The sleepwalkers
China’s presence in Latin America has expanded dramatically
The region’s leaders are failing to consider the risks of growing dependence
Its main breakwater is visible from a plane at 6,000 metres (20,000 feet), a hook jutting into the Pacific from Peru’s tawny coastal desert.
In November, if all goes to plan, President Xi Jinping of China will inaugurate the vast new port at Chancay, 70km (44 miles) north of Lima on which Cosco, a Chinese company, and its local partner have so far spent $1.3bn.
Chancay typifies the footprint that China has stamped on Latin America in this century.
Two-way trade has climbed from $18bn in 2002 to $450bn in 2022.
While the United States remains the biggest trade partner for the region as a whole, China is now the biggest in South America—with Brazil, Chile, Peru and others.
The Asian giant’s presence is not just economic.
Its ambassadors are well versed in Latin America, and speak good Spanish and Portuguese.
Its diplomatic staff has been expanding.
The United States, by contrast, often leaves ambassadorial posts vacant because of political gridlock in Washington.
Local officials, journalists and academics are offered free trips to China.
During the pandemic China sent vaccines to Latin America much faster than did the United States or Europe.
This expansion alarms people like Marco Rubio, a Republican senator who sits on the Foreign Relations Committee.
He says the United States “can’t afford to let the Chinese Communist Party expand its influence and absorb Latin America and the Caribbean into its private political-economic bloc”.
China is “on the 20-yard line to our homeland”, said General Laura Richardson, the head of the us Southern Command, earlier this year.
The response in Latin America has generally been a shrug of the shoulders.
Its officials argue that by acting as buyer, investor and financier of needed infrastructure, China has stepped into a vacuum left by the West.
While the United States has free-trade agreements with 11 Latin American countries, it shows no appetite for more.
Uruguay’s centre-right government is negotiating an accord with China after its requests for one with the United States were rebuffed.
France and others are blocking the ratification of a trade pact between the European Union (eu) and Mercosur (a five-country bloc including Brazil and Argentina) which took more than 20 years to negotiate.
The United States and Europe remain the biggest foreign investors in Latin America.
The United States still dominates trade with Mexico, Central America and most Caribbean countries.
But as China’s role as a trade and investment partner grows, especially in South America, governments do not want to be forced to choose between the world’s two great powers.
“Our policy is hedging, to try to maintain a balance,” says one foreign minister.
Some want to turn hedging into a more assertive foreign-policy doctrine of “active non-alignment”, a term coined by Jorge Heine, a former Chilean ambassador who published an influential book propagating the idea in 2023.
This harks back to the Non-Aligned Movement founded during the cold war by leaders of the Third World (as it was then called), such as Jawaharlal Nehru of India and Sukarno of Indonesia.
Mr Heine argues that the United States’ embrace of protectionism under Donald Trump (which has continued under Joe Biden), and the rise of the brics group, which includes Brazil and China, amount to an irreversible shift in the world order.
Active non-alignment, he argues, “allows nations to stand closer to one of the great powers on some issues and to another on a different set of issues”.
This appeals especially to the left in Latin America, which has long chafed at what it sees as the United States’ imperialism in the region (although since the 1980s the United States’ policy has focused mainly on supporting democracy).
Certainly, it smacks of hypocrisy when officials in Washington call for Latin America to ban Huawei because of the risk of Chinese snooping, for which they have not provided evidence.
It was the United States’ own National Security Agency which was revealed by a whistleblower in 2013 to have been running a surveillance programme across Latin America.
It had intercepted the communications of Brazil’s then president, Dilma Rousseff, and Petrobras, the state-controlled oil company.
“Latin America appreciates that China doesn’t have a preachy foreign policy,” says Matias Spektor of the Fundação Getulio Vargas, a Brazilian university.
But while hedging may make sense for Latin America, in practice its leaders have often seemed oblivious to the possible political consequences of economic decisions.
“Latin America is not thinking about China’s dominance either in short-term policymaking or in the longer term,” says Margaret Myers of the Inter-American Dialogue, a Washington think-tank.
That certainly applies to Peru, which, besides Chancay port, has allowed Chinese state companies to acquire a monopoly on the electricity supply to the capital, Lima.
The competition regulator applied minor conditions regarding the purchase of electricity from associated power generators.
But no government entity considered the geopolitical implications.
The threat is not so much that China could turn off the lights but rather that it has acquired a tool for applying more subtle pressure.
“China is trying to create a situation in which it shapes the external environment in Latin America according to its interests,” says Ms Myers.
This, of course, is what the United States has long sought to do.
But there is far more consciousness of that in Latin America, and more independent thinking about how to respond.
“Nobody is thinking in an organised way about Chinese investment,” says the foreign minister.
There is no strategic vetting of foreign investments, as happens in Europe or the United States.
A state-owned Chinese firm has a clearly different relationship to its home government than, say, a private European one.
There is a shortage of China experts in the region, and China is financing the work of several of the few foreign-policy think-tanks that do exist.
Both the eu and the United States are talking more about investing in Latin America.
At a summit last year the eu pledged to invest over €45bn ($48bn) in the region by 2027, focusing on green energy, digitalisation and critical minerals.
Shortly after, Mr Biden hosted ten countries from Latin America and the Caribbean for the first summit of an “Americas Partnership for Prosperity”, backed mainly by funds from the Inter-American Development Bank.
Latin American diplomats say both initiatives are largely repackaging existing programmes and lack content.
More muscle might come from the Americas Act, a bill sent to Congress in March with bipartisan backing.
This would offer trade benefits, infrastructure funding and investment subsidies for near-shoring to Latin America and the Caribbean.
As for Latin America, to make the most of its various suitors while minimising the risk of dependence, it needs much sharper eyes.
0 comments:
Publicar un comentario