With this objective in mind, China consolidated a new pact with leaders from Latin America and the Caribbean, aiming to deepen ties in practically all sectors of society, an initiative that some analysts see as a strategy of regional “domination”, according to an article from the Daily Mail newspaper  . The current scenario is diametrically opposed to that of 20 years ago, when Chinese economic and political presence in the Americas was minimal.

Under this agreement, Beijing committed to providing the region with nuclear technology for civilian use, collaborating in the development of peaceful space programs, implementing  5G networks  – despite warnings from Washington about possible uses for espionage, such as  Huawei  – and offering loans low interest rates and financing for ambitious development projects.

The commitment of the Asian giant.

Furthermore, the Asian giant is committed to building schools and supporting courses that promote the teaching of Chinese language and culture, such as the  Confucius Institutes , public educational and cultural promotion programs maintained by the Chinese International Education Foundation. However, such initiatives  have been criticized  in countries such as the USA and the United Kingdom, due to suspicions that they promote  state propaganda  and restrict academic freedom.

Aside from cultural influence, China continues to lead trade with major economies in Latin America, including  Brazil , Chile and Peru. Analysts project that this trend will continue, with the volume of trade between China and Latin America doubling over the next ten years.

Chinese products are increasingly popular in the region due to their affordable prices, ranging from cars to electronics. Recently, automakers such as  BYD  and  GWM  announced projects in Latin America, with emphasis on Brazil, such as the production of batteries by  BYD  in the Manaus Free Trade Zone.

However, according to the  Deutsche Welle  (DW) network, the trade relationship is unequal, with Latin America mainly supplying raw materials to China, such as iron, aluminum and tin. For example, Chile recorded an export surplus of around 10 billion dollars with China in 2021, driven mainly by exports of copper and cherries from the Andes. However, Chile does not represent a significant market for the Chinese economy in terms of imports.

Cooperation

In 2022, China and CELAC, an alliance of Latin American and Caribbean states covering almost all countries in the region, including major players such as  Brazil ,  Argentina , Colombia, Venezuela, Uruguay and Chile, signed a comprehensive agreement called “ Joint Action Plan for Cooperation in Key Areas ”. The pact outlines relations between the countries involved until 2024, focusing on cooperation between governments, banks, companies and educational institutions.

Although it contains general commitments, such as preserving the environment and promoting sustainability, certain aspects draw attention. One of them is the exchange of  nuclear technology  and the development of practical projects in this area, including the training of nuclear scientists. Although the agreement emphasizes the peaceful nature of these initiatives and promotes nuclear disarmament, it raises concerns due to the possibility of dual use of nuclear technology.

The growing presence of Chinese companies in the defense sector also worries Washington, especially with regard to nuclear cooperation in South America.

China’s commitment to developing space programs for the “peaceful exploration of space” also raises concerns, according to the  Daily Mail article . In the past, Beijing has tried to disguise the launch of  spy satellites  as “communications” ships and denied accusations of testing a hypersonic orbital nuclear bomb, claiming it was a civilian spacecraft for the “peaceful exploration of space”.

US seeks rapprochement

Meanwhile, Washington, which traditionally had these countries as its “backyard”, is seeking to intensify its investments in the region to face the expansion of its main economic rival after a period marked by a problematic lack of attention to the region – since assuming office. office in 2021, President Joe Biden only made one trip to the region, and, from 2017 to 2020, then-President Donald Trump also only appeared here once to participate in the G20 summit in Argentina, recalled the Newsweek magazine  .

Now the atmosphere is different, as Latin America’s energy potential has gained prominence on the international scene, making it a priority for the West.

There is a race to recover losses. While the United States has decreased its involvement in the region, China has strengthened its trade ties and infrastructure investments, taking advantage of the large market and abundant natural resources.

Countries like  Mexico  have a strong place in the White House’s ambitions, according to experts interviewed by  DW  Christopher Garman, executive director for the Americas in Eurasia, and Julia Thomson, researcher at the same consultancy, benefiting from their proximity to the USA and the nearshoring strategy  , which seeks to guarantee the supply chain in allied countries closer to consumer markets.

In the American Congress, the US investment bill is advancing, which seeks to strengthen  nearshoring  in Latin America with an investment of US$ 14 billion and tax reductions. Meanwhile, US Commerce Secretary Gina Raimondo is considering including Brazil in investments in semiconductors. However, former Brazilian ambassador to China, Marcos Caramuru, expresses skepticism about the US’s ability to compete with Chinese investments in the region, pointing to differences in each country’s business model.

Asia and the Pacific

This ongoing geopolitical tussle also occurs in the Asia and Pacific region, where local populations may find themselves both benefiting and negatively impacted by this dispute between the two powers.

Chinese political and cultural influence in the region is particularly marked in countries such as Cambodia, Laos and Pakistan, where Beijing has made large investments in infrastructure, energy and transport projects. While these investments have boosted economic growth in these countries, creating jobs and improving infrastructure, they have also increased their dependence on China.

In Cambodia, in Sihanoukville, in the Gulf of Thailand, a strategic position in the Indo-Pacific, a military base capable of accommodating any ship of the PLA Navy (People’s Liberation Army), including its new Type 003 aircraft carrier,  is under construction .

In Laos, the New Silk Road  (BRI)  initiative  , the China-Laos railway , valued at US$5.9 billion, brought the small country closer to its goal of having access to the sea, even though it does not have a coastline. . However, nearly two years after the railway opened in December 2021, the economic benefits of this investment have not been equally distributed. Some of the less favored classes have problems, particularly farmers. Furthermore, the country’s debt soared.

In Pakistan, there is the  port of Gwadar , a project also financed by the BRI. The  China-Pakistan Economic Corridor  is another ambitious project. However, Chinese citizens have regularly been targeted by Baloch separatists. The rejection of China is linked to the  commercial relationship  between Beijing and Islamabad, which includes a series of   Chinese infrastructure projects in Balochistan, part of the New Silk Road.

In terms of economic impact, Chinese investments have been an important source of financing for many countries in the region, but they have also raised concerns about growing debt and the possibility of a “debt trap”. Furthermore, competition with often cheap Chinese products has harmed local industries in some countries, resulting in job losses and trade imbalances.

The BRI, in fact, changed its focus and has increasingly invested in rescuing indebted partners. In a kind of “bite and blow”, the priority now is to use the money to  rescue countries that have fallen into debt  due to the Chinese initiative itself. The big problem for Chinese creditors is that many debtors are insolvent or lack liquidity, and late installments have already started to appear. Institute  AidData  calculates that “80% of China’s foreign loan portfolio in the developing world currently supports countries in financial distress.”

Washington chases losses

It’s not just Latin America. The Asia and Pacific region is also  the hot spot for the North American government , which has been making efforts to contain China’s growing influence. Last week, Washington reinforced its commitment to the defense of the  Philippines , as animosity between the country and Beijing grows. At the same time, it approved a law that will grant billions of dollars in financing to three small island nations with strategic importance that were being seduced by the Chinese.

In both cases, the US government has made it very clear that its concern is with Chinese aggressiveness, both in the military and diplomatic spheres. And losing this race is not an alternative.

The Philippine issue is  more delicate  and could have developments in the short term, with Manila and Beijing in dispute over the lucrative waters of the  South China Sea . Incidents involving vessels from both countries have been accumulating   , from fishing boats to Coast Guard ships.

The Philippine issue, however, is not the only one that has required frequent US intervention in the region. A parallel concern is China’s increasing presence in the island nations of the Indo-Pacific, signing investment and security agreements that are of most concern to neighboring nations, such as  Australia  and  New Zealand .

In order not to lose even more space, the North American Legislature approved last week a law that offers US$7.1 billion in investments, over 20 years, to Palau, Micronesia and the Marshall Islands, three small island nations that had been suffering pressure to accept similar proposals from Beijing.

Source: areferencia