Latin America, China, and Pursuing the Region's True Self-Interest
Brazilian President Luiz Inácio Lula da Silva’s high-profile April 2023 trip to the People’s Republic of China (PRC) highlights that, with the end of the Xi regime’s zero-Covid policies facilitating travel by diplomats and businesspersons, China is set to make major advances with the region. Presidents Xiomara Castro, Gustavo Petro, Chan Santokhi, and Gabriel Boric may all travel to China this year, and Xi could visit the Latin America.
The International Monetary Fund recorded $445 billion in PRC trade with the region in 2021 (a 26-fold jump in two decades), while the Mexico-based China-Latin America Caribbean network documents 524 Chinese investment projects in the region worth $172 billion during the period. PRC-based companies are expanding their presence in electricity transmission and distribution, renewable energy generation (hydroelectric, wind, photovoltaic and even nuclear), and across the digital domain from telecommunications and cloud services (including Huawei, ZTE, Xiaomi and Oppo), security systems with biometrics (Hikvision and Dahua), Nuctec customs scanners, Alibaba in eCommerce and Didi Chuxing in ride-sharing, to name a few.
Such growing business, and China’s disarming language of “win-win,”“South-South” camaraderie must not distract the region from the reality that the PRC and its entities are also pursuing goals, including capturing as much of the value added in supply chains as possible, and dominating strategic industries. The weakness of the region’s institutions, and its non-transparent interactions often help the Chinese to get the better of the bargain.
The Chinese are not the first foreigners to sign lopsided or ill-conceived deals with local elites, but the difficulty of obtaining redress from the Chinese government when PRC- Based companies behave badly should give pause to governments across the region, vulnerable through weak oversight and justice systems.
The region is already littered with two decades of failed Chinese projects that benefitted the locals signing the deal and the Chinese doing the work, but left the people with the bill and the mess. The Nicaragua Canal, the Quijos and Coca Coda Sinclair dams in Ecuador, the CVG Ferrominera Orinoco project and Tinaco-Anaco train in Venezuela, the Montero-Bulo Bulo train in Bolivia, the Panama Colon Container Port and Panama City-David bullet train are but a few.
In Latin America, politicians and businesspersons are uncomfortable to talk too critically of China’s track record, let alone its repression of democracy in Hong Kong, internment of Uighur Moslems, ongoing military intimidation of Taiwan, and “9-dash-line” territorial claims against its neighbors, lest such talk risk jeopardize access to China’s market or lucrative deals with PRC-based business partners.
U.S. discussion of such risks is similarly dismissed by the region, on the flawed logic that the U.S.’ own flaws, or failure to “out-bid” the Chinese is license for Latin American elites to take PRC money without an open, competent public review. As China advances in Latin America in 2023, transparency, data, public debate, and competent government processes will go far in protecting the region from China’s most predatory practices and
empowering it to take advantage of China’s true opportunities.
