The Strategy Behind China’s Rising Influence in Latin America

In January 2015, leaders of the Community of Latin American and Caribbean States (CELAC), a 33-country bloc, gathered in Beijing to participate in the first ever China-CELAC Forum. During the forum, China’s President Xi Jinping pledged to invest $250 billion in Latin America over the next decade—an initiative perceived by many as signaling China’s economic and geopolitical strategy towards Latin America, and also as a Chinese encroachment into America’s backyard.

In “China’s Strategic Partnership with Latin America: A Fulcrum in China’s Rise,” Lei Yu analyzes the logic and rationale behind this Chinese strategy. He states that China’s efforts to foster a strategic partnership with countries in Latin America not only reflects its desire to intensify economic cooperation and political relations with the region but also reflects its strategic goal of enhancing Chinese “hard” and “soft” power there in order to elevate China’s position in the global power hierarchy.

Latin America is a top priority under President Xi Jinping’s foreign policy agenda. During his 2013 and 2014 visits to Latin America, Xi proposed a deepening of Chinese-Latin American cooperation through the joint formulation of a plan that aims to increase bilateral trade, China’s investment stock, defense cooperation, and military sales to Latin American states. However, to some extent, this focus is merely a furtherance of long-standing Chinese policy. In the late 1990s, under President Jiang Zemin’s “going-out” strategy, resource-rich Latin American countries became primary Chinese strategic partnership targets in China’s attempt to tap into a vast pool of overseas resources and markets. From 2001 to 2014, China’s trade with Latin American countries rose from $15 billion to $260 billion, and free trade agreements were signed with Peru and Costa Rica.

Lei Yu identifies four main economic and geopolitical incentives behind the Chinese-Latin American strategic partnership. First, Latin America is a prime target for Chinese manufactured goods and investment money. China’s dependence on the markets in advanced economies could leave its economy vulnerable if the advanced economies go through another economic downturn. Second, China’s involvement in Latin America has been viewed by Chinese policymakers as a convenient avenue for expanding the role of China’s currency in international markets. Third, China needs access to Latin America’s natural resources, especially in the energy and mineral sector, to sustain its future growth. Finally, Latin America represents a major geopolitical arena for diplomatic competition with Taiwan and power balancing with the United States. As such, by deepening ties with Latin American countries, China will not only achieve greater diplomatic recognition in the region but can also attempt to counter the United States’ “Pivot to Asia,” which is largely viewed by Chinese policymakers as a containment strategy targeted against China.

According to Lei Yu, whether China can reap geopolitical dividends from its large-scale involvement in Latin America remains unclear. China’s growing involvement in the region has already raised concerns in the United States with politicians calling for a US response. General Bantz Craddock, the former head of the US Southern Command, warned that China’s presence in Latin America is “an emerging dynamic that cannot be ignored.” Lei Yu adds that China has not been universally welcomed by host countries due to a growing concern about the “neo-colonial” pattern of Chinese trade relationships and the ways in which China’s noninterference and mercantilist approaches have historically served to increase corruption and worsen class disparities. For example, President Enrique Peña Nieto of Mexico recently cancelled a $3.6 billion high speed rail contract awarded to a Chinese-led consortium over concerns of a possible conflict of interest.

The importance of China’s strategic partnership with Latin America should not go unnoticed by US policymakers. Lei Yu states plainly that China’s relationship with Latin America is, in part, driven by similar strategic rationales that have governed the United States’ foreign policy in Asia. The geopolitical implications of this partnership are critical for the understanding of global power dynamics. Whether this partnership will foster regional cooperation or serve to destabilize the region through conflict with the US is still unclear.

Article Source: Yu, Lei. “China’s Strategic Partnership with Latin America: A Fulcrum in China’s Rise.” International Affairs 91(5), 2015.

Featured Photo: cc/(Anne Roberts)