Article

Cooperating with China in Latin America

The United States should find ways to turn China’s growing presence in Latin America and the Caribbean into an opportunity, writes Stephanie Miller.

Chinese President Hu Jintao, right, and Brazilian President Luiz Inacio Lula da Silva raise their arms at a seminar on investments and trade in 2004. China’s presence in Latin America and the Caribbean will continue to grow, so the sooner the Obama administration can find ways to cooperate with China in the region the better. (AP/Adriano Machado)
Chinese President Hu Jintao, right, and Brazilian President Luiz Inacio Lula da Silva raise their arms at a seminar on investments and trade in 2004. China’s presence in Latin America and the Caribbean will continue to grow, so the sooner the Obama administration can find ways to cooperate with China in the region the better. (AP/Adriano Machado)

Alicia Barcena, the U. N. Economic Commission for Latin America and the Caribbean’s executive secretary, made note of China’s growing investments in Latin America and the Caribbean during a recent press conference in Santiago, Chile, suggesting “[t]here are promising hopes for Chinese investment in the near future.”

Indeed, China increasingly looks to the region as a primary source for raw materials to match its blistering pace of development. These growing ties between China and Latin America and the Caribbean raise a question for U.S. policymakers: How should the United States view China’s emerging presence in a region that was once considered—under the Monroe Doctrine—the United States’ sphere of influence?

Latin America and China continued to boost two-way investment, trade, and commercial ties even as the global economic crisis froze international credit markets and reduced global trade between industrialized and developing regions alike last year. When Chinese President Hu Jintao visited Latin America and the Caribbean in 2004, he announced that China was ready to increase a two-way trade to $100 billion U.S. dollars by 2010. By 2007 China and Latin America had already surpassed that, with two-way trade totaling $102.6 billion, 46.2 percent more than the previous year. And in 2008, two-way trade and investment reached $140 billion, with approximately $120 billion devoted to bilateral trade.

Increased Chinese investment in and commercial ties with Latin America and the Caribbean has also led to groundbreaking Chinese participation in the Inter-American system. In 2004, China became an observer of the Organization of American States, or OAS, and sent riot police to help the United Nations peacekeeping mission in Haiti. Then, China joined the Inter-American Development Bank, or IDB, in January 2009 as a donor-member with a $350 million-loan for various bank programs in Latin America and the Caribbean. Zhou Wenzhong, China’s ambassador to the United States, says that China and Latin America find themselves more connected by common interests and cooperation, with close ties manifested by frequent high-level contacts, visits, and growing political trust on both sides.

The Chinese government signaled how serious it takes its relationship with Latin American and the Caribbean by publishing its first-ever policy paper on the region in November 2008. The report outlines China’s priorities in Latin America and notes the “move toward multi-polarity [globally] is irreversible and economic globalization is gaining momentum.” The Chinese government sees Latin America and the Caribbean at a similar stage of development and “views its relations with Latin America and the Caribbean from a strategic plane,” thereby seeking “to build and develop a comprehensive and cooperative partnership featuring equality, mutual benefit, and common development with Latin American and Caribbean countries.”

The priorities in China’s report on Latin America and the Caribbean lean heavily toward economics. Political ties are relegated mostly to exchanges, consultations, and a loosely articulated commitment to enhancing cooperation in international affairs. And it proclaims China “stands ready to work with Latin American and Caribbean countries to strengthen the role of the United Nations, make the international political and economic order more fair and equitable, promote democracy in international relations, and uphold the legitimate rights and interests of developing countries.”

On the surface, China’s interests in Latin America and the Caribbean seem similar to U. S. interests in the region. The Obama administration has said it wants to foster a foreign policy approach toward Latin America committed to a “new era of partnership” working on “shared challenges of economic growth and equality, our energy and climate futures, and regional and citizen security.” And it states it is “committed to shaping that future through engagement that is strong, sustained, meaningful, and based on mutual respect.”

Concerns have also been voiced about China’s unspoken motives for investing in Latin America and the Caribbean. Many U.S. commentators speculate that China’s real interests in Latin America and the Caribbean are not indeed tied to the region’s development, but instead are simply focused on unsustainably extracting the region’s resources. Others suggest that China’s activities are fueled by a secondary motivation to gain political favor in order to isolate Taiwan―12 of the 23 countries that still maintain official diplomatic ties with Taiwan are in Latin America and the Caribbean.

It is clear that understanding China’s spoken and unspoken motivations and priorities in Latin America and the Caribbean is a growing concern for the United States given that it, too, has policy goals for the region. But if the Obama administration actively pursues an agenda that is truly “strong, sustained, meaningful, and based on mutual respect,” then it need not see China’s growing presence in Latin America as a threat. Instead, the United States may find China to be a willing partner to cooperate in areas of mutual concern.

One of these concerns is Latin America’s economic development. More than 400 Chinese companies are registered in Latin America and the Caribbean, operating in industries as varied as energy, agriculture, infrastructure, and telecommunications―industries in which U.S. companies also do business. As such, the two countries benefit from an institutionally strong and transparent region where the rules of engagement and competition are clear and democratic.

The United States and China also benefit from a secure region in which to operate. Problems of crime and public insecurity are pervasive throughout Latin America and the Caribbean. During the last decade, approximately 1.2 million people have been killed in Latin America and the Caribbean as a result of crime, and each year 200 million people—one third of the region’s population—are victims of crime.[1] What’s more, the Inter-American Development Bank estimates that the region’s gross domestic product would be 25 percent higher today if it had a crime rate similar to the rest of the world.

Thus, the United States and China, as important investors in the region, could find ways to work together on helping Latin American and Caribbean governments tackle crime and insecurity. And the United States should seek China’s cooperation in the various institutions that comprise the Inter-American system—a system that makes a fundamental commitment to democracy and human rights. The United States could use these multilateral forums to ask China to uphold its policy paper commitments to promote a more equitable economic world order, as well as democracy in the international system.

China’s presence in Latin America and the Caribbean will continue to grow. So the sooner the Obama administration can find ways to cooperate with China in the region the better. Doing so would strengthen the United States’ standing in the region and would foster trust with one of its most important global economic partners―who happens to be evolving into a potential commercial rival to it south. In sum, focusing on an agenda that fosters mutual respect and engages Latin America and the Caribbean and its associates in finding solutions to regional and global challenges will not only deliver on the United States’ promise of seeking a “new era of partnership,” but perhaps succeed in turning a rival into an ally.

Stephanie Miller is currently a consultant on U.S.-Latin America relations and was formerly the Research Associate for the Americas Project at the Center.

Endnotes

[1]. Kevin Casas Zamora, “Democracy Losing This Fight,” The Miami Herald, August 5, 2008.

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