China's Rising Influence in Latin America and U.S. Response

#97 China’s Rising Influence in Latin America and U.S. Response

Unpack the geopolitical intrigue as we delve into China’s expanding influence in Latin America and the U.S.’s strategic dance to counter it. From trade to military ties, we explore the complex relationships shaping the region.

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EPISODE INTRO

Cold Opening:

While the United States has long been the largest trading partner for Latin America, China has quietly emerged as the region’s top economic ally. According to the World Economic Forum, trade between China and Latin America has skyrocketed, growing 26-fold from $12 billion in 2000 to a staggering $315 billion in 2020.

Experts predict that this economic dance is far from over, projecting that the trade figures are expected to double by 2035, reaching a monumental $700 billion. But the real story lies not just in the numbers, but in the strategic moves being made.

Intro:

What is going on everyone? I’m Kevin Muñoz. Today is Tuesday, January 9th Welcome to The LEO podcast, and happy new year to all. Those of you who are listening to this podcast for the first time can expect insightful discussions on diverse educational topics, with a focus on Latin American issues.

Now, before we dive into these compelling stories, a quick shout-out to our fantastic supporters at patreon.com/latinamericaneo. If you want to unlock bonus content and help us keep the episodes coming, join our Palomitas community!

Don’t worry if you’re not a patron yet; you’re still in for a treat with this episode. Packed with great content, so just sit back, relax, and enjoy today’s show!

KEY POINTS OF EPISODE

Segment #1: The Rise of China in Latin America

Our topic today concerns China’s growing influence in Latin America. Everything from economic ties, investments in space exploration, and even military partnerships. Yep, you heard it right!

China has rapidly become South America’s top trading partner, surpassing the United States. They’re not just trading buddies; they’re investing heavily in energy, infrastructure, and even the space sector through the Belt and Road Initiative.

But, and there’s always a but, the U.S. isn’t sitting on the sidelines. President Joe Biden, seeing China as a strategic competitor, is aiming to boost economic cooperation in the region. Will it be enough? Well, that’s the million-dollar question.

But for now, let’s hop into the time machine and explore China’s history with Latin America. Did you know that ties date back to the 16th century? It wasn’t all business back then; it started with the exchange of porcelain, silk, and spices between China and Mexico. By the 1840s, hundreds of thousands of Chinese immigrants were being sent to work as “coolies,” or indentured servants, in Cuba and Peru, often on sugar plantations or in silver mines.

Over the next century, China’s ties to the region were largely migration-related as Beijing remained preoccupied with its own domestic troubles. Fast forward to today, and we’ve got cultural, economic, and political ties that run deep.

But, it wasn’t until China joined the World Trade Organization in 2001 that the relationship really took off. Today, countries like Brazil, Cuba, Paraguay, and Venezuela boast some of the largest Chinese diaspora communities in the region.

If we’re talking dollars and cents, or rather yuan and pesos. In 2000, China accounted for less than 2% of Latin America’s exports. Fast forward to 2021, and trade hits a whopping $450 billion, a figure that remained largely unchanged in 2022, and some economists predict that it could exceed $700 billion by 2035. That’s more than a threefold increase! And while the United States is Latin America’s largest trading partner, China remains South America’s top trading partner dealing in soybeans, copper, petroleum, and other raw materials that the country needs to drive its industrial development. In return, the region mostly imports higher-value-added manufactured products.

Critics argue that this trade dynamic undercuts local industries with cheaper Chinese goods, and there’s growing concern about economic dependency. Venezuela, in particular, is swimming in Chinese loans like Scrooge McDuck in his money bin.

And we’re only just getting started. What about China’s political interests in the region? Well, they’re not just here because we have delicious food. China is playing the long game, aiming to expand its sphere of influence. Enter “South-South cooperation,” a fancy term for aid, investment, and trade.

China’s also cozying up to Latin American governments, signing comprehensive strategic partnerships with countries like Argentina, Brazil, and Venezuela. Since former Chinese President Jiang Zemin’s landmark thirteen-day tour of Latin America in 2001, there have been dozens of high-level political exchanges. President Xi Jinping has visited the region at least eleven times since he took office in 2013. In addition to several bilateral agreements with countries in the region, China has signed comprehensive strategic partnerships—the highest classification it awards to its diplomatic allies—with Argentina, Brazil, Chile, Ecuador, Mexico, Peru, and Venezuela.

Another major factor is Taiwan. China’s push to isolate Taiwan has led to some diplomatic reshuffling in Latin America. With Beijing refusing diplomatic relations with countries that recognize Taiwan’s sovereignty, Latin America’s support for the island has dwindled in recent years; only seven countries in the region still recognize it. In 2023, Honduras became the latest to switch diplomatic allegiance to Beijing after Taipei denied the country’s request for billions of dollars of aid. Other recent flips include the Dominican Republic and Nicaragua. Experts say the remaining holdouts, such as Haiti, are facing increased pressure.

Now, let’s shift gears to security ties. It’s not just about trade and cultural exchanges; it’s about arms sales, military exchanges, and training programs. Venezuela is rocking Chinese military hardware, Between 2006 and 2022, Beijing reportedly exported some $629 million worth of arms to Venezuela. Other countries like Argentina, Bolivia, Ecuador, and Peru have hopped on the bandwagon as well. China even participated in a UN peacekeeping mission in Haiti that began in 2004, including deploying more than one hundred riot police to the country.

And then there’s the COVID-19 pandemic. Enter China’s “COVID-19 diplomacy.” China swoops in, distributing medical equipment, offering loans for vaccine purchases, and investing in local vaccine production. They’ve delivered over 400 million vaccine doses to Latin America. But, of course, there are strings attached. Some countries like Honduras and Paraguay claim they faced pressure to renounce their recognition of Taiwan in exchange for vaccine doses.

Some analysts suspected that China was also using its vaccine leverage to push for the expansion of Huawei, the controversial Chinese telecommunications giant. In Brazil, regulators reversed an earlier decision to bar Huawei from developing the country’s 5G networks weeks after China provided Brasília with millions of vaccine doses, despite U.S. warnings against using Huawei equipment, which policymakers say leaves countries vulnerable to cyber threats from China.

And let’s not forget about energy, infrastructure, and space exploration. Between 2000 and 2018, China invested $73 billion in Latin America’s raw materials sector, including building refineries and processing plants in countries with significant amounts of coal, copper, natural gas, oil, and uranium. And a keen interest in the Lithium Triangle countries—Argentina, Bolivia, and Chile together, the triad contains roughly half of the world’s known lithium, a metal necessary for the production of batteries.

However, these Chinese-led infrastructure projects are raising environmental and social concerns. And let’s not forget about China’s growing presence in the space sector. They’re setting up shop in Argentina’s Patagonian Desert and have satellite ground stations in Bolivia, Brazil, Chile, and Venezuela. Their proximity to the United States has heightened fears that they could be used to spy on U.S. assets. Spy games, anyone?

Now flipping the script a little bit it’s hard not to mention what the United States thinks about all this given its history with China. However, while China’s been waltzing into Latin America, the U.S. hasn’t been twiddling its thumbs. President Biden’s got his eyes on the prize, pledging to counter China’s influence in the region.

Some experts argue that the U.S. needs to step up its game, especially in the economic arena. China’s influence is no joke, and it looks like Uncle Sam will be looking to flex some diplomatic muscle.

CLOSING REMARKS & EPISODE SUMMARY

Well, folks, that’s a wrap for today’s episode on the LEO Podcast. We’ve taken you on a journey through the intricate dance of geopolitics, where China, Latin America, and the U.S. are trading moves, investments, and the occasional diplomatic tango.

If your brain feels a bit more loaded with international affairs than it did before, don’t worry—that’s just the LEO Podcast effect. We aim to keep you informed, entertained, and maybe throw in a few curveballs along the way.

Remember to stay tuned for more episodes covering the twists and turns of global events. If you enjoyed this episode, give us a virtual high-five by hitting that subscribe button. And hey, sharing is caring, so tell your friends about the podcast that breaks down news like nobody else.

Episode Summary/ Conclusion:

Closing Remarks:

Until next time I’m Kevin Muñoz and as always feel free to send me a voicemail through my website latinamerianeo.org by simply clicking the purple “send voicemail” popup and just start recording your thoughts or any interesting topic that you’d like to see covered. I might just feature it in the next episode!

and for those of you on Patreon, I’ll see you there.

Otherwise, I’ll see you all in next week’s episode!