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China, the EU and Latin America : current issues and future cooperation
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54 China theEUandLatinAmerica:CurrentIssuesandFutureCooperation Third itishardtocontrolsocialrisks.Socialriskshererefertoeventsof thekindthatcaninterruptnormaloilproductionandareoutofcompanies control.Inrecentyears ChinasoiloperationsinLatinAmericahavesometimes beendisturbedbynativeactivistgroupsseekinghigherwelfarebenefits.InJuly 2007 ChinasoilprogrammesintheEcuadorianpartoftheAmazonbasinwere partlydestroyedbynativepeople leadingtoseriouseconomiclosses.Other foreign oilcompanies have had similar experiences.Furthermore terrorist attacksstillsometimestakeplaceinthisregion. Fourth environmentalrequirementshaverisenconsiderably.Between1990 and2005 20percentoftheforestryinEcuadorwasdestroyedbyoilexploration andproduction OPEC2007:48 .Inordertoimproveenvironmentalprotection somegovernmentsrequirethatforeigncompaniesagreetostrictenvironmental protectionclauseswhentheynegotiateoilcontracts.Environmentalprotectionis sometimesalsoforcedbylocalprotestsintheaffectedregions.Forexample Peruviannativesarmedwithbows arrowsandriflesblockedoilproductionat ArgentinecrudeproducerPluspetrolwhichwasforcedtoshutdownits50 000 barrelsperdayoiloperationinPerusnorthernjungle.Thecompanyfinally promisedtoworkwiththegovernmentandlocalcommunitiestocleanuprivers anddevelopprojectssuchasfishfarms.InSinoLatinAmericanoilcooperation programmes bothsidesattachgreatimportancetoenvironmentalprotection. Therefore forChineseoilcompanies itisevidentthatmorecapitalisneededto meetenvironmentalprotectionrequirements. Fifth theroleoftheUScannotbeneglected.TheUSexertsadominant influenceinthe Westernhemispherebotheconomicallyandgeopolitically and LatinAmericadependsheavilyontheUSenergymarketintermsofoilexports. AccordingtoBP WorldEnergyStatistics2008 theUSimported204million tonnesin2007 accountingfor74.43percentofLatin Americancrudeoil exports.WiththerapiddevelopmentofSinoLatinAmericanoilcooperation US scholarsarguethatChinaspenetrationofLatinAmericacouldposeathreatto USenergysecurity.Suchviewsarebasedonazerosumlogic:inotherwords themoreoilChinaimportsfromLatinAmerica thelessoilwillbeavailableto theUS. InadditionitmustbetakenintoconsiderationthatEuropeanandUSoil companiesdominatetheLatinAmericanoilmarket.Onlyinrecentyearshave Russia IndiaandIranenteredtheLatinAmericanoilsector.Chinaisonlyone strategic partner enabling Latin American countries to diversify their cooperation.ChinawillfacefiercecompetitionintheLatinAmericanoilmarket.