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There Goes the Neighborhood: US Hegemony in the Hemisphere in an Era of Great Power Competition

There Goes the Neighborhood: US Hegemony in the Hemisphere in an Era of Great Power Competition

By Paul J. Angelo, Fellow for Latin America Studies, Council on Foreign Relations
October 26, 2020

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At the 2018 United Nations General Assembly, U.S. President Donald Trump boasted, “It has been the formal policy of our country since President [James] Monroe that we reject the interference of foreign nations in this hemisphere.” In 1823, Monroe was referring principally to Western European powers whose imperial designs knew no geographic bounds, but today the president’s concerns are not a navel-gazing Britain or a cash-strapped Spain but, rather, a new pair of governments that seeks to test U.S. hegemony in the region: China and Russia. Globally, both nations have exhibited a capacity to compete against and even threaten U.S. interests in a variety of arenas — from trade to U.S. elections security. In addition, while the global order has not yet returned to the zero-sum rivalry of the Cold War, U.S. policymakers have begun to craft a foreign policy that understands the permanence of economically and militarily prominent competitors.

Taking advantage of the proliferation of anti-U.S. governments in Latin America in the first decade of the 21st century, China and Russia have focused on deepening economic ties within the region, while quietly expanding their military footprints. And although the Monroe Doctrine has inspired more hostility than favor in Latin America, Washington has good reason to be concerned about extra-regional designs south of the U.S. border.

China: diplomatic and economic expansion, geopolitical restraint

As a rising China entered the 21st century with strong GDP growth and a preeminent position within global supply chains, Beijing sought to increase its presence in Latin America. In 2004, China became a permanent observer to the Organization of American States and in 2009, joined the Inter-American Development Bank. By 2015, China declared its intention of growing trade with the region to more than $500 billion per year, and as of 2020, 18 of the 33 countries in Latin America and the Caribbean have signed onto the country’s Belt and Road Initiative, a global infrastructure development strategy in which all roads lead to Beijing.

Clerks stand at a display of goods at a “Belt and Road Products New Year’s Marketplace” at a shopping mall in Beijing, January 10, 2020. (Photo: Associated Press)

Indeed, trade and infrastructure investment have become China’s top priorities in the Western Hemisphere. In this realm, China holds a distinct advantage over other industrialized nations, including the United States, thanks to the public sector’s heavy hand in the country’s economy. Whereas the private sector in the United States tends to negotiate foreign investment in infrastructure and services provision, China offers public investment and financing at advantageous rates. Moreover, whereas U.S. companies are bound to U.S. laws mandating compliance with anti-corruption and human rights standards, China has proven agnostic toward many governance considerations.

In Latin America, where corruption is rife and where public officials are often frustrated by U.S. aid and investment conditionality, China’s no strings attached negotiating posture gives it an unmistakable edge. Even in countries historically aligned with the United States, such as Colombia and El Salvador, Chinese consortiums signed investment deals in 2019 to construct the first line of Bogotá’s fabled metro and to enhance Salvadoran tourist infrastructure, awarding Chinese firms preferential rights to commercialize the country’s coastline. Not surprisingly, just one year prior, El Salvador, like Panama and the Dominican Republic before it, declared its unequivocal recognition of “one China,” abandoning decades of economic and diplomatic collaboration with Taiwan. As an expression of gratitude for this diplomatic reversal and to the chagrin of Taiwan’s number one ally, the United States, Beijing responded with “giant, non-refundable cooperation.”

Meanwhile, pro-China sentiments have surged across the region, especially as China’s media presence and cultural and educational exchange programs have expanded. In Chile, another close economic partner of the United States, a staggering 77 percent of citizens hold a positive image of China, while 61 percent express similar feelings about the United States.

Chinese activity in Cuba, Venezuela, and Nicaragua, referred to as the “troika of tyranny” by the Trump administration, is mostly limited to providing economic relief to nations sanctioned by the United States. Chinese plans to construct a canal through Nicaraguan territory to rival its Panamanian counterpart have faltered due to insufficient financing, but in Cuba, China has provided billions of dollars of debt relief and became the island’s number one trading partner in 2017. In Venezuela, China delivered more than $60 billion in financing from 2007 to 2017, which is at present being repaid with oil exports. Although China initially complied with U.S. sanctions against the Venezuelan oil industry by zeroing its imports of Venezuelan crude in August 2019, the last months of 2019 saw renewed activity and debt repayment to China.

China remains an important economic lifeline for the region’s pariah governments, but the country has refrained from provocative military displays in the hemisphere. The Chinese government may have assumed this posture as a way of modeling great-power conduct for the United States, whose military dominance in Asia has frustrated China in its effort to carve out a sphere of influence in the Western Pacific. Nonetheless, Chinese military sales have increased precipitously over the past decade, creating new opportunities for China to train and equip partners in a region so essential to U.S. notions of national and homeland security. For the time being, China will continue to push up against the limits of U.S. hegemony in Latin America and the Caribbean, but China calculates that it has far more to gain by exerting quiet persuasion in lieu of military might.

Russia: perception makes reality

Like China, Russia capitalized on shifting political winds in the hemisphere in the 2000s to increase its presence in the region through trade, propaganda, and military sales and training. However, unlike China, Russia has used its clout to antagonize the United States from allied outposts like Cuba and Venezuela. Given the long history of U.S.-Soviet competition, Russian meddling in the hemisphere is not unfamiliar to the United States, but at such a low cost and minimal risk, the Russian government is likely to continue projecting power in Latin America, especially to the extent that the United States sustains interventions in places within Russia’s orbit, such as Ukraine and Syria.

Russian President Vladimir Putin’s strategy has built on an enduring military relationship between Cuba and Russia dating back to the Cuban Missile Crisis. After a brief lapse in security cooperation between the two countries in the early 2000s, Russia reinvigorated its bilateral ties with Cuba to collect intelligence, sell arms and military technology, and enhance cyber protections from U.S. infiltration. Russian military exercises, ship visits, and counternarcotics operations in Cuba and Nicaragua have also increased over the past decade, and trade between Cuba and Russia surged 34 percent to $388 million from 2017 to 2018. Likewise, Russian exports of weapons and military equipment have armed the security forces of authoritarian regimes like Cuba, Nicaragua, and Venezuela, while competing with U.S. arms suppliers in friendlier markets such as Peru, Mexico, and Brazil.

More crucially, though, Moscow has hedged its bets in Nicolás Maduro’s Venezuela, where billions of dollars in loans provided by the state-controlled oil company Rosneft have rescued the nation’s flagging oil industry. Rosneft holds a 49 percent stake in Citgo, the U.S.-based, Venezuela-owned refining corporation, and the Russian company continues to maintain essential industry machinery while exporting Venezuelan crude. As these exports take place as debt repayment, Russia has sidestepped U.S. economic sanctions against Venezuela’s oil sector and is even suspected of helping Caracas create the Petro, a cryptocurrency that Maduro hopes will prop up his failing economy and pariah administration. Moscow’s financial and diplomatic support for Maduro has been essential to the regime’s survival, especially after 57 countries around the world severed diplomatic relations with Maduro’s government in 2019.

In a provocative gesture that fueled perceptions of a renewed U.S.-Russian geopolitical competition in the hemisphere, Putin sent two military planes with dozens of Russian military advisers to discuss strategy, equipment maintenance, and training with their Venezuelan counterparts in March 2019; this occurred just days before a U.S.-supported opposition staged an uprising aimed at ousting Maduro.

Above all, the greatest threat to U.S. interests in the hemisphere may be Russia’s ability to shape regional perceptions through information operations. Russian state presence on social media and the export of state-controlled news networks to Latin America float competing narratives in ways that fuel anti-U.S. sentiment and polarize democratic societies, such as in the 2018 Mexican and Colombian presidential elections. In this way, the Russian government has secured an outsized role in Latin America and established itself as a major competitor to the free-market, open-governance model long espoused by the United States in the region.

The Hemisphere pushes back

Notwithstanding increasing Chinese and Russian interest in the Americas, there are a number of reasons to expect that the region will proceed cautiously in its dealings with extra-regional actors. First, commitment to democracy across Latin America and the Caribbean remains high, and many of the hemisphere’s inhabitants are skeptical of the authoritarian development model pushed by China. Taking note of Chinese investments gone awry in Asia and Africa, Latin Americans are aware of the potential for a Chinese “debt trap” or public corruption, and throughout 2019, protesters across Latin America clamored not for a deepening of autocracy but rather fuller participation in democracy and a rejection of corruption. Furthermore, the growing threat posed by climate change to some of the hemisphere’s most vulnerable people has inspired an environmental protection movement in many countries. In Latin America, China and Russia will no doubt confront obstacles to the kind of development that has proven profitable but ecologically costly and unsustainable elsewhere. Moreover, the coronavirus pandemic and the global economic recession stand to constrain government coffers in Beijing and Moscow, slowing the expanding footprint of the world’s great powers in the Western Hemisphere.

In this context, the United States and its partners in Latin America and the Caribbean can find common cause, rooted in a shared history and geography, and should double down on defending democracy, endorsing sustainable development, expanding trade links, and coordinating a pandemic response. For these are the planks that will ensure not only peace but also prosperity for the Americas as they navigate a century that, not unlike the previous ones, will be marked by risk and opportunity created by competition among the world’s great powers.