Weapons, iron ore and electricity bolster Chinese influence in Latin America – Analysis – Eurasia Review
By Dan Southerland *
Chinese companies and state-owned banks have invested in power utilities in Latin America, generating revenue for businesses and creating leverage for Beijing to advance its interests in a region sometimes referred to as “the rear.” -court of America â.
One of the most comprehensive reports on the subject was written by R. Evan Ellis, Professor and Researcher in Latin American Studies at the Institute of Strategic Studies at the US Army War College.
COVID-19 has caused economic setbacks in a number of these countries, so they are more likely to accept certain Chinese projects that they would have rejected in the past, Ellis said.
Wall newspaper recently analyzed data from a number of Latin American countries that reveal a staggering number of deaths from COVID-19.
According to The newspaper, the country with the very daily death rate in the world as of June 21 was landlocked Paraguay, with 19 times more deaths than the United States per capita.
And with 50 million people, Colombia has recorded around 4,200 deaths from COVID-19 in the past week, about 50% more than Africa as a whole.
Less than one in 10 people in Latin America has been vaccinated, according to the Pan American Health Organization (PAHO).
Carissa F. Etienne, Director of PAHO, at the same time urged the leaders of the Group of Seven (G7) countries to accelerate the delivery of the billion vaccines they have promised to developing countries here. the end of 2023.
Meanwhile, China has imported around 75 percent of the world’s traded iron ore and some 60 percent of its copper ore from Latin American countries for years.
Latin American countries have joined China’s Belt and Road Initiative, often referred to as BRI, which funds overseas infrastructure projects in nearly 70 countries.
BRI recruits 18 of 31 countries
David Dollar, senior researcher at the U.S.-based Brookings Institution, says the BIS is controversial in the West due to a lack of transparency that makes it difficult to get reliable information on the initiative’s finances as well. only on specific projects. and their terms.
According to the US-based Atlantic Council, Panama in November 2017 became the first Latin American country to officially approve the BRI, five months after changing diplomatic relations from Taiwan to China.
Over the next two years, 18 of the 33 countries in the region will join the BRI, with a few notable exceptions.
Argentina, Brazil, Colombia and Mexico, the region’s four largest economies, accounting for nearly 70% of its GDP, have closely followed the initiative, but have yet to sign. However, they should do so at some point.
For many governments and businesses in Latin America, the BRI offers an opportunity to expand access to China, a growing export destination and a source of external funding.
Over the past 20 years, bilateral trade has grown 25-fold, from $ 12 billion in 1999 to $ 306 billion in 2018, making China Latin America’s second-largest trading partner after the United States. .
Since 2005, Chinese banks have granted more than $ 141 billion in loan commitments to Latin America, exceeding, in several years, loans from the World Bank, the Inter-American Development Bank and the Development Bank. from Latin America reunited.
China is also becoming an increasingly important foreign direct investor in the region, notably through mergers and acquisitions.
But the BIS has yet to spur a visible increase in Chinese business activity in Latin America.
China has been less active in promoting the BRI in the Western Hemisphere than in other regions. The BRI’s six economic corridors across Eurasia continue to have global priority.
Low risk bet
There are fears that the BIS could spark confrontations with the United States, Latin America’s longtime ally in the hemisphere and most important trading partner, which has consistently warned of ” the debt âof the BIS.
Despite the apparent lack of immediate gains associated with the BRI, most countries in Latin America and the Caribbean appear to have responded neutrally or favorably to the initiative.
On the risk side, many believe that Chinese loans alone are not enough to trigger systemic debt problems in most Latin American economies. And therefore, for many in Latin America, the BIS appears as a low risk bet for increased economic growth and international cooperation.
China’s high concentration of activity in Latin American agricultural sectors has strained water supplies and increased deforestation and greenhouse gas emissions, according to a 2015 study coordinated by the Global Economic Governance Institute at Boston University.
Some projects, such as hydroelectric projects, have sparked protests from indigenous groups in several Latin American countries
China appears to have its most positive and constructive relationship in Latin America with Uruguay, one of the smaller countries in the region.
Uruguay’s day-to-day relations with the PRC are shaped by two key figures: Chinese Ambassador to Uruguay Wang Gang and Uruguayan Ambassador to China Juan Fernando Lugris RodrÃguez.
According to Ellis, observers generally view Wang as low-key and efficient, working quietly with Uruguayan institutions, facilitating significant Chinese support for Uruguay during the COVID-19 pandemic and showing a sensitivity to the mistrust that many people in Uruguay have. to China.
Weapons for Venezuela
In recent years, China has also sold self-propelled artillery, armored vehicles, rocket launchers, helicopters and fighter jets to various countries in the Caribbean and Latin America.
As Ellis noted in Latin America and the Asian giants, a book published in 2016 on the evolution of Latin America’s ties with China and India, Venezuela offered China its first opportunity to sell sophisticated military systems to the region in 2005.
Within a few years, China then began selling weapons to Bolivia, which had previously received Chinese donations of rifles and anti-aircraft weapons, and to Ecuador – as part of a policy that seemed designed to support Venezuela and the other socialist or populist regimes of the left, which had united in an anti-American “Bolivarian Alliance of the Americas” of eight nations.
But in recent years, China’s arms sales have grown not only in these three countries, but also across the continent.
Whereas in previous decades the United States was a major arms supplier to Latin American military regimes, China now has the advantage by offering low prices for weapons with few conditions.
The law now prohibits the United States from selling weapons to a number of Latin American countries, including Venezuela.
Investments in the electricity network
Regarding arms sales to Venezuela, Ellis told RFA that “China … has effectively supplanted the Russians over the past two years as the country’s main arms supplier.”
âAnd China has often beaten its Russian competitors in Peru and elsewhere,â noted Evan Ellis a few years ago.
As an article by Allan Nixon published in 2016 in The diplomat clearly, arms sales must be seen in the context of China’s long-term goal of achieving great power status and influence.
In recent years, China has regularly deployed military forces to the South American region to conduct combat exercises and humanitarian missions.
And while the People’s Liberation Army (PLA) has yet to establish basic alliances or agreements in the hemisphere, its 2015 white paper on China’s defense strategy lists protecting its business interests. global organizations as an important mission for the People’s Liberation Army.
Today, China is trying to dominate “electrical connectivity” in Latin America, a topic covered by Evan Ellis and recently published in a Brief China on the US-based Jamestown Foundation website.
Ellis’ article published on May 21 shows how Chinese companies have become involved in the generation, transmission and distribution of electricity in the region, strengthening its position in key activities for the underlying ‘connectivity’ of the region. Latin American economies.
This approach also extends to the construction and operation of ports, roads, railways, telecommunications, e-commerce and other infrastructure.
But not everything went as planned.
A China-backed transcontinental railway intended to link Brazil on the Atlantic coast to Peru on the Pacific coast has drawn criticism for ignoring environmental concerns. It would cross sensitive ecosystems in the Amazon region.
At the same time, a transcontinental highway through Brazil has been plagued by poor construction.
According to “The World Mind,” an American university website focused on relations with Latin America, the highway project, which began in 2006, was never fully completed because parts were not structurally sound. Some sections remain damaged or impassable.
*Dan Southerland is the founding editor of RFA.