Influence of the Belt and Road Initiative on the energy trade between China and Latin America

Abstract

Energy is the basis and driving force for the progress of humanity, it is vital for economicdevelopment, for people's lives, and for the national security of countries. This research will analyzea set of variables that affect the behavior of Latin American energy exports to the People's Republicof China during the period 2000 -2019 using a log-linear model. The results show that assuming a realgrowth of China's gross domestic product (GDP) close to 7% per year, Latin American energy exportsto China would grow by 4% per year on average. Assuming an average annual increase of 5% in China'senergy production, Latin American energy exports to China are estimated to increase by 5.9%. Withrespect to energy consumption in China, assuming a 7% increase, it is estimated that energy exportsfrom Latin America to China would grow by 8.2%. This model also estimates the elasticity of energyexports according to the behavior of energy prices, China's investment in Latin America and the projectsdeveloped by the Asian country in the region.