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US-China strategic competition in Latin America

In recent years, US-China strategic competition has witnessed swift, complex, and unforeseeable developments, which exerts a considerable influence on development strategies of many countries. How China expands its influence in Latin America, how the US responds to this influence, what effects this competition might have on the region, etc., are matters of great concern to international community.

China’s growing influence in Latin America

In the past two decades, there have been significant changes in major powers’ relations in Latin America. While the US gave priority to the global war on terrorism and is being trapped in the Middle East and North Africa, China has gradually expanded its influence in Latin America, challenging the US’s dominant position right in its hemisphere.

Economically, given the enormous economic capability of the world second largest economy, China has created an impressive change to become Latin America’s leading trade and investment partner. According to statistics, bilateral trade between China and Latin America in the 2000 – 2020 timeframe increased from USD12 billion to USD315 billion and is expected to reach USD500 by 2025. Currently, China is the number-one trading partner of Brazil, Chile, Peru, Uruguay, and some Caribbean countries. China has even had parity or overmatch with the US in certain fields. Additionally, it is an important partner in finance, banking, exploitation and processing of strategic energy resources, infrastructure development, including roads, airports, seaports, 5G networks, and so on. Politically, thanks to smart implementation of policies of mutual benefit and attractive media campaigns to popularise images of Chinese land and people, China has crafted its image and position as a major power. More importantly, Beijing has created good impression when it swiftly provided medical equipment and vaccines for countries in Latin America and the Caribbean to help them prevent and combat the COVID-19 pandemic. Some nations which are disappointed with neoliberalism have also turned to the Belt and Road Initiative (BRI) and adopted a more appropriate approach to China. As for military and national defence, China attaches importance to exchange of high-ranking delegations; cooperation in military science and technology development; assistance in training; provision of weapons and equipment for countries in Latin America and the Caribbean. Moreover, China is a potential weapon exporter of many countries in the regions. In terms of external relations, contrary to some other major powers’ gunboat diplomacy that aims to impose pressure on democracy and human rights and is criticised by international community, China advocates a flexible foreign policy, multilateralisation, and diversification on the basis of peaceful coexistence, mutual respect, South-South cooperation, protection of national sovereignty, etc., thus leaving a deep impression on regional countries. Some countries have considered China a long-term reliable partner and established comprehensive strategic partnerships.

According to international experts, China quietly approaches Latin America with a view to achieving strategic objectives, including: penetrating into potential markets where it can soon realise the Chinese Dream of becoming the number-one major power in the world; counterbalancing the US pivot to Asia-Pacific; and enabling China to compete directly with the US right in its backyard. China’s expansion of influence in the US’s backyard demonstrates that the balance of power in contemporary international politics is shifting, and the US’s dominance in Latin America is being challenged by a rising China which is seeking to become a modern major power.

US response to China

Contrary to the predecessor’s policy of open, fierce confrontation and competition in every aspect, President Joe Biden has chosen a more flexible approach that combines diplomacy with multilateral cooperation, building of alliances, and establishment of a common front with regional countries to contain its opponent in trade, finance, technology, etc., to counter an increasingly assertive China in Latin America. Accordingly, Washington has adjusted some policies to correct mistakes in multilateral agreements, trade and investment in the region; improved economic policy; promoted partnerships and strategic investment; offered financial incentives and humanitarian aids to form alliances. The White House has also been more open in its foreign policy when it concentrates efforts on strengthening ties with allies and traditional partners; brings into play the role of US-led regional and inter-regional organisations; promotes investment cooperation with countries and steps up trading activities to reduce dependence on cheap Chinese goods. The Federal Reserve System (FED) has invested in enhancing financial capability of the Inter-American Development Bank (IDB); collaborated with the International Monetary Fund (IMF) and World Bank (WB) to stop China’s investment policy in Latin America and the Caribbean. Currently, Biden administration is carrying out an infrastructure investment and development project worth USD60 billion that aims to give the US an advantage over China. Another initiative is to use the International Development Finance Cooperation program to aid the private economic sector of regional countries in commercial exchange, infrastructure connectivity, digital information systems, and financial services with a view to gradually bringing these countries into the US’s orbit.

In addition, Biden administration advocates reducing pressure on democracy and human rights; promoting “vaccine diplomacy strategy” to counterbalance China; adopting constructive engagement with some leftist governments; settling differences and gradually establish peaceful relations with Venezuela and Cuba. Furthermore, White House also increases military aids, promotes security cooperation with nations and US-led regional organisations. Apart from creating the Latin American Front, Biden administration also strengthens alliances and partnerships to expand its influence in other regions in the world, especially in Asia-Pacific, with the aim of forming a multidimensional posture to contain China’s rise while affirming its leadership role in the region and the world.

Effects on the region

International analysts believe that US-China strategic competition in Latin America in recent years has exert dramatic effects on economy, politics, culture, society, national defence, and security of many regional countries. In fact, rise in two-way trade and China’s investment and development fund have enabled regional countries to access and get benefits from global supply chain. Many countries have reaped huge profits when they could take advantage of opportunities offered by international markets to export their agricultural products, minerals, etc., notably Brazil, Chile, and Argentina. China’s funds worth billions of US dollars have saved regional economies from bankruptcy as a result of crises and effects of the COVID-19 pandemic. Moreover, vaccine diplomacy strategies of US and China have helped many countries, including the poor, underdeveloped ones, to achieve herd immunity against the COVID-19 pandemic.

However, the strategic competition between the two major powers puts countries in Latin America in difficult situations, not to say “dilemmas”. Some nations which have established relations with China are facing many difficulties due to the US’s economic sanctions. Trade rivalry between these two leading economies will worsen debt crisis in many countries. High rates of unemployment, poverty, and environmental pollution are also burning problems. Latin America is likely to become a big market for cheap Chinese goods. Additionally, Trump administration’s nationalism, protectionism, and anti-immigration policies have driven Venezuela, Cuba, and many countries pursuing leftist ideology into both economic and political instability, exacerbating the crisis in the region. In recent times, Biden administration has also repeated the same mistakes of his predecessor, most notably the extension of a “disappointing” decree in March 2021, which declared Venezuela an unusual and extraordinary threat to US national security. Some regional countries have also expressed concern about US policies on races, democracy, and human rights as well as spying operations, which are likely to threaten peace and stability in the region.

It is obvious that Latin America is one of the areas of US-China strategic competition. The rivalry will last for a long time, become increasingly fierce, determine major powers’ relations around the world, and have a tremendous influence on development strategies of many countries in Latin America and the Caribbean. Nevertheless, US-China strategic competition in Latin America cannot lead to a total military confrontation, no matter how fierce it is. They both have many intertwined interests here, and many international problems, including climate change, counterterrorism, and nontraditional security challenges, requiring their joint efforts. Consequently, which direction this strategic competition evolves and how it affects regional, international security and politics are still unanswered questions.


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