FORUMS AND INFLUENCE: CHINESE COMPETITIVE STRATEGY AND MULTILATERAL ORGANIZATIONS IN LATIN AMERICA AND THE CARIBBEAN
Editor’s note: This article is part of the series “Compete and Win: Envisioning a Competitive Strategy for the Twenty-First Century.” The series endeavors to present expert commentary on diverse issues surrounding US competitive strategy and irregular warfare with peer and near-peer competitors in the physical, cyber, and information spaces. The series is part of the Competition in Cyberspace Project (C2P), a joint initiative by the Army Cyber Institute and the Modern War Institute. Read all articles in the series here.
Special thanks to series editors Capt. Maggie Smith, PhD, C2P director, and Dr. Barnett S. Koven.
The recent Summit of the Americas in Los Angeles was Washington’s big push to showcase the importance of multilateral forums in Latin America and the Caribbean as a shaping tool for developing a regional agenda and fostering coordination. Of course, the administration of President Joe Biden did not extend an invitation to the People’s Republic of China (PRC), but China was on everyone’s mind. “It’s much better for us . . . to have a supply chain here in the Americas than it is for us to be dependent on a supply chain that comes from China,” US Ambassador to Mexico Ken Salazar told reporters at the event. For better or for worse, the summit was Washington’s show and focused on crafting a coordinated agenda for the region as well as showcasing the numerous points of weakness in Washington’s regional engagement, primarily stemming from the evolving political dynamics of the region. But throughout the summit, it was clear that Washington’s agenda was deeply rooted in its underlying concerns over the PRC’s ambitions in the Americas and its ongoing efforts to build relationships with the region’s various multilateral institutions to support Chinese national objectives and those of Chinese companies in the region.
PRC engagement with Latin America and the Caribbean, as in most other parts of the world, is principally economic in character, although nonetheless strategic. In support of PRC objectives, the commercial activities of Chinese firms, banks, and businesspersons are complemented by PRC government political, cultural, and security engagement in both the bilateral and multilateral domains. Such engagement was openly acknowledged by the PRC in its 2008 and 2016 white papers on its policy toward the region, as well as in its 2015–2019, 2019–2021, and 2022–2024 China-CELAC (Community of Latin American and Caribbean States) plans. While PRC commercial and bilateral political and security engagement have received increasing attention in the media and scholarly works, PRC multilateral engagement with the region has not yet received the level of detailed analysis that it warrants.
Although international relations scholars have highlighted the importance of institutions in global politics, the relative lack of analysis of PRC engagement with Latin American institutions arguably reflects a confluence of three factors: (1) the diminished attention to international organizations as an organizational construct among international relations scholars in general; (2) the tendency of China-oriented scholars to focus on its engagement with institutions of global scope such as the United Nations and its agencies, the International Monetary Fund, and the World Bank, or Asia-centric institutions; and (3) the relatively fragmented nature of multilateral institutions in Latin America. The proliferation of overlapping institutions in the region undermines the perception of their relevance when examining both PRC engagement with them and their use for other reasons.
The contemporary system of global political, financial, and other multilateral institutions was largely formed before the contemporary PRC was a powerful actor on the global stage and engaged enough in international affairs to play a significant role in shaping them. Nonetheless, that system, particularly its financial and commercial components, has been a key enabler of the PRC’s growth and transformation over the past four decades, obliging it to increasingly engage with those institutions, even while working to ensure that they do not damage PRC interests, and to selectively reorient them to better support PRC objectives.
In pursuing its objectives in Latin America and the Caribbean, as in other parts of the world, the PRC has engaged with a range of multilateral political, economic, and other institutions, including: (1) global institutions with a role in Latin America, such as those of the United Nations system, the International Monetary Fund, the World Bank, and the China-led Asia Infrastructure Investment Bank; (2) regional forums and corresponding economic institutions such as the Organization of American States, and the affiliated Inter-American Development Bank, as well as alternatives such as CELAC; (3) subregional forums and their associated economic institutions such as the Caribbean Community (CARICOM) and the Caribbean Development Bank; and (4) transregional institutions such as the BRICS forum and the affiliated New Development Bank.
The PRC has evolved its position over time in multilateral institutions involved in Latin America and the Caribbean as a function of China’s changing policies toward, presence in, and experience with the region. That engagement began to grow following China’s advance in diplomatic relations with the region in the 1970s and 1980s, as well as with increased PRC recognition of the value of engagement with global institutions (even Western ones) in the 1990s. PRC engagement with Latin American multilateral institutions was also shaped by the expansion of its commercial relations with the region after its acceptance into the World Trade Organization in 2001, and the acceleration of an operating presence by its companies in the region in the years following the 2008 global financial crisis.
Although the PRC has engaged with virtually all political and economic institutions relevant to regions into which it was welcomed, it has generally focused its efforts on those institutions in which the membership composition (including the absence of the United States), and the organization’s structure and governance rules (e.g., the absence of a permanent bureaucracy that would facilitate the formulation of a collective bargaining position regarding what the group wants from the PRC), increase China’s ability to succeed in advancing its agenda.
Often, the PRC does not heavily invest resources in such entities, but rather, uses active lobbying, with a focus on their leadership, in combination with collaboration on events, loan funds, and other selective benefits, to achieve an impact disproportionate to its level of financial participation or other relevance. Indeed, the PRC has often quietly achieved disproportionate leverage in ways that are under the radar of high-level US decision makers, until a major event focuses leader attention on the influence it has accumulated. Although outside of the hemisphere, the leverage that the PRC was able to exercise in the World Health Organization to suppress critical information about Covid-19 at the outset of the pandemic is one of the best-known examples.
The PRC’s objectives in its multilateral engagement in the region have also evolved over time, but generally include efforts to prevent the institutions from taking positions or actions adverse to the interests of the PRC. Over time, the PRC often comes to collaborate with the organizations on events and projects in ways that support its advance and that of its companies in the region by leveraging the legitimacy and regional knowledge that association with those organizations bring. It has further used multilateral engagement in other strategic ways, such as subtly using its role in United Nations institutions to protect authoritarian friends such as Venezuela, or to use its role in entities such as CELAC among others to engage with regimes that diplomatically recognize Taiwan, in order to build relationships with them to later secure their recognition of the PRC.
PRC Engagement with Multilateral Institutions
United Nations
The PRC engages on Latin America through a variety of United Nations forums. At the political level, the PRC has used the UN for subtle but firm support for friends in the region. This has included deflecting action by the international community against the authoritarian regime in Venezuela, as well as providing support for the Argentine position on the Falklands/Malvinas islands.
One of the PRC’s most significant if unrecognized vehicles for using the United Nations system to protect and advance its commercial interests in Latin America is arguably the Economic Commission on Latin America and the Caribbean (ECLAC), which is focused on regional economic analysis.
Over the past decade PRC engagement has helped to transform ECLAC from an entity once substantially critical of the economic role of external powers in the region to an institution whose reports today substantially embrace the PRC as a key source of its development. An example is a 2015 monograph, “Latin America and the Caribbean and China: Towards a New Era in Economic Cooperation,” which contrasts remarkably with the organization’s prior role in championing “dependency” thinking. In addition, ECLAC has also collaborated with the PRC on a range of events promoting PRC advances in the region, such as the annual China-Latin America Investment and Cooperation Forum.
Asia Infrastructure Investment Bank (AIIB)
Outside the United Nations system, the China-led AIIB, which supports the Belt and Road Initiative (BRI) globally, has attracted five Latin American countries as members: Argentina, Brazil, Chile, Ecuador, and Uruguay. Three more are prospective members: Bolivia, Peru, and Venezuela. Nonetheless, these eight represent less than half of the nineteen Latin American states that have signed onto BRI with hopes to benefit from it. Reflecting the AIIB focus on Asia and the regions to which China has been connected historically, as of 2022, only one of 206 projects contemplated by the AIIB—a small $90 million fund for Ecuador—has involved Latin America.
CELAC
To date, CELAC has been the Americas-wide forum that the PRC has worked with most extensively to advance its agenda in the region, to include three major summits (2014, 2019, and 2021), each of which produced associated multiyear plans. China and CELAC have also established a number of economic, technical, and other subforums to advance cooperation at a more technical level throughout the year, such as the CELAC-China Academic Forum.
The PRC preference for CELAC over working through the Organization of American States (OAS) to engage with the region arguably reflects the presence of the United States and Canada at the latter, as well as CELAC’s lack of a permanent secretariat, both of which allow China to advance its proposals to CELAC with a minimum of corresponding capabilities by countries in the region to use the body to reciprocally establish a collective bargaining position with respect to China. The January 2022 assumption of the CELAC presidency by the leftist Argentinian government of Alberto Fernandez, who is receptive toward working with the PRC in a range of areas, is likely to expand PRC opportunities for engaging with the region through CELAC.
OAS, Affiliated Institutions, and Subregional Forums
The PRC has been an active observer in the OAS since 2004. It has used its presence there to penetrate other affiliated institutions and subregional forums collectively known as the Inter-American System, including sending an officer to the Inter-American Defense College for several years, and joining the Inter-American Development Bank, but in light of the relatively strong US influence in the OAS, it has not tried in recent years to use the forum in a significant fashion.
Inter-American Development Bank (IADB)
The PRC formally joined the IADB in February 2009 as a voting member. Since that time, as with ECLAC, the number of IADB reports critical of the PRC and its impact on the region seems to have diminished. In 2013, the IADB established a “co-financing fund” with the PRC. In 2019, the IADB under Luis Alberto Moreno agreed to allow the PRC to host its board of governors’ meeting in China. Subsequent IADB head Mauricio Claver-Carone sounded the alarm about efforts by the PRC to use its influence in the organization to channel infrastructure development projects to its companies.
CARICOM and the Caribbean Development Bank (CDB)
Although PRC activities with CARICOM have been limited, its engagement with the institution has been strategically significant since five of the eight Western Hemisphere countries that continue to recognize Taiwan are found there. China’s role in CARICOM thus not only gives it opportunities to promote its commercial projects and presence in a region of strategic significance as the southeast maritime approach to the United States, but also allows it to engage in policy and other domains with the countries that diplomatically recognize Taiwan. In a manner similar to PRC engagement with the IADB, in 2017 the Export-Import Bank of China signed a memorandum of understanding with the CDB to collaborate on framing development projects in the region and to cofinance them in ways that would potentially steer work to PRC-based companies.
BRICS and the New Development Bank
The BRICS acronym—used to refer to Brazil, Russia, India, China, and South Africa—was coined by Goldman Sachs analyst Jim O’Neill (initially without including South Africa) as a framework of promising emerging markets, but the grouping was deliberately turned into a political construct by the PRC and other members. It evolved into a forum of developing states with political and economic reach extending beyond their regions for discussing global issues from an alternative perspective to established venues such as the G-7 and G-20. For the PRC, the BRICS provided a useful way to coordinate geopolitical positions with Brazil, which represents half of the population and economy of South America, in a multilateral framework that gave the positions greater authority and made them less objectionable to the United States.
China has also used the New Development Bank, first announced in 2014 and headquartered in Shanghai, to complement the AIIB in promoting infrastructure and other projects. As of January 2022, $5.2 billion in loans had been approved in Brazil. These ranged from funding for the Covid-19 response to infrastructure projects, although the actual number of approved projects subsequently undertaken is unclear.
Under Brazil’s most recent two right-of-center presidents, Michel Temer and Jair Bolsonaro, the role of the BRICS in advancing the PRC agenda has become more constrained, and the body has produced fewer advances. Nonetheless, the utility of the forum could expand again if Luiz Inácio Lula da Silva is elected to return to the Presidency in October 2022, as many expect.
Recommendations
It is important for the United States to recognize China’s engagement with multilateral institutions in Latin America and the Caribbean as one element of its multidimensional efforts to advance its strategic position in the region. The United States must play an active role in the multilateral institutions of the region where it has membership, working to identify and push back against inappropriate attempts by the PRC to exert influence over the positions of those institutions and their analytical products, or to co-opt those institutions for the benefit of PRC-based banks and companies, and the Chinese state. At the same time, the United States should work with its like-minded allies in the region to resist Chinese attempts to work around the United States in the region through forums, such as CELAC and the Bolivarian Alliance of the Americas, where the United States is excluded. While current Biden administration efforts to take an active role in multilateral affairs is helpful, the dynamics of Latin America’s multilateral organizations and the strategic issues at play there must be at the forefront for US leaders and not simply relegated to management by international organizations–facing bureaucracies within the US government. Questions of how to apply US influence in these bodies through coherent engagement strategies and technical matters such as voting positions must be incorporated more fully in advance into US strategic planning. Merely elevating them to the level of senior leadership the week that such decisions present themselves is usually too late to make a difference.
