The Belt and Road Initiative in Latin America: How China Makes Friends and What This Means for the Region
This Latin American Focus Group article was co-authored by Lucas Chiodi and Thu Nguyen Hoang Anh of the EUI’s School of Transnational Governance.
On the 6th of February, Argentina decided to become an official member of China’s Belt and Road Initiative (BRI). Argentina is not the first country in Latin America to participate in the BRI; many other countries in the region have already joined.
Why did the Chinese government expand the BRI to Latin America? What are the regional implications? And are we going to see the United States and China competing for influence in Latin America?
Understanding China’s BRI
The Belt and Road Initiative was officially launched in September 2013. It is at the center of Chinese foreign policy under President Xi Jinping’s administration. BRI includes a web of investment programs that seek to develop infrastructure and promote economic integration within partner countries. Domestically, the BRI engages the Chinese economy and has been seen as a way for the Chinese Communist Party (CCP) and President Xi to build legitimacy. Internationally, President Xi has affirmed that the BRI is designed for win-win cooperation and the mutual benefit of China and participating countries, and that it seeks to promote multipolarity, economic globalization, and cultural diversification. There are five major priorities outlined in BRI, including policy coordination, infrastructure connectivity, unimpeded trade, financial integration, and connecting people. As of December 2021, 145 countries are part of the initiative.
Since its inception, the BRI has become a topic of heated debate. Its supporters argue that the BRI can help accelerate economic partnership, trade, and investment flows, which in turn boosts the economies of its participants. Nevertheless, many opponents criticize the BRI’s lack of transparency and the adverse effects that it may cause on the environment, in addition to the unsustainable debt risk associated withthe initiative. Western critics also interpret the BRI as a trojan horse to challenge Western hegemony and export the Chinese model of development.
A Late Arrival to BRI
Initially, the BRI was an attempt to bridge Asia and Europe via Africa and the Middle East. Latin America, therefore, was not considered as a part of the BRI in its earliest phases. However, in the past few years, Chinese leaders have signaled their increasing attention towards the region. Latin America was recently designated a new destination for BRI’s growing ambit, such as when then-President of Argentina Mauricio Macri joined the Belt and Road Forum in Beijing in May 2017.As President Xi told Macri, “Latin America is a natural extension of the 21st Century Maritime Silk Road.” Less than a year later, at the 2018 China – CELAC Forum, Chinese Foreign Minister Wang Yi again tried to engage Latin American countries on the subject of the BRI, successfully signing a “Special Declaration on the Belt and Road Initiative” in the end. As of December 2021, 20 out of 24 countries in the Latin America and the Caribbean region have signed and are participating in the BRI.
The reasons why China is expanding its presence in Latin America through the BRI are varied. First and foremost, Latin America possesses an abundant amount of natural resources and raw materials, an abundance which can meet China’s massive demand for crude petroleum oil, iron, and copper. Furthermore, amid increasing concerns over food security, agricultural goods from Latin America are also increasingly crucial for China; indeed, Brazil and Argentina have been two of the largest soybeans and oilseeds exporters to the country for decades. Apart from the need for resources, BRI’s expansion to Latin America can be explained by the need for a stable investment climate to reduce the risks posed by several African countries. As explained by an analysis from the Center for Strategic and International Studies (CSIS), in comparison to Africa, Latin America has more reliable judicial systems which can ensure investment contracts. Furthermore, due to its relatively large geographical area and population, Latin America is a potential market for China to export mechanical, electrical, and high-tech products.
Politically, China increasingly engages with Latin America in order to gain support from the region for its diplomatic policies and initiatives, as well as address existing anti-China sentiment and promote a more favorable image of the country overseas. Latin America also plays a crucial role in China’s effort to isolate Taiwan, an island country that China sees as a breakaway province. Eight of Taiwan’s 14 remaining diplomatic partners are in Latin America and the Caribbean, driving China’s plans to lure Taiwan’s allies through economic agreements and the BRI. China’s plan seems to be succeeding, given just last year Nicaragua severed relations with Taiwan, pivoted to China, and joined the BRI.
Implications for Latin American Countries Joining the BRI
Relations of the great majority of Latin American countries with the BRI have been characterized by vacillation, ranging all the way from complete indifference and skepticism to enthusiastic devotion. How permissive is it for them to integrate with China? Is it possible that they converge in a coordinated strategy towards the BRI, if not at the regional level, at least at the subregional ones? What issues and topics could be advanced with China, and with what intensity? What benefits and costs are associated when dealmaking with an assertive rising power that challenges an established power that is managing its gradual and relative decline but actively influences inter-American relations? These dilemmas form a common currency for Latin American scholars and policymakers nowadays.
For several years now, countries in the region have been forming a complex scenario marked by sociopolitical uncertainty and a fragmenting diplomatic landscape. As authors such as Luis L. Schenoni andAndres Malamud have argued, the region suffers from a “growing irrelevance” in the international system. The relative loss of significance is explained by structural and behavioral components that can be empirically contrasted with the poor performance of multiple regional indicators in recent years.
Although the framework for the action of the Latin American countries should not ignore the thesis of relative regional irrelevance, neither should it submit to the temptation of inaction. The question then becomes which strategies Latin American countries could pursue towards the BRI in a region that participates directly or indirectly in the systemic geopolitical competition between China and the United States.
Two Grand Strategies and an Emerging BRI Consensus
The debate on the possible strategies that the region’s countries should pursue within the framework of a systemic rivalry between great powers is diverse and profuse. Russell &Tokatlian’s compelling work entitled “Grand Strategy” is a solid contribution to a better understanding of the “two logics” that have guided Latin American foreign policies throughout its history, with both grand strategies based on the subordinate condition of Latin America in the international system. The first, the logic of autonomy, aims to increase the capacity to make decisions independently on multiple issues (trade, quest for peace, votes in international institutions, etc.). The second logic is one of acquiescence, where countries assume and consent their subordinate condition to the US sphere of influence. Maintaining support from the United States for achieving material or symbolic gains is a core aspect of this logic.
Thus, thinking about China’s growing influence in the region necessarily implies interpreting the actions and decisions of Latin American administrations in a continuum between these two strategies. And it is just as important to understand that Latin American countries’ relations with China imply considering issues that, in essence, respond to conjunctural, historical, geographical, and systemic factors intertwined with the United States.
While Washington is concerned about the advance of BRI in Latin America, given the integrated nature of US relations with Mexico and the geographical proximity with Central America and the Caribbean, it has demonstrated that, in fact, this is an issue of grave significance. As Reagan’s Permanent Representative to the United Nations Jeane Kirkpatrick once noted, “Central America is the most important region in the world”.
The recent statement by General Laura J. Richardson, Commander of the United States Southern Command (SOUTHCOM), on 8th of March 2022 before the 117th Congress of the United States gave a comprehensive account on the pressing challenge that Washington is facing in this subregion. The statement observes with dismay Chinese advances in the Panama Canal and other 21 major critical infrastructure projects, which fit naturally with China’s BRI vision. But it is also worried about PRC investments in strategic infrastructure, systematic technology, and intellectual property theft in countries such as Venezuela, El Salvador, Nicaragua, Cuba, and even Costa Rica. Moreover, it is worth noting that Cuba became the latest country to join the initiative, while Jamaica joined in 2019, as did six other island nations in the Caribbean, and Costa Rica joined in 2018. For their part, Panama, El Salvador and Nicaragua have all switched diplomatic recognition from Taiwan to China since 2017.
Due to the complexity of the current context, a natural and inevitable choice for Latin American countries is the expansion of the geographic scope of foreign ties beyond traditional hemispheric and transatlantic relations. China is a critical partner for improving economic and social indicators through investments and loans in multiple sectors. A major challenge for the region is its serious infrastructure gap that is seen as a key factor in economic underperformance. Therefore, given the BRI’s emphasis on infrastructure connectivity, it is not surprising that it is seen as a major potential benefit from LAC participation.
Although some countries have not signed the BRI, Argentina’s recent accession could lead to a coupling of countries such as Mexico and Brazil. In fact, a number of countries have bet heavily on strengthening their relations with China beyond the historical ties they have had with the United States and beyond the political party lines that govern. Avoiding crossing red lines that might displease Washington, the advances in relations with China under President LacallePou in Uruguay, former President Piñera in Chile, and even in Brazil under Jair Bolsonaro, are paradigmatic examples in this regard.
In this vein, a recent piece published in Foreign Affairs by Brian Winter argues that there seems to be an emerging consensus on which many Latin American politicians might agree. It is worth quoting “…in the escalating global confrontation between China and the United States, their countries should pursue a truly independent or nonaligned path. This posture, which appears set to deepen following elections this year in bellwether giants Brazil and Colombia, is arguably the region’s most important foreign policy development since the end of the Cold War.”
Today, China is no longer limited to trying to fill “empty spaces” in the region. While it tries to avoid overt friction with the United States in its sphere of influence, its relationship with Latin America goes beyond mere commercial engagement. The China-CELAC Joint Action Plan for Cooperationtargeted areas for increased cooperation across the political and cultural realms, economics, sciences, technology, infrastructure, etc., for the 2022-2024 period. Furthermore, according to a suggested article by Nicole Jenne, the development of different forms of security cooperation between China and South American countries indicates the quality of relations with some of the countries.
In short, Latin America will continue to deepen ties with China in the coming years. On the Chinese side, the region is of increasing importance in both economic and political terms. Not only does it provide natural resources and a productive environment for trade and investment, but it also helps China increase sphere of influence and achieve certain political goals. In the foreseeable future, China will continue to use the BRI as a tool to build or deepen relationships with countries in the region.
On the Latin American side, formal participation in the BRI could increase the relative costs and benefits depending on the specific issues on which countries in the region decide to move forward. To a greater or lesser extent, many countries, at least in rhetoric, understand that maximizing benefits requires proceeding cautiously to better understand the interests at stake for both Washington and Beijing. Deciphering the specifics of cooperation through proactivity and prudence are pillars that mark – orshould mark – thediplomacy of countries in a very diverse and complex region.