Chi- nese company in Bolivia, ZTE has also made advances. In September 2014, it was selected by Entel as the exclusive supplier for building an FTTx broadband network covering the country.89
In the space sector, China has not only constructed and launched Bolivia’s only satellite, the “Tupac Katari” but effectively built its entire space ground infrastructure and trained its person- nel. The Bolivian government signed the contract for the “Tupac Katari,” a telecommunications relay satellite, with the China Aerospace Science and Technology Corporation (CASC), on 2 April 2010.90 Of the $302 million project cost, 85 percent was nanced by the PRC.91 The satellite was successfully launched into geostationary orbit in December 2013 from China’s Xichang launch facility, with President Morales, present in the PRC to watch.92 It began functioning in April 2014.93
Paralleling the structure of China’s support to Venezuela’s satellite program, it has built two ground stations for Bolivia for communication, monitoring and mission control. Subsequently, they were put into the hands of the Bolivian military. One was established at Amachuma, near the capital city La Paz, and the other at La Guardia, in Santa Cruz. Also, Chinese technicians trained the Bolivians to operate the new facilities and administer the space program, including 64 Bolivians that were sent to the PRC for training.94 Bolivia and the PRC have subsequently committed to a second, smaller satellite, the “Bertolina Sisa” to be developed and launched at an estimated cost of $150 million.95 The Bertolina Sisa will be dedicated to earth imaging rather than telecommunications.96

Military Engagement
As with other countries in Latin America and the Caribbean, especially those of the Alianza Bolivariana para los Pueblos de Nuestra América (ALBA), the PRC has pursued a military rela- tionship with Bolivia that features regular meetings of senior defense of cials of each country, lower-level of cer exchanges for professional military education, and arms sales.97 In May 2013, the deputy head of the PLA, Wang Guanzhong, visited Bolivia, while in December 2011 then commander of the Bolivian armed forces, Armando Pacheco Gutierrez, visited the PRC.98 In March 2011, the deputy head of the PLA joint staff, Ma Xiaotian, visited Bolivia, and in August 2010, the Bolivian minister of defense, Ruben Saavedra, visited the PRC.99 At lower levels, Boli- vian of cers regularly attend courses in the PRC, such as those offered by China’s National De- fense University in Champing, outside Beijing, and technical courses for training on the use and maintenance of Chinese equipment that Bolivia has acquired.100
Bolivia was one of the rst countries in the region to purchase Chinese military hardware, although its military of cers have expressed discontent with its quality and durability.101 During the period 1987–1996, the Bolivian military purchased 10,000 AK-47 assault ri es from the PRC.102 It also purchased man-portable HN-5 air defense missiles, which were eventually delive- red to the United States in November 2005 to be dismantled.103
The PRC has also periodically donated military and dual-use goods to the Bolivian armed forces, including an assault boat, infantry and artillery munitions, night-vision goggles, Kevlar helmets, trucks, buses, sport-utility vehicles, and gunboats.104 In one such instance, in October 2013, the PRC donated eight busses and other military equipment valued at $8 million.105 Des- pite the frequency of such donations, almost none of the Chinese vehicles are currently in ser- vice. Bolivian experts interviewed for this study asserted that the Chinese vehicles seldom lasted more than ve years. Indeed, one such donation of road construction and engineering equip- ment caused particular bad will when almost all of the vehicles donated quickly broke down.106

Beyond such gifts, during the Morales presidency, Bolivia also began acquiring Chinese mili- tary aircraft, leasing two MA-60 mid-sized military cargo and passenger planes, and in 2010, purchasing six K-8 aircraft, ostensibly for use as interceptors against narcotraf ckers. The Boli- vian armed forces also went on to acquire six H-425/Z-9 helicopters from the PRC, delivered in September 2014.107 Most recently, the PRC has expressed interest in selling Bolivia 2 radars for $80 million,108 as well as new aircraft and ri es. However, Austria was rumored to be the favored vendor for the radars.

Implications and Prospects for the Future
The Morales government in Bolivia is taking a substantial step to deepen its relationship with the PRC, with an apparent strategy of using it as its principal contractor and nancier for a state- led project of national development. The scandal which broke in February 2016 regarding ques- tions of improper in uence and possible criminal wrongdoing stemming from Pres. Evo Morales’s relationship with CAMC Engineering’s Bolivia country manager Gabriela Zapata raises the prospect of the derailing of China’s rapid progress. If it is not, Bolivia’s particular approach to using Chinese companies and nancing for its national development raises multiple concerns.

First, the mixed track record of Bolivian public contracting and the state’s administration of sectors such as petroleum, mining, electricity, and telecommunications does not inspire con - dence that the Chinese funds will be used in the most effective and ef cient fashion to promote national development. Likewise, problems with the quality of products and services provided by Chinese companies contracted by the Bolivian government thus far has been problematic. Such concerns and multiple failures of these companies in meeting schedules while avoiding labor and social con icts does not bode well when even larger contracts are at stake.

Also, the Bolivian government’s income, the royalties, the tax revenues, and the income of state companies, is highly dependent on the export of primary commodities. Commodity prices are currently depressed with no immediate prospect of improvement, making the government’s disposition to more than double the national debt for domestic infrastructure projects a risky proposition.109

The risks of the Bolivian gambit, if it is more than rhetoric for the February 2016 constitutio- nal referendum, also raise questions concerning how the PRC plans to secure repayment of Bolivia’s debt. As China’s leaders and bankers, with nonperforming loan problems at home and watching the unfolding crisis in Venezuela––having lent them more than $56 billion dollars––it is likely that the PRC has contractual mechanisms, economic leverage, or political strategies, to ensure that Bolivia will pay.110 The history of state-led development efforts in Latin America does not bode well for Bolivia’s current endeavor. The PRC’s record of sustained high GDP growth suggests that state-led initiatives if well considered and competently executed through strong institutions and continuing oversight in synchronization with the imperatives of the global eco- nomy, can produce signi cant positive results for a while.

In China’s engagement with Africa, Latin America, and the Caribbean there are few major countries where its engagement has focused as completely, as it has in Bolivia, on the self- nan- ced provisioning of goods and services, without equity investment. As China’s economy conti- nues to decelerate, and as opportunities for construction projects and the productive investment of capital within the PRC dry up, the “Bolivia model” of engagement will become an increasingly tempting choice for China’s leadership.111

If the “Bolivia model” succeeds in channeling Chinese resources to produce sustainable natio- nal development, the example will shape Latin America’s policy debates and politics for years to come. If it fails, China’s reputation as a driver of South–South engagement will suffer, Bolivia will return to its historical pattern of underdevelopment and instability, and the region’s politics will turn more sharply toward the center-right. In either scenario, the Bolivia–PRC relationship will likely nd its way into more studies on China’s engagement with Latin America than it has in the past decade.

1. Wálter Vásquez, “Cada Préstamo Tendrá Dos Tipos de Tasas de Interés,” La Razón, 25 October 2015, http: //; Ivan Bustillos, “Bolivia Elegirá Empresas Chinas que Hagan Obras,” La Razón, 26 October 2015, com/economia/Bolivia-elegira-empresas-chinas-obras_0_2369763032.html; and Aine Quispe, “Crédito Chino Fi- nanciará Plan Quinquenal,” La Razón, 4 December 2015, chino-financiara-plan-quinquenal_0_2393160694.html.
2. “El Estatuto Aprobado No Re eja la Autonomía por la Que Se Votó en 2008,” El Deber, 26 July 2015, http://www. eja-autonomia.html.
3. “Chile Rompe Consenso sobre Presidencia Boliviana en Celac,” La Razón, 28 January 2016,
4. The remarkable list of compiled volumes on the China–Latin America relationship which include country studies, yet do not include Bolivia. Included are Riordan Roett and Guadalupe Paz, eds., China’s Expansion into the Western hemisphere: Implications for Latin America and the United States, (Washington DC: Brookings Institution Press, 2008); Rhys Jenkins and Enrique Dussel Peters, eds., China and Latin America: Economic Relations in the Twenty-first Century, (Mexico City: German Development Institute, 2009); He Shangrong, ed., China–Latin America Relations: Review and Analysis, vol. 1, (People’s Republic of China, Paths International Ltd., 2011); Adrian H. Hearn and José León-Manríquez, eds., China Engages Latin America: Tracing the Trajectory, (Boulder, CO: Lynne Rienner Publishers, 2011); Benjamin Creutzfeldt, ed., China en América Latina: Reflexiones sobre las relaciones transpacíficas, (Bogotá, Co- lombia: Universidad Externado, 2012); Jose Ignacio Martinez Cortes, ed., America Latina y El Caribe- China: Relacio- nes Politicas e Internacionales, (Mexico City: Red America Latina y el Caribe Sobre China, 2013); Ariel C. Armony and Enrique Dussel Peters, eds., Beyond Raw materials: Who Are the Actors in the Latin America and Caribbean–China Relationship? Buenos Aires, (Argentina: Frederich-Ebert-Stiftung, 2015).
5. Pablo Poveda, “Bolivia and China: Indirect Relations in a Global Market,” in Latin America Facing China: South–South Relations beyond the Washington Consensus, Alex E. Fernandez Jilberto and Barbara Hogenboom, eds.,
153-66, (New York: Bergham Books, 2012); and R. Evan Ellis, China in Latin America: The Whats and Wherefores (Boulder, CO: Lynne Rienner Publishers, 2009), 137–146.
6. For more details on the evolution of the posture of Latin America and the Caribbean towards the PRC, see R. Evan Ellis, “Latin America’s Foreign Policy as the Region Engages in China,” Security and Defense Studies Review 15 (2014): 41–59.
7. Joe Mcdonald, “Bolivian Leader Names China Ideological Ally,” The Washington Times, 10 January 2006,
8. “Bolivian President Arrives in Beijing for China Visit,” People’s Daily Online, 10 August 2011, http://en.; and “Bolivian Crowds Cheer Tupak Katari Satellite Launch,” BBC, 21 December 2013,
9. Carlos Corz, “Agencia Boliviana Espacial Elige a los 64 Becarios para Capacitarse en el Manejo del Satélite Túpac Katari,” La Razón, 9 October 2012, viana-Espacial-Tupac-Katari_0_1702629783.html.
10. Angel Guarachi, “Tres Magistrados Anticipan su Retorno de China tras Críticas por Dejar sin Quórum al TCP,” La Razón, 30 November 2015, criticas-TCP_0_2390760988.html; and Yuvert Donoso, “TCP Admite que Fue un Error el Viaje a China,” La Razón, 1 January 2016,
11. The Joshua Project,, accessed 28 January 2016.
12. Ellis, China in Latin America, 138.
13. “Tráfico de Asiáticos: Caen 56 Chinos Ilegales,” La Razón, 4 June 2004,

autonoticias/DetalleNoticia20762.asp; “En Migración Se Destapa Negociado con los Pasaportes,” Corrupción en Bolivia, 15 March 2007,; and “Con Trabjo en Equipo se Destapo el caso de las visas,” La Razón, 13 December 2006, com; and “Hallan cajas con visas,” Los Tiempos, 1 October 2008, nacional/20081001/hallan-cajas-con-visas_21251_27983.html.
14. Interview with Bolivian subject matter expert 1 February 2016.
15. Direction of Trade Statistics Quarterly, December 2015, International Monetary Fund, 16 December 2015, 73,
16 Direction of Trade Statistics Yearbook, 2007, International Monetary Fund, 29 October 2007, 95, http://dx.doi. org/10.5089/9781589066571.042.
17. “China, la mayor fuente de importaciones para Bolivia,” Bolivia Industria y Empresa, 6 February 2015,
18. Direction of Trade Statistics Quarterly, December 2015, International Monetary Fund, 23.
19. Christopher Andre, “Bolivia aumentó valor de exportaciones a China,” El Deber, 23 October 2015, http://
20. People’s Republic of China Ministry of Foreign Affairs, “China and Bolivia,” mfa_eng/wjb_663304/zzjg_663340/ldmzs_664952/gjlb_664956/3468_664998/, accessed 31 January 2016.
21. Aline Quispe, “La importación de ropa crece 25 percent y la mitad proviene de China,” La Razón, 20 Sept- ember 2015, Indeed, the import of fabric and cheap clothing is resented by Bolivian artisans, many of whom perceive that low- priced Chinese goods are putting them out of business. “Artesanos bordadores ven fin de su profesión por inva- sión del mercado chino,” Los Tiempos, 16 January 2016, mia/20160116/artesanos-bordadores-ven-el-fin-de-su-profesión-por-invasión-del-mercado_329831_732903.html.
22. People’s Republic of China Ministry of Foreign Affairs, “China and Bolivia.”
23. Matt Gaisner, “Best Selling Cars around the Globe: How the Chinese Are Setting Themselves up for Success (Part 2: Latin America),” The Truth about Cars, 4 June 2013, lling-cars-around-the-globe-how-the-chinese-are-setting-themselves-up-for-success-part-2-latin-america/.
24. “Edgar Toro, “Los autos chinos Great Wall vienen con motor Mitsubishi,” La Razón, 15 July 2012, http:// bishi_0_1649235147.html.
25. “La nueva flota de buses Pumakatari ya está en la aduana de El Alto,” Los Tiempos, 12 December 2015,á- en-la-aduana-de-el_325916_723798.html; and “Gobierno comprará 1.500 cámaras de vigilancia con crédito chino de $us 35 millones,” Los Tiempos, 6 October 2014, nal/20141006/gobierno-comprará-1500-cámaras-de-vigilancia-con-crédito-chino-de-us-35_276483_608005.html.
26. “China condonará deuda de créditos sin interés concedidos a Bolivia,” 2015.
27. “Gobierno espera que barcazas lleguen en 45 días,” Los Tiempos, 7 January 2016, /diario/actualidad/economia/20160107/gobierno-espera-que-barcazas-lleguen-en-45-días_328692_730191.html.
28. Confucius Institute headquarters,, accessed 28 January 2016; Ramon Rocha Monroy, “Instituto Confucio en Cochabamba,” Los Tiempos, 12 January 2012, http://www.lostiem-; and
“Confucius Institute at the University San Simon,” Accessed 28 January 2016, /node_42663.htm.
29. Promueve Bolivia,, accessed 2 February 2016.
30. “La rueda de negocios genera 98 millones de dólares en su primer día,” El Deber, 26 September 2014,
31. “Comerciantes cambian Iquique por China para compra de mercadería,” La Razón, 8 November 2015,
32. The Chinese also learn and make contacts from periodic visits by Chinese businessmen to the country. In December 2014, for example, Bolivia’s National Industries Council reported the visit of a group of 50 Chinese entrepreneurs visiting the country to explore investments. “50 empresarios chinos llegan para hacer negocios,” Los Tiempos, 29 December 2014, sarios-chinos-llegan-para-hacer-negocios_286092_630533.html.
33. Katherine Schmidt, “YPFB Eyes Chinese Partner for Sanandita,” Upstream, 15 June 2012, http://www.
34. “Petrolera china busca concretar trabajos de cooperación con boliviana YPFB,” America Economia, 24 May 2013, racion-con-ypfb.
35. “Bolivia: YPFB recibe financiamiento de US$60M de china Eximbank,” America Economia, 8 January 2011, eximbank.
36. “Amoniaco y urea atraen a capitales chinos,” La Patria. 12 August 2010, http://www.lapatriaenlinea. com/?nota=37384.
37. Bolivia Ministry of Hydrocarbons and Energy, “Planta de Urea y Amoniaco inició obras en Cochabamba con garantía de provisión de gas,”12 September 2013, noticias/641-planta-de-urea-y-amoniaco-inici%C3%B3-obras-encochabamba-con-garant%C3%ADa-de- provisi%C3%B3n-de-gas.html.
38. “Ministro arremete contra empresas chinas,” Los Tiempos, 16 January 2016, tualidad/economia/20160120/ministro-arremete-contra-empresas-chinas_330225_733874.html.
39. “Congress Passes Bill to Build Tacna Megaport: Bolivia, Peru,” Business News Americas, 27 February 2006, http://www.Business News
40. R. Evan Ellis, The Strategic Dimension of China’s Engagement with Latin America, Washington DC: Center for Hemispheric Defense Studies, October 2013.
41. Carlos Corz, “Gobierno proyecta cerrar en marzo un acuerdo con Jindal,” La Razón, 28 January 2016,
42. “Mutún: dan plazo al Gobierno hasta el 2 de junio,” Los Tiempos, 27 May, 2010, http://www.lostiempos. com/diario/actualidad/economia/20100527/Mut%C3%83%C6%92%C3%82%C2%BAn:%20dan%20plazo%20 al%20Gobierno%20hasta%20el%202%20de%20junio_72590_134611.html.
43. Ivan Condori and B. Montero, “Cruceños se movilizan por la reactivación del Mutún y la ESM anuncia un Plan Siderúrgico Nacional,’ La Razón, 28 September 2015, ESM-Siderurgico-Nacional_0_2334366621.html.
44. “Dos ministros viajarán a China para gestionar financiamiento,” Los Tiempos, 16 October 2014, http://www.án-a-china-para-gestio- nar_277748_611123.html; and People’s Republic of China Ministry of Foreign Affairs, “Vice Foreign Minister Zhang Yesui Meets with Minister of Development Planning of Bolivia,” 7 May 2015, /mfa_eng/wjbxw/t1263235.shtml.
45. “Revisan ‘con cautela’ situación de Sinosteel,” Los Tiempos, 28 January 2015, rio/actualidad/economia/20160128/revisan-“con-cautela”-situación-de-sinosteel_331195_736120.html.
46. “El Presidente ratifica inversión de $us 450 MM para industrializar el hierro del Mutún,” La Razón, 22 Ja- nuary 2016,; and “Revisan ‘con cautela’ situación de Sinosteel,” Los Tiempos; “Vicepresidente dice que acero de El Mutún será para el mercado interno,” Los Tiempos, 20 January 2016, mia/20160120/linera-asegura-que-el-acero-del-mutún-será-para-el-mercado_330285_733982.html; and “Revisan ‘con cautela situación de SinoSteel,” Los Tiempos.
47. “Un acuerdo permitirá a firma china explorar salar de Coipasa ,” La Razon, 10 August 2011, http://www.
48. “GNRE firmó contrato para Planta Industrial de sales de Potasio,” Gerencia Nacional de Recursos Evapori- ticos, COMIBOL Official Website, 15 July 2015,
49. “Firma china niega tener documentos pendientes,” Los Tiempos, 2 October 2014, /diario/actualidad/economia/20141002/ rma-china-niega-tener-documentos-pendientes_275970_606836.html.
50. “Prevén que Huanuni genere $us 1,3 milliones,” Los Tiempos, 13 October 2012, http://www.lostiempos. com; and “Empresa china construirá el nuevo ingenio de Huanuni,” La Razón, 19 May 2011, com/index.php?_url=/economia/Empresa-china-construira-ingenio-Huanuni_0_1421857847.html.
51. Juan Mejía and Carlos Corz, “Estatal EMH duplicará su producción con nuevo ingenio,” La Razón, 5 February 2015,
52. “Colquiri aún dialoga y denuncian más tomas,” Los Tiempos, 9 June 2012,
53. Ibid.
54. “Colapso de dique de colas vierte desechos mineros,” Los Tiempos, 1 November 2014, http://www.lostiem- ros_279483_615083.html. In December 2015, Jungie was awarded a contract for move and treating the tailings contained in the same reservoir. “J. Mining tratará residuos mineros,” La Razón, 26 December 2015, http://www.
55. Claudia Villca, “Una firma china pierde área minera que le fue transferida,” La Razón, 28 September 2015,
56. “Empresas chinas a cargo de obras, fuera de rubro,” Los Tiempos, 4 October 2015, http://www.lostiempos. com/diario/actualidad/economia/20151004/empresas-chinas-a-cargo-de-obras-fuera-de-rubro_317841_704902. html; and “Deuda externa sube en $us 359 millones en 11 meses,” Los Tiempos, 27 December 2014, http://www. ses_285804_629877.html.
57. “Evo admite que tuvo un hijo con gerente de CAMC,” Los Tiempos, 6 February 2016, http://www.lostiem- camc_332207_738351.html.
58. “Gobierno afirma que CAMC no podrá acceder a más licitaciones,” La Razón, 8 February 2016, http://www.
59. “El Plazo de Entrega Se Amplió Hasta Mayo,” Los Tiempos, 19 January 2016, /actualidad/local/20160116/en-pocas-líneas_329791_732809.html.
60. “Presupuesto de 2 desniveles en construcción sube en 15%,” Los Tiempos, 14 January 2016, http://www.ón-sube- en_329517_732205.html.
61. Sena Fobomade, “Obras sin licencia ambiental amenazan a Rurrenabaque y a la región,” La Razón, 28 Oc- tober 2015, rrenabaque-Gaceta_0_2370363058.html.
62. “ABC acuerda la construcción de carretera El Espino–Charagua–Boyuibe,” La Razón, 19 September 2015, yuibe_0_2347565288.html.
63. “Sinohydro inicia obras en vía Padilla–El Salto,” Los Tiempos, 15 January 2016, http://www.lostiempos. com/diario/actualidad/economia/20160115/sinohydro-inicia-obras-en-vía-padilla-el-salto_329681_732546.html.
64. “Reportan avances en El Sillar y corte hacia Oruro,” Los Tiempos, 12 January 2016, http://www.lostiempos. com/diario/actualidad/economia/20160112/reportan-avances-en-el-sillar-y-corte-hacia-oruro_329256_731612.html. 65. “Restringen horarios en salidas de flotas a Oruro,” Los Tiempos, 21 January 2016, http://www.lostiempos.
com/diario/actualidad/economia/20160121/restringen-horarios-en-salidas-de-flotas-a-oruro_330382_734217. html.
66. “Empresa china CWE asfaltará carretera en Bolivia por 80 mdd,” Xinhua, 22 October 2013, http://spanish.
67. “Obreros de Sinohydro declaran paro indefinido,” Los Tiempos, 25 January 2016, http://www.lostiempos. com/diario/actualidad/economia/20160125/obreros-de-sinohydro-declaran-paro-indefinido_330773_735197. html.
68. “Obreros de Sinohydro declaran paro indefinido,” Los Tiempos, 25 January 2016, http://www.lostiempos. com/diario/actualidad/economia/20160125/obreros-de-sinohydro-declaran-paro-indefinido_330773_735197. html; and “Obreros marchan; Sinohydro califica la huelga de ilegal y llama al diálogo,” Los Tiempos, 28 January 2015, la-huelga-de-ilegal-y-llama-al_331170_736084.html.
69. “Ministro arremete contra empresas chinas,” Los Tiempos, 16 January 2016, /actualidad/economia/20160120/ministro-arremete-contra-empresas-chinas_330225_733874.html.
70. “Rescinde Contrato con Empresa China,” Los Tiempos, 26 January 2016, rio/actualidad/economia/20160126/en-pocas-líneas_330920_735518.html.
71. The fourth segment was awarded to the Mexican firm Tecno Suelo Bolivia. “Camce logra acuerdo con volqueteros de Misicuni,” Los Tiempos, 21 January 2016, cal/20160121/camce-logra-acuerdo-con-volqueteros-de-misicuni_330340_734143.html.
72. “Camce logra acuerdo con volqueteros de Misicuni,” Los Tiempos, 21 January 2016, http://www.lostiempos. com/diario/actualidad/local/20160121/camce-logra-acuerdo-con-volqueteros-de-misicuni_330340_734143. html.
73. “Chinese firm inks deal to build hydroelectric plant in Bolivia,” global Times, 26 June 2014, http://www.; and “Obreros se rebelan contra firma china,” Los Tiempos, 13 January 2016, china_329416_731925.html.
74. “Future of Bolivia’s 600-MW Rositas hydroelectric project still unsure,” hydroWorld, 20 December 2012, sure.html.
75. “Bolivia negocia construcción de hidroeléctrica de 1.300 millones de dólares,” La Razón, 11 July 2013, res_0_1867613316.html.
76. “Licitan hidroeléctrica Rositas sin tener listo el estudio a diseño final,” Los Tiempos, 18 December 2015,éctrica-rositas-sin-tener-listo- el-estudio-a-diseño_326545_725216.html.
77. Aine Quispe, “Crédito chino financiará plan quinquenal,” La Razón, 4 December, 2015,
78. Miguel Lazcano, “Gobierno busca convertir a Viru en una mega terminal aérea,” La Razón, 20 October 2015, nal_0_2366163406.html; and “China financiará Mutún y vía de Rurrenabaque,” Los Tiempos, 1 October 2015,á-mutún-y-vía-de-rurrenaba- que_317492_704106.html.
79 “China asegura crédito de $us 7.000 millones al país,” Los Tiempos, 17 December, 2015, http://www.lostiem- pais_319365_708455.html.
80. The Chinese government has indicated that it is open to nancing the project, depending on the structure of the deal. “El Gobierno asegura que Alemania y China tienen interés en nanciar el tren bioceánico,” La Razón, 11 January 2016, nanciar-bioceanico_0_2415958491.html; and “Misión alemana llegará a tratar inversión en trenes,” Los Tiempos, 12 January 2016, /actualidad/economia/20160112/misión-alemana-llegará-a-tratar-inversión-en_329282_731648.html; and “Evo y Hu- mala acuerdan impulsar tren bioceánico,” Los Tiempos, 28 January 2015, /economia/20160128/evo-y-humala-acuerdan-impulsar-tren-bioceánico_331191_736113.html. Ensuring that such a bioceanic corridor would pass through Bolivia had been a particularly high priority since June 2014 when Chinese Pre- sident Hu Jintao, in Fortaleza, Brazil, announced a $10 billion project for such a railroad connection, following a diffe- rent route Bayovar, Peru, to Açu, Brazil, conspicuously avoiding Bolivia. See “China’s Great Railway Dream: Traversing South America,” miami herald, 2 November 2015, cle42284376.html; and A. Quispe and C. Corz, “El Gobierno considera que Perú está ‘prácticamente acoplado’ al pro- yecto del tren bioceánico vía Bolivia,” La Razón, 15 January 2016, acoplado-bioceanico-Bolivia_0_2418358209.html.
81. People’s Republic of China Ministry of Foreign Affairs, “China and Bolivia”; and “La Alcaldía de El Alto Inicia el Programa De Mejoramiento de Vías con la Planta Asfaltadora,” Agencia de Noticias de Bolivia, 14 September 2012,
82. “Firman contrato para construir ingenio azucarero,” Los Tiempos, 6 March 2012, http://www.lostiempos. com/diario/actualidad/economia/20120306/firman-contrato-para-construir-ingenio-azucarero_162909_341089. html.
83. Carlos Corz, “El ingenio de San Buenaventura comienza a operar tras décadas,” La Razón, 30 October 2015, html.
84. The company previously contracted to build the facility had been terminated for nonperformance. See A. D. Hans Soria O. “Alcanzan 90 por ciento de avance en reactivación de Papelbol,” Los Tiempos, 14 October 2012, papelbol_188719_401056.html.
85 “Papelbol es inaugurada después de 6 años de haber sido creada,” La Razón, 4 January 2014, http://www.és-de-6-años-de-haber- sido_240621_523228.html.
86 “Empresa china Huawei se adjudicó proyecto TCT de Entel,” La Razón, 8 October 2009, http://www.los- entel_39803_67104.html.
87 Ibid.
88 “Huawei va por el primer lugar en el mercado local de smartphones,” La Razón, 23 November 2015, http: // ciero_0_2384761630.html.
89 “ZTESuccessfullyBecomestheExclusiveSupplierforEnteltoBuildLargestFTTxNetworkinBolivia,”ZTE,Of cial Website, 11 September 2014,
90 “Bolivian, Chinese Tupac Katari Satellite Partnership Now Of cial,” Satellite Today, 6 April 2010, http://www.sate- cial_33806.html.
91. “El Gobierno pagará 15% del costo de construcción del satélite Tupac Katari,” Los Tiempos, 30 March 2010, truccion-del-satelite-tupac_63887_116033.html.
92. Jose Reinoso, “Bolivia lanza en China su primer satélite de telecomunicaciones,” El País, 21 December 2013,
93.Wálter Vásquez, “Seis empresas de cinco países quieren construir el segundo satélite de Bolivia,” La Razón, 12 July 2015, nanciero_0_2304969589.html.
94. “Satélite: capacitarán a 74 bolivianos,” Los Tiempos, 4 March 2010, tualidad/economia/20100403/satelite-capacitaran-a-74-bolivianos_64397_117181.html.
95. Vásquez, “Seis empresas de cinco países.
96. “Bolivia receives China’s bidding to build satellite,” Xinhua, 6 June 2014, /english/china/2014-06/06/c_133388049.htm.
97. R. Evan Ellis, “Chinese Engagement with the ALBA Countries: A Relationship of Mutual Convenience?” in Decline of the US hegemony?: A Challenge of ALBA and a New Latin American Integration of the Twenty-First Century, Bruce M. Bagley and Magdalena Defort, eds., 345–368. (Lanham, MD: Lexington Books, 2015).
98. “China, Bolivia boost military cooperation,” CCTv. 12 May 2013, pdate/20130512/101994.shtml; and “China, Bolivia pledge to strengthen military ties,” People’s Daily Online, 6 December 2011,
99. “Presidente Morales se reúne con jefe militar de China,” Los Tiempos, 10 March 2011, http://www.lostiem- de_116218_230619.html; and “Bolivia y China fortalecen cooperación militar,” Los Tiempos, 18 August 2010, tar-_85679_163610.html.
100. For more details, see R. Evan Ellis, China–Latin America military Engagement: good Will, good Business, and Strategic Position (Carlisle Barracks, PA: US Army War College Strategic Studies Institute, August 2011), http://www.strategicstu-
101. Multiple interviews with officials from the armed forces of Bolivia and other Latin American countries, 2007–2016.
102 “Bolivia aclara que 10.000 fusiles fueron donados por China y no por Venezuela,” Terra, 26 June 2008, por-china_12962_17383.html.
103. “Bolivia Accuses US of Dodge in Missile Destruction,” Pravda, 29 March 2006, http://www.pravdareport. com/news/world/29-03-2006/77998-missile_destruction-0/. In what later gave rise to a criminal investigation by the Morales government, the military leadership delivered the missiles to the United States to be dismantled, due to concerns that they could fall into the hands of terrorist groups. “Reinicia juicio por misiles,” Los Tiempos, 13 January 2016, les_329415_731923.html.
104. “China dono equipos a las fuerzas armadas,” Los Tiempos, 16 December 2006, http://www.lostiempos. com/diario/actualidad/nacional/20061216/china-dono-equipos-a-las-fuerzas-armadas_29130_29130.html; “China regaló 43 vehículos a las fuerzas armadas,” El Deber, 11 September 2007,; and “China donó a las FF.AA. de Bolivia US$2,6 millones,” AmericaEconomia, 31 March 2010, http://www.americaeco- In March 2010, China dona- ted to Bolivia 27 busses for military transport, 21 light trucks, and 40 outboard motors. “Bolivia y China fortalecen cooperación militar,” Los Tiempos.

105. “Donación de equipos de EEUU y China a las Fuerzas Armadas Bolivia,” Defensa Sur, 10 October 2013, a-las-fuerzas-armadas-bolivia.
106. “China Dona Equipo de Ingeniera a las Fuerzas Armadas de Bolivia,” Infodefensa, 1 June 2012, http: // bolivia.html.
107. “El gobierno decide potenciar la fuerza aérea,” La Razón, 19 February 2007, /contenidos/politica/bolivia_compra_aviones_fuerza_aerea_pi_190806.html. “Gobierno ratifica compra de na- ves chinas y rusas,” Los Tiempos, 15 January 2010,
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109. For example, Ravi Balakrishnan and Fabian Bornhorst, “Bajos precios del gas presentan desafíos,” La Razón, 23 January 2016, fios_0_2422557822.html.
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111. R. Evan Ellis, “China’s Geo–Economic Role in Latin America,” geoeconomic with Chinese Characteristics, Working Paper, World Economic Forum (WEF), January 2016; and his, “New Directions and Dynamics in Chinese Engagement with Latin America,” Integration and Trade Journal, 2016, forthcoming. 

The article CHINESE ENGAGEMENT WITh BOLIVA was first published by: AIR & SPACE POWER JOURNAL This article is republished by permission of the author: Dr. R. Evan Ellis

Dr. R. Evan Ellis, PhD is a research professor of Latin American Studies at the U.S. Army War College Strategic Studies Institute with a focus on the region’s relation- ships with China and other non-Western Hemisphere actors. Dr. Ellis has published over 90 works, including the 2009 book China in Latin America: The Whats and Where- fores, the 2013 book The Strategic Dimension of Chinese Engagement with Latin America, and the 2014 book, China on the ground in Latin America. Dr. Ellis has presented his work in a broad range of business and government forums in 25 countries. He has given testimony on Chinese activities in Latin America to the US Congress, and has discussed his work regarding China and other external actors in Latin America on a broad range of radio and television programs, including CNN International, CNN En Español, The John Bachelor Show, Voice of America, and Radio Marti. Dr. Ellis is cited regularly in the print media in both the US and Latin America for his work in this area, including the Washington Times, Bloomberg, America Economia, DEF, and InfoBAE.. Dr. Ellis holds a PhD in political science with a specialization in com- parative politics. The views expressed in this article are strictly his own. The author thanks his research assistant, Jennifer Ng, for her contributions to this work.