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How China Stole Latin America

The PRC, unlike the Biden regime, is making tangible investments in the United States’ backyard.

Waving,Colorful,Flag,Of,China,And,National,Flag,Of,Guatemala.
(esfera/Shutterstock)

On August 25, 2000, then-candidate George W. Bush gave a speech in which he framed his prospective foreign policy for Latin America. "Our future cannot be separated from the future of Latin America," Bush said. "Should I become the president, I will look south not as an afterthought, but as a fundamental commitment."

"Those who ignore Latin America do not fully understand America itself. And those who ignore our hemisphere do not fully understand American interests. This country was right to be concerned about a country like Kosovo, for example, but there are more refugees of conflict in Colombia. America is right to be concerned about Kuwait, but more of our oil comes from Venezuela. America is right to welcome trade with China, but we export nearly as much to Brazil."

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Of course, then 9/11 happened. Bush’s words did not transform into deeds. After a decade in which the Clinton administration set up the first steps toward a single market in the region—a controversial plan on its own, but that at least showed some interest in engagement with Latin America—the region became the most forgotten in U.S. foreign policy after Africa, despite being the nearest.

Another country filled the hole left by American indifference: China. While the U.S. was focused on wars thousands of miles from its shores, the Eastern giant slowly but surely spread its influence across the region. Today China is a larger trading partner than the U.S. for Argentina, Brazil, Peru, and Chile, some of the most important economies in the region.

How and why did this happen? What can be done to change it?

Although Latin America has not been the main focus of American leadership since the early 20th century, there was still a serious foreign policy for the region during and in the immediate aftermath of the Cold War. Although some of it is quite questionable, such as the Condor Operation, there was a thoughtful attempt to engage with Latin America, which cannot be said today.

Just check out what happened at the Summit of the Americas this year. It was held in Los Angeles, the first time it was held in the U.S. since the first summit in 1994 in Miami. This was the perfect opportunity to show that the U.S. cared about the region and that it wanted to strengthen commercial, security, and cultural ties. The main result of the Summit was a vague Declaration on Migration and Protection.

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Without a specific Latin American foreign policy, the U.S. has attempted to spread woke ideology in the region. This means the U.S. is losing key allies that might help it ease domestic issues. Let’s consider a single, small example: Guatemala.

Guatemala is a small Central American country that borders Mexico. It is also a necessary stop for those coming from El Salvador, Honduras, Nicaragua, Colombia, or Venezuela. Thus, with a good relationship, Guatemala could help the U.S. ease the influx of illegal migrants at the southern border. Guatemala by no means is a perfect country. Like most of the region, it is terribly corrupt and poor. However, in a subregion with a socialist dictatorship in Nicaragua, a quasi-narco state in Honduras, and an arguable autocracy in El Salvador, Guatemala seems like a relatively stable ally.

How has Biden approached Guatemala? By slapping its face, mostly. In a 2021 interview, Guatemalan president Alejandro Giammattei said that if American companies took part of their Chinese operations back to the region, to countries with an affordable workforce, such as Guatemala, they would solve at least part of the migration issue. In the same interview, he also detailed how U.S. foreign policy is hurting Latin American countries and helping them shift to China.

“I told Kamala Harris: we need more trade. Not aid, but trade. We export a lot of avocados, but what happens? The U.S. has tariffs on our avocados. If the U.S. market was open to our avocado, we could produce and sell five times as much as we do right now and create thousands of jobs. We’re selling it to Korea, Taiwan, Europe, [which is more expensive], but we don’t send it to the U.S., that is much closer,” he said.

Giammattei alluded to what seem to be conditions that foreign powers, likely the U.S. and the E.U., have placed on economic cooperation. “I cannot allow foreign countries to trample our beliefs and our constitution,” he said. “Abortion is not legal in Guatemala according to the Constitution, and to change that, you would have to amend the Constitution, which it’s quite difficult.… As long as the Constitution protects life from conception, no country can come and tell us to make laws that violate our Constitution.”

Guatemala is one of the handful of countries that still recognizes Taiwan over China, but with the unnecessary souring of relations between Guatemala and the U.S., that might change soon. In fact, China is already the second-largest trading partner of the country.

This is a trend that repeats itself all over Latin America.

China has filled a gap that the U.S. left, investing in infrastructure and industry all across the region. Chinese companies invested $21 billion in 2017 in Brazil, including power plants, an electricity distributor, and ports. Brazilian governors, from across the political spectrum, regularly visit China to attract more investments. It would take some digging to find out who was the last to go to America with the same goal. Chinese companies are upgrading Argentina’s northwest railway. A Chinese company built one of the largest solar energy projects in the region in Jujuy, northwest Argentina, where Chinese companies also exploit the vast lithium mines, and in 2022 Chinese companies are investing $22 billion in varied industrial and infrastructure projects in Argentina. A Chinese company is building Bogota’s subway in Colombia. Chinese loans to Latin America exceed $10 billion per year, and its massive buys of soy, pork, and minerals have already made China the largest trading partner of South America.

Why has China been so successful? Because their pitches are simple: we’re here to do business, we don’t care about your local politics, and we’ll offer deals that nobody else will offer. American deals are generally full of conditions regarding rule of law and human rights. This is not necessarily wrong; certainly, Latin America would be better with less corruption. But it seems that the U.S. doesn’t care much about rule of law and human rights when it comes to the Middle East, whereas its moral impulses are making it lose in Latin America.

Meanwhile, almost 20 Latin American and Caribbean countries have joined the Belt and Road Initiative, while six are already part and two are prospective members of the Asian Infrastructure Development Bank, China’s response to the IMF.

Not everything is pretty with the new masters, though.

First of all, many of the Chinese-led projects in the continent have gone south. A $1.5 billion project to expand an oil refinery in Costa Rica was canceled after a conflict of interest was found in the feasibility projections, which underscored its environmental impact. A dam built in Ecuador by a Chinese company through a $1.7 billion loan quickly turned into a disaster due to upstream erosion from the dam; a former vice president of Ecuador was convicted of bribery in the case. Likewise, the “arco minero,” a large mining area in southern Venezuela, has been surrendered, along with other countries and groups, to Chinese companies, which have all but destroyed the natural landscape of the area, the northern edge of the Amazon. Illegality and even massacres abound, with little to no benefit for the Venezuelan economy.

Even so, Chinese companies offer cheap credit and cheap infrastructure that the U.S. does not seem ready to provide: subways, ports, railroads, dams, and even 5G networks. Most Latin American countries don’t want to depend on China, but do they have an alternative?

Of course, even though China presents its ties as merely commercial, they seldom are. China has offered predatory loans to the Venezuelan regime since 2010, and Venezuela has basically repaid them with free oil, and with the heavy Chinese presence in the “arco minero.” Eight of Taiwan’s 13 remaining partners are in Latin America, and China has used the Belt and Road Initiative and cheap credit to isolate Taiwan. Since 2017 the Dominican Republic, Panama, El Salvador, and Nicaragua have changed their diplomatic recognition from Taiwan to China.

Meanwhile, the China-CELAC Joint Action Plan for 2022-2024 (CELAC was Chavez’s response to the OAS, including all countries in Latin America and the Caribbean) calls for increased political and security cooperation between Latin America and China, as well as in science and information technology.

China already sells its surveillance equipment to law enforcement in Bolivia, Ecuador, and Venezuela and sends agents to train them in its use. China also has a satellite base in Argentina—200 hectares at no leasing cost for 50 years. All South American countries but Paraguay (the sole country in the subregion that recognizes Taiwan) buy all kinds of weaponry from China.

Some are concerned that relations with China are already influencing U.N. voting for some of these countries. While Americans are generally inclined to believe that organizations such as the U.N. are useless and irrelevant, just consider the damage the WHO caused with Chinese puppet Tedros Adhanom at its helm.

The U.S. has loaned Ecuador (one of the handful of right-wing governments in the region) $3.5 billion to help it get out of Chinese debt as long as it does not purchase technology from China. And when Panama officially established diplomatic relations with China in 2017 and Chinese companies began creating a deepwater port near the Canal Zone, among 16 other large infrastructure projects, the U.S. responded by putting Panama on its gray list of countries not doing enough to fight money laundering. Five of the 16 China-backed projects have been axed since.

Exclusively using the “stick” approach won’t win anything for the U.S. in the long term, though. The Trump administration launched the America Crece initiative to compete with Belt and Road, injecting $1 billion in investment in Guatemala and a similar amount in Paraguay. But hardly anything has been heard since. And that’s precisely the problem with the U.S. approach to Latin America. While China has a sustained 20-year foreign policy toward the region, the U.S. thinks a reactive approach, whereby it punishes its “backyard” for not being woke enough or allowing Chinese investment, will be enough. Where is the American Belt and Road in the Western Hemisphere? Where is the technology cooperation? China is funding the region’s ports while the U.S. funds its drag shows and its racial education.

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