How China is Using Latin America to Threaten the US

Name: How China is Using Latin America to Threaten the US
Uploaded: 2023-04-27T19:15:01.000Z
Duration: 1 h 4 min 9 s

China's Influence in Latin America

This transcript discusses how China has been able to gain power and influence in Latin America, and the potential consequences of this shift in power. It explores the reasons behind China's success in the region, including their investments and trade deals.

The Shift in Power

In the early 2000s, as the US shifted its focus to other parts of the world, China began eyeing countries in Latin America.

By 2010, trade between China and Latin America grew at an average annual rate of 31%, leading to a value of $180 billion a year.

Brazil ramped up bilateral trade with China from $2 billion dollars in 2000 to $100 billion dollars by 2021.

Estimates put US trade with Latin America at just under two trillion dollars, but every year that China grows its economic presence in the region, the United States will see a decrease in trade.

How Did We Get Here?

U.S. neglect allowed for Chinese influence to grow unchecked.

As it became apparent that Latin America could be used as a major economic hub while also hurting the U.S., China took full advantage of the opportunity.

Bribes can be made to powerful politicians and money talks in most of the world. There is also the fact that it’s hard to say no to a nation that is providing your country with jobs, income, and trade.

Investments

Since 2000, China has invested over $75 billion dollars in raw materials sector of Latin America.

As technology has evolved and batteries for electric cars and other industries become more important, China has poured another $4.5 billion dollars into lithium production in Mexico and the Lithium Triangle of Argentina, Bolivia, and Chile.

The company PowerChin has more than fifty projects across Latin America.

Consequences

If the United States doesn’t slow the spread of Chinese influence in Latin America, they may find governments around Latin America being replaced with pro-Chinese regimes.

The China Development Bank began funding solar and wind projects. They provided money to build Latin America’s largest solar plant in Jujuy, Argentina.

China's Investment in Latin America

This section discusses how China has been investing in various economic projects in Latin America, including infrastructure, cloud computing, and 5G technology.

Chinese Investments in Infrastructure

China has invested heavily in infrastructure projects throughout Latin America, including ports, railways, and canals.

These investments have allowed China to gain more power over many Latin American countries.

China has also invested in joint satellite research and production programs with Brazil and built ground stations in Bolivia, Ecuador, and Venezuela.

Influence on Politics and Media

China likely mines data and influences news, media, and advertisements that many in Latin America see.

Any deal with China will almost always include a component that strengthens Beijing’s position in the country.

Investments may allow them to put people in power that China can control in the future.

COVID Pandemic

During the COVID pandemic, China strategically sent vital supplies to nations they wanted to strengthen relations with.

However, rather than supplying their own citizens with facemasks and PPE, they were shipping them out across the world to boost their economy while simultaneously leveraging these vital supplies to open new trade deals and increase influence.

It’s highly likely millions of people died during the pandemic due to inadequate response capabilities but rather than being transparent about how the country faired during the pandemic what they were concerned about was how China looked during the crisis.

Concerns for the United States

Many Chinese investments come with no stipulations, and oftentimes certain regulations and rules need to be followed with money provided by the United States.

This has become a major concern for the United States as policies in South America particularly seem to be increasingly shaped by China’s influence.

China's Influence in Latin America

This section discusses how China has been able to gain influence in Latin America by investing heavily in various projects and loaning out tons of money, taking advantage of nations in need before, during, and after the pandemic, and exploiting the United States' focus on other parts of the world.

How China gained influence

China invested heavily in various projects and loaned out tons of money which either put governments in their debt or allowed them to influence strategic decisions.

They took advantage of nations in need before, during, and after the pandemic making sure that those countries became heavily reliant on China.

They exploited the United States’ focus on other parts of the world to secure power and influence in Latin America.

Debt trap

Venezuela currently owes China over $60 billion that it cannot pay back. This has created what is called a “debt trap” that will lead the country to default on its payments.

Beijing can now negotiate any type of repayment plan they want, and Venezuelan government can’t do much about it.

Missteps by US government

The Trump administration dialed back trade relations with much of the region and renegotiated the North American Free Trade Agreement making it less favorable for certain Latin American countries.

During both administrations (Obama & Trump), experts warned of the growing need to refocus U.S. attention on Latin America as China had become a strategic competitor and was quickly gaining influence. Unfortunately, like in the past, those warnings went unheeded.

History: US grip on Latin America

This section provides a brief history of the United States' grip on Latin America and how it is falling apart.

The Monroe Doctrine

In 1823 the U.S. drew up the Monroe Doctrine to stop European influence in the Americas. At this point, the Western Hemisphere dominated the world mostly unchallenged.

Cold War

During the Cold War, the U.S. started refocusing its attention on South America to ensure that Communist influence wasn’t spreading closer to home.

This period saw the United States tightening its grip on Latin America and keeping non-Western powers away from the Western Hemisphere.

Authoritarian rulers

During the Cold War, a number of authoritarian rulers took hold in Latin American countries.

In recent years many Latin American nations have shifted towards more democratic elections. However, oftentimes there are players behind

the scenes endorsing certain candidates.

China's Influence in Panama

This section discusses how China has set its sights on Panama, one of the most important countries for trade in all of Latin America. It explains how China is leveraging Panama's strategic position to help elevate Chinese trade and influence in the region.

The Importance of Panama

Around $270 billion worth of cargo goes through the canal each year.

China realized that after their cargo ships dropped off goods in Panama, they could then load up on exports from Latin America and North America before heading back to China.

It was then worth passing back through the Panama Canal rather than taking the cheaper route around Europe with an empty ship.

US Concerns

The United States became very worried about what it would mean if China influenced the politics and decisions of Panama.

In June 2019, the U.S. Financial Action Task Force listed Panama as a country that was not seriously trying to stop money laundering.

As Chinese influence grows in Panama, the United States’s hold on the region is diminishing.

Chinese Strategy

More and more Chinese companies are using the Colón Free Trade Zone to reach Latin American markets.

But as Chinese influence grows in Panama, the United States’s hold on the region is diminishing.

Ever since 2017 when China Landbridge Group purchased Margarita Island to build a deep sea port, U.S. government has become especially concerned.

Reasons for Focusing on Latin America

Reason 1: Taiwan

Before China purchased land where Port would be built, the Panamanian government stood with the United States and the rest of Western Powers in condemning China’s aggressive stance against Taiwan.

Less than a week after construction began on the port, the Panamanian government abandoned their support of Taipei and sided with Beijing over the growing conflict in the South China Sea.

Reason 2: Economic Interests

Chinese goods make up the largest share of all imports coming into Latin America at about 40% of total.

China's Expansion into Latin America

This video discusses the reasons behind China's increasing influence in Latin America, including its efforts to isolate Taiwan, increase soft power, and secure resources for its economy.

China's Efforts to Isolate Taiwan

China is successfully isolating Taiwan from the rest of the world by pressuring countries to sever diplomatic ties with Taipei.

As more nations sever diplomatic ties with Taiwan, China gets closer to achieving its goal of seizing the island.

Out of 21 Latin American countries, only four still formally recognize Taiwan.

Increasing Soft Power

China is investing heavily in Latin America not just for economic benefits but also to increase its soft power.

By shaping perceptions of the Latin American people, Beijing hopes to turn many countries away from their close ties to the United States and draw them into a positive relationship with China.

President Xi Jinping has visited Latin America no fewer than 11 times since he took office in 2013.

Securing Resources and Making Money

Chinese expansion into Latin America is also about securing resources and making money for its economy.

The number one trading partner with many South American countries is now China.

Chinese goods are being sold around Latin America, and a huge amount of natural resources are being shipped back to China.

China's Influence in Latin America

In this section, the video discusses the reasons behind China's growing influence in Latin America and its potential impact on the region and the world.

Reasons for China's Growing Influence

China is investing heavily in Latin America to secure exclusive trade deals in the future.

By investing in developing economies, China hopes to weaken US influence in the region and bring more cash into its own economy.

China has taken advantage of Latin America being overlooked by other countries to invest heavily and secure diplomatic support from nations like El Salvador, Panama, and Dominican Republic.

Through its influence over Latin American countries, China can sway international votes towards its interests and shape global norms and regulations that benefit them.

As a byproduct of investment, nations with close ties to Beijing tend to lean towards authoritarian forms of government. This allows for easier cooperation between governments with similar ideologies.

Concerns Over China's Influence

The United States is concerned about containing China's growing influence as it could lead to a unified front of pro-Chinese nations that would be difficult for even a superpower like the US to stand up against.

There are concerns over whether it is too late for the US to combat Chinese influence spreading across Latin America as their power on an international stage continues to grow.

There are worries that pouring money into developing economies without sustainability planning or stipulations on how funds can be used could lead to economic collapse in the future.

As governments in Latin America become more authoritarian and switch their viewpoints of China, it could allow Beijing to develop alliances and build military bases in the Western Hemisphere. This is a concern for the US as it has very little ground to object to such an outcome.

Conclusion

China's growing influence in Latin America is a complex issue with potential ramifications on both regional and global levels. While there are benefits to investment, concerns over authoritarianism, sustainability, and military presence have led to worries about China's long-term goals in the region.

China's Military Ambitions in Latin America

In this section, the speaker discusses China's military ambitions in Latin America and how it plans to achieve them. The U.S. response to this expansion is also discussed.

Chinese Military Presence in Latin America

Countries in Latin America that are reliant on China for their economic health may be forced to accept a Chinese military presence within their borders.

The U.S. would not accept any Chinese military presence near its borders, but harsh sanctions by the U.S. and its allies would be placed on China and any nation that allied with them if they did so.

Beijing has stated that its strategy in Latin America hinges on the importance of security and defense cooperation with countries in the region.

China has carried out more than $615 million in weapons sales with Venezuela between 2009 and 2019, sold arms to Bolivia and Ecuador, provided anti-riot gear and military vehicles to suppress discontent from the general population of Bolivia.

Future Possibilities

It is not out of the realm of possibility that Latin America will be dotted with Chinese bases as China's influence continues to grow.

The United States launched the América Crece initiative designed to contest China’s Belt and Road initiative by helping Latin American nations attract private investment while following transparency rules based around international best practices.

US Response

Although the US still spends much more money on development and aid in Latin America than China does, it seems like the US government is either not concerned or reacting very slowly to China's expansion into the Western Hemisphere.

China's soft power and influence are so important to their end game. They know they can't change the perception of Latin America overnight, but given enough time, they could erode the confidence that Latin American people and governments have in the United States and improve their perception of China.