In This Review

Globalizing Patient Capital: The Political Economy of Chinese Finance in the Americas
Globalizing Patient Capital: The Political Economy of Chinese Finance in the Americas
By Stephen B. Kaplan
Cambridge University Press, 2021, 390 pp.

Drawing on his academic expertise and his practical experience as a researcher at the Federal Reserve Bank of New York, Kaplan presents an in-depth, carefully reasoned assessment of the sudden burst in Chinese lending to Latin American governments. Some critics allege that China surreptitiously seeks to lure vulnerable countries into debt traps, but Kaplan emphasizes how Chinese state banks are working to export what they perceive as their successful state-led development model while creating fresh business opportunities for large state-owned enterprises. In contrast to capitalist banking, Chinese lenders offer long-term loans that better fit the development needs of Latin America; less concerned with the near-term debt repayment capabilities of loan recipients, patient Chinese lenders don’t seek to impose intrusive macroeconomic conditions on countries. But Chinese banks do seek assurances by demanding collateral in commodity exports and by tying credits to purchases of Chinese industrial products and sometimes even by requiring a Chinese workforce for local projects. Kaplan advises Latin American governments to push back against Chinese procurement demands, to insist on greater transparency in project contracts, and to mitigate future debt burdens through alternative forms of financing, including direct foreign investment.