Giancarlo Elia Valori
The relations between China and Latin America have developed positively, but some problems and challenges are also being faced. Firstly, the intensified strategic and economic competition between China and the United States has increased the negative impact on the relations between China and Latin America. Trump’s Administration already used zero-sum competition and Cold War mentality to mark Sino-U.S. relations, believing that China’s rise in Latin America could upset the U.S. order in the Western Hemisphere.
Back in February 2018, during a visit to Latin America the then Secretary of State, Rex Tillerson, said that China was using its economic influence to bring Latin America into its sphere of influence, and criticised it as seeking a new imperial power for its geopolitical expansion.
In 2018, Rand Corporation published the 400-page report At the Dawn of Belt and Road. China in the Developing World. The report pointed out that China’s contacts in Latin America and its geopolitical advantages held back the U.S. presence in the region.
Specifically, the report explored China’s economic, political and security roles in Southeast Asia, Oceania, Central Asia, South Asia, the Middle East, Africa and Latin America and the Caribbean.
The report also analysed China’s bilateral relations with key States in each region. Finally, it dealt with the negative consequences of the Chinese strategy towards developing countries for the United States. Therefore, it maintained that strategists and decision-makers in the Armed Forces, and all U.S. military staff, needed to focus on China and anyone interested in developing international relations with that country. An attitude of threat not only towards China.
Another factor preventing – at least apparently – the development of China-Latin America relations is the retreat of Progressives and the advance of Conservatives in the landscape of political change in the Subcontinent: this poses a challenge to the development of mutual relations.
2017 and 2018 were general election years in thirteen Latin American countries. In Brazil, Argentina, Chile, Peru and other countries, the old traditional and left-wing parties lost elections. Therefore, Latin America is divided into two camps: one is the left-wing one represented by Cuba and Venezuela, and the other is the right-wing camp composed of Brazil, Chile, Colombia and Peru.
Conversely, the fast development of China-Latin America relations from 2003 to 2013 was favoured by the political atmosphere of the left-wing camp. Currently, however, the transition from the Left to the Right tells us that some countries rely on the United States in terms of development projects and ideologies. Therefore, the political transition has become an additional challenge for the development of relations between China and Latin America.
Another crisis point is the impact of the pandemic. Here are some data regarding the Covid-19 cases until January 17, 2021:
Latin America: 16,753,447
North America: 23,091,187 (USA: 22,423,006; Canada: 668,181)
Latin American countries record relatively high urbanisation rates, with peaks of 70-80%. Large cities are very densely populated, with a high percentage of informal employment and weak national control abilities, which create the conditions for the spread of Covid-19.
On the other hand, the United States – which is the worst affected country in the American Continent – has increased the repatriation of illegal immigrants from Mexico and Central American countries for reasons of epidemic prevention and control, thus further aggravating the situation in these already disadvantaged countries.
Why is the pandemic in Brazil so severe? The indifference of President Bolsonaro’s government towards the epidemic, as well as ineffective measures and omissions in control are the main reasons for the spread of the epidemic in Brazil. The first case was discovered in Brazil on March 12, 2020 and the epidemic soon began to spread throughout the country, which currently records 8,131,612 cases and 203,580 deaths.
Brazil’s former Health Minister, Nelson Teich, advocated isolation, but Bolsonaro’s philosophy is different. He believes that imposing quarantine curbs economic development. Health Minister Teich resigned. The new Minister is Gen. Eduardo Pazuello, who has no medical training and no experience in managing public health disasters.
An official of the Brazilian Ministry of Health said that the number of people infected by the pandemic is officially eight million, but it has actually exceeded ten million. This unprecedented public health crisis has triggered economic recession and could lead to new social unrest. These are all new challenges.
The impact of Covid-19 on the entire Latin American region is very severe. According to the World Bank statistics, it has been the most severe crisis ever since the Great Depression in the 1920s and 1930s. The blow to the region is reflected mainly in four aspects:
1) exports have declined.
2) The prices of raw materials have fallen. Due to reduced demand, prices have inevitably fallen. Recently, everyone has seen a drop in copper prices, especially as Peru and Chile, the copper mining centres of the world, have been forced to close their mines due to the impact of the pandemic.
3) Tourism has collapsed. Latin America is a kind of cultural-exotic attraction for North Americans and Europeans. With Covid-19, there is no way for tourism and passenger transport to go back to the traditional levels of normalcy.
4) The inflow of remittances has decreased significantly. They are one of the main driving forces for economic development in the area, especially in regions like Central America and countries like Mexico.
The Latin American immigrants working in the United States put aside the money they earn and send it to their families – a key source of income for Latin America. As the U.S. economy has been severely hit, also remittances have been significantly reduced, to the detriment of the entire subcontinent.
With specific reference to Covid-19, it should also be mentioned that on June 24, 2020, the U.S. Congress held a full-scale hearing and invited a number of U.S. experts to express their views.
Those experts included Robert Evan Ellis of the Strategic Studies Institute of the U.S. Army War College. One of the main points he made was that the U.S. government should strengthen its support for Latin American allies to prevent China from using ‘medical diplomacy’ to expand its sphere of influence in Latin America, along with advances in supply chains, strategic acquisitions and loans to troubled governments, while the West remains economically weakened and politically distracted by the Covid-19 pandemic.
Hence, in his view, the United States should resolutely stop China’s technological expansion in Latin America. This means that the United States should not acquire and share Chinese medical know-how.
Ultimately, the pandemic has not changed China’s goals or overall strategy. It provides an unprecedented opportunity for China to move forward with its implementation. With the help of the Chinese government’s controls on its population to impose and enforce quarantine, and thanks to its huge financial reserves and leverage on the economy, China is emerging from the crisis (albeit certainly weakened) ahead of most Western and non-Western countries.
The pandemic and its health, economic and other effects are likely to persist and continue to weaken the United States and Europe for some time. The interplay between partial economic reopening and the time needed to develop, test and massively produce a vaccine will extend this process.
In Latin America and in other less developed parts of the world, the situation is likely to be far worse. Less capable public health systems, large informal sectors, vulnerable small and medium-sized enterprises, as well as limits to governments’ ability to borrow money to protect vulnerable populations, and the related economic sectors will put pressure on economies as they suffer from Western countries’ declining investment and demand for their exports. In China, on the other hand, things are being solved.