What Now for China in Latin America?

Latin America Correspondent Jon Bonfiglio looks at Chinese influence in the region, and questions what next for the superpower, after the US realigns itself towards dominance of the western hemisphere. 

Transcript

“This is the Western Hemisphere. This is where we live – and we’re not going to allow the Western Hemisphere to be a base of operation for adversaries, competitors, and rivals of the United States.”

That was US Secretary of State Marco Rubio, soon after the capture and removal of former Venezuelan President Nicolas Maduro. 

Cue sharp intake of breath. 

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Hi everyone. Well, as Trump dominates the narrative in Latin America, with his neo-imperialism, or resource imperialism, or new Monroe Doctrine, or just general international thuggery, or whatever you want to call it, there’s another question which all this provokes, and which related to that statement of Rubio’s. Specifically, what next for China, and its role and presence in Latin America?

Because the US’s focus on its own backyard is not simply about establishing its own dominance in the region, but also very much about squeezing China out.

First up, a bare, and highly telling fact: 

In the last dozen years, China has outspent the US on a three-to-one basis in terms of official lending and grant-giving in Latin America and the Caribbean. 

The United States still leads the way in terms of direct investment, but as regards lending and direct grants not linked to commerce, China is streets ahead. And none of this is free money, obviously. The loans come back at a price, and make countries beholden to Beijing, in the long term. And grants curry political favour. So whilst Trump may be functionally and precisely incorrect in declaring - for instance - that China runs the Panama Canal, his instinct that China has been quietly - and not so quietly - expanding its influence right across Latin America for at least the last generation, is correct. 

Over this period, Chinese firms have financed or delivered major infrastructure projects including ports, bridges, power stations, metro systems, hospitals. If you can build it, the Chinese have done it. 

China now also counts the region as its second-largest trading partner, after the USA.

Now, I referred earlier to Chinese firms, and this is true, these are often Chinese companies and not the state itself, directly, but Chinese companies are never entirely independent. In some cases, this is obvious. 

Take the deep-water port of Chancay in Peru, for instance, near the capital, Lima. The port is joint-operated by a Peruvian entity and Chinese state-owned shipping company COSCO, which has links to the Chinese military. But even where this is not as transparent, it is not a leap of understanding to comprehend that Chinese entities, state or private, have a fair degree of overlap in the venn diagram of global hegemony. 

Policy papers released by China vis a vis the region point to an enhancement of its network across Latin America, alongside an opposition of power politics (not naming the US directly) and imperialism. Of course, China wants to do much the same, and is just using softer language to woo domestic powers. But, if it looks like imperialism, walks like imperialism, and quacks like imperialism, then - you know what - it’s probably imperialism. 

And of course we live in times curious enough that one of the best entry to points to enhancing your imperialism is by denouncing that of another. 

There was a key statement from a Chinese government adviser last month. Zheng Yongnian, who is also an academic, pointed to an upcoming “feudalization of the international order”, as the greater powers look to expand their areas of dominance and direct allegiance. It’s a stark statement. Obvious, but uncontroversial. 

The big question in all this is how China will react. How it will react in its own back yard is pretty obvious - we’re already seeing that in the South China Sea and with Taiwan, among many other examples. But how it reacts to this realignment in Latin America and the Caribbean is what is undecided. Financially it has a lot to lose, from stakes in Venezuelan oil fields, to the billions issued in loans, but will it accept such a significant loss in influence? Influence it has worked decades to establish? We all know where the United States is at, with its new and overt imposition on the region, determined to cast it in the image of its current President, but China has some pretty big thinking to do, thinking which - almost certainly - has implications for us all.