Competitive Advantages of Chinese Companies

35.7%

When asked what factors determine which foreign companies—regardless of their country of origin—secure domestic energy projects, almost 80% of respondents mentioned cost as the main criterion, followed by financing conditions (54.8%), previous experience (40.5%) and speed of execution (38.1%). Only one in four respondents indicated that ESG standards play a relevant role in these processes. It is equally noteworthy that political alignment received only 28.6%, while just 16.7% considered corruption or influence peddling to be decisive factors. Overall, these results suggest that, at least for foreign firms, there is no widespread perception that their success in the region depends on improper practices or extra‑institutional political factors.

When asked about the competitive advantages of Chinese companies, interviewees highlighted low costs first (71.4%), followed by direct state support through financing and other guarantees (64.3%) and faster project execution (59.5%). It is notable that greater risk tolerance or flexibility toward local conditions received only 35.7%, suggesting that nearly two‑thirds of respondents do not view Chinese firms as assuming significantly different levels of risk than their international peers. Likewise, all interviewees attributed at least a couple of competitive advantages to Chinese companies compared with other foreign actors; none stated that they lacked advantages.

These criteria align with the strengths typically attributed to Chinese companies in the region: competitive prices, state-backed financing, and rapid execution capacity. Engineering conglomerates such as PowerChina, State Grid or China Three Gorges Group are described by the interviewees as actors who, in their view, do not stand out for offering the highest governance or social-performance standards, but rather for their ability to deliver complete projects—design, financing, and construction—more quickly and affordably than many of their international competitors.

The compatibility between these competitive advantages and the priorities of South American governments can generate effects that go beyond strictly commercial competition. When countries’ needs—particularly in terms of cost, financing and speed—align with the capabilities of an external actor, that actor tends to consolidate structural positions within the system. In this reading, Chinese companies would not only secure contracts but also embed themselves in the institutional logic of governments that prioritize affordability and operational continuity over more demanding regulatory processes, resulting in a form of structural anchoring.

Perceptions of governance vary significantly across countries. In Chile and Colombia, interviewees did not report substantive problems beyond those inherent to the sectors in which Chinese companies operate. By contrast, in Ecuador and Peru more pronounced tensions are documented, linked to cost overruns, transparency issues or socio‑environmental impacts, while in Brazil and Argentina the experience depends largely on the state or province involved. Rather than a uniform pattern, interviewees describe Chinese companies as adapting to heterogeneous institutional environments: they thrive where bureaucratic capacity is limited, yet also manage to operate without major frictions in more robust regulatory frameworks.