By: Staff Writer
August 18, 2023
The People’s Republic of China’s (PRC) authoritarian regime is fueling its penetration of the Latin American and Caribbean region, says the Council of the Americas (AS/COA).
In a recent report, the AS/COA said that China’s growing economic and political influence in Latin America and the Caribbean (LAC), amplified by the COVID-19 pandemic, suggests a need to investigate the wider impact of their foreign relations with the LAC.
The report also said: “China’s relationship with LAC is long-term given regional requirements for investment capital and mutual trade interests. Despite the relative newness of China’s intentional engagement, i.e. barely 20 years, China has rapidly become the top trade partner for most of South America and a significant and growing investor throughout LAC, particularly across sectors and nations identified by Beijing as strategic. It is unrealistic to suggest that China’s desire to continue expanding ties with the region will wane, or that the region itself would desire or work toward such an outcome.
“World Bank projections suggest near-term regional economic performance below what is required for sustained post-pandemic recovery. Debt loads have increased; China is the largest holder of sovereign debt. Yet, LAC is richly blessed with natural resources, including critical minerals such as copper and lithium, which have become strategic in the context of energy transition and climate change mitigation, and which China and others increasingly desire. Meantime, the region suffers from a significant deficit of infrastructure and other investment even as popular expectations are increasing, pressuring governments to deliver a better quality of life despite restricted resources.
The report added: “China gains economically by engaging meaningfully with LAC, but Beijing’s ambitions for the Americas go well beyond a self-interested desire for economic benefits. This mirrors a broader approach to emerging markets globally. The goals are wide-ranging, integrated, and open-ended, including the cultivation of political leverage that can be deployed when needed. At the same time, Chinese capital is ubiquitous and comes without the inconvenient conditionality that can accompany capital from democratic societies. It may even undermine regional development priorities. Nonetheless, it is often difficult for political and business leaders in recipient nations to resist its allure.”
China has also broadened its economic agenda with its increasingly potent political agenda as it seeks to weaken democratic LAC states in an attempt to mould them to the wishes of the PRC’s demands.
It also said: “Strategic investments are ultimately directed by China’s political leadership and engagement brings certain practices. A lack of transparency in contracts, for example, helps circumvent international financial regulations, facilitates the transfer of illicit funds, undermines environmental, social, and labour standards, and erodes democratic values. In such circumstances, at a minimum, corruption can flourish while the rule of law diminishes, but the impact is often more significant including democratic deterioration and eroding sovereignty.
“With economic dependence comes political leverage which Beijing uses effectively. From agreements that burden nations with increased indebtedness to cancelling commodities contracts for political reasons to secret investment agreements and protocols to outright payoffs and bribes, authoritarian capital targets elites who have the ability to make decisions and take actions that China finds convenient on such issues as Taiwan, universal human rights, and the promotion of global governance reforms. It’s a high price to pay in return for a road, port, or space station.”
The COVID-19 pandemic has weakened the region to the point that the PRC’s help is not only needed but desperately sought after as they continue to buy influence with the LAC’s leaders.
The report noted that the US must up its investment in the region if it wants to compete with the PRC’s growing influence. Greater appreciation for the region’s importance for U.S. interests, and urgency in helping to meet regional needs, would be both strategic and wise.
The key is not to isolate China, if such were even possible, but to increase Western economic and political engagement with the region to show the tangible value of enhanced relations with Western partners. Emphasis must also be placed on strengthening democratic institutions at the local, national, and international level to channel Chinese engagement appropriately, including a better understanding of the implications of such investment and a clear-eyed view of the true costs associated with authoritarian capital.