Guatemala, Haiti, Belize and Paraguay are the only countries in the Americas that recognize Taiwan’s independence; the rest maintain commercial and bilateral relations with the People’s Republic of China, which is gaining more and more ground in Latin America.
SAN SALVADOR – China’s influence in Latin America has almost completely displaced Taiwan’s influence in the region: right now, there are only four countries in the Americas that maintain bilateral relations with Taiwan, the island that China claims as part of its territory. The rest of the countries seem pleased with the trade relationship and infrastructure investments built by the Asian “benefactor” in their countries: China.
The interest of the People’s Republic of China in the region has a purpose that is not yet understood by Latin Americans, according to experts quoted by Voice of America, and the key word to understand those purposes is “war”. Meanwhile, the United States, which only keeps an eye on that growing influence seems to have no plan that is not only at a discursive level, experts explain.
“The first thing we have to recognize is that we don’t have a plan right now. What we have are discussions, but not a plan. And this is a major problem (…) We must rethink what is the importance of Latin America not only for the Western world but for the world in general”, explains Julio Guzman, member of the Reagan-Fascell Democracy, of the National Endowment for Democracy, in an event held by the Hudson Institute on the growing influence of China in Latin America.
The expert believes that much of the diplomacy in Washington does not understand that Latin American politics is not the same as it was three or four decades ago, and that now the “battle” against China is not economic but one of “values and hemispheric security,” which can be won by appealing to conscience.
“The only thing that societies in Latin America are seeing from China are the smart phones, the big bridges, the stadiums, the big structures built by the Chinese in their countries. They don’t really know all the risks such as practices and corruption cases,” adds Guzman.
The U.S. position regarding Chinese influence in Latin America has been that of vigilant, while maintaining diplomatic relations with the Asian power on edge: the Taiwan issue, the Russian-Ukrainian war and the alleged spy balloons over Chinese and U.S. skies have contributed to straining those relations.
On March 7, China, through its foreign minister, Qin Gang, said that if the United States “does not put the brakes on” its stance against China, “no amount of barriers can prevent the derailment that will turn into conflict”.
Miles Yu, director of the China Center – an institution that evaluates the ideological, structural and military influence of that country – believes that Latin America has a key role to play in this issue, as the region has served in recent years for China to “hyperventilate anti-U.S. sentiment”; sometimes replicated by the region’s leaders.
“If we ever go to war with China, and the Chinese need to look for options to operate in the region, those relationships, as well as their commercial presence in the region, will be very important in the operation,” explains Evan Ellis, Professor of Latin American Research at the U.S. Army War College’s Strategic Studies Institute.
The modus operandi: money
China’s foreign direct investment in Latin America has grown in recent years from $15 million between 2005 and 2009 to more than $79.8 million between 2015 and 2020, according to the LAC-China network monitor. Expert Evan Ellis goes further and dares to assure that foreign direct investment in the last 20 years already exceeds $173 billion, and that increased investment has not been China’s only economic strategy.
“China’s financial alliances in Latin America have made the Asian country become the number one trading partner of almost all countries in the region south of Costa Rica,” adds the expert.
Countries rich in energy resources such as Venezuela, Brazil, Ecuador and Argentina have received up to 137 billion dollars granted by the China Development Bank and the Export-Import Bank (Exim) of China until 2020.
“To maintain stability and survival in the region, you first have to create economic and technological dependence. That is China’s main modus operandi these days. America is a market that provides very rich resource extraction,” adds expert Miles Yu.
According to Yu, China’s approach to Latin America is one of “massive capital investment” intended to replace the role of dominant Western financial institutions such as the World Bank, the Inter-American Development Bank and even the International Monetary Fund.
Next, the expert warns, Latin America will play an important role “in China’s political and propaganda war and its global strategy”.
Experts argue that China already has advances in terms of electrical connectivity, digital connectivity, and presence in the port sector in Latin America, a region that is going through “one of the worst moments, both economically and in the performance of political governance and respect for institutions,” according to Pedro Burelli, an expert from the consulting firm B + V.
Another of China’s strategies in the region is “non-reimbursable cooperation”. Since 2020, China has kept loans to the region on hold. Now, it grants cooperation without return. In May 2021, China offered to build a stadium, a library, a water purification plant and a sanitation project in the coastal area of El Salvador.
In Costa Rica, it also offered $14 million in non-reimbursable cooperation for the modernization of the National Stadium. And another $24 million for social development projects.
The United States, vigilant
China’s strategy in the region has not gone unnoticed by Washington. A State Department spokesman told VOA that the United States does not oppose China’s investment in the region. However, it does “echo that the PRC’s actions respect local laws and interests, particularly on human rights.”
“As President Joe Biden has made clear, the United States and China should also work together where it is in our interests to do so, such as on climate change, global health, and food security. This is what the international community expects,” the spokesman said.
Honduras has been the latest Latin American country to ally with China. In view of the fact, the State Department considers that it is a “sovereign decision” of each country, but that the North American nation will continue to promote its long-standing “one China” policy, despite the fact that since 1978 the United States has established relations with China, which have been weathered with ups and downs.
This Special Report article was machine translated.