“Is the West losing Latin America?” Ana Palacio, Spain’s former foreign minister, senior vice president, and general counsel of the World Bank Group, asked the question in an essay entitled “Is China Winning Latin America?”
Palacio, currently a visiting lecturer at Georgetown University, is among a growing number of voices recently asking if China is or will soon become the most influential foreign nation in the region.
She wrote, “For the West, the looming specter of hot conflict with authoritarian regimes, from Russia to China, has again highlighted Latin America’s importance as a partner. At the same time, however, the United States and its allies are preoccupied by the war in Ukraine, including, not least, its implications for energy markets and economic prosperity.”
Palacio points out that five of the six South American nations with the highest population density now have socialist governments in power.
On February 17, a week before Russia invaded Ukraine, Bloomberg claimed that China had already replaced the U.S. in influence over South America.
“It’s no secret,” the publication reported, that China has been investing heavily in South America to challenge the U.S.’s long-standing hegemony and establish itself as the region’s top trading partner. However, a significant shift in China’s strategy for South America — going local to reinforce and deepen its financial hold — “has gone largely unnoticed.”
“Instead of focusing on national leaders, China and its companies have built relationships from the ground up,” Bloomberg reported.
Last week, Turkish public broadcaster TRT World published an article entitled “Is the U.S. losing its influence to China across Latin America?”
TRT wrote, “South America, unlike North America, has gained a reputation for being home to many festering conflicts where unstable governments have repeatedly been disrupted by U.S.-backed meddling and military coups. The chronic inequality and disorganized, corruption-ridden economy have empowered leftist groups with an ardent anti-American outlook.”
TRT went on to say that last month, during the ninth Summit of the Americas, an event that convenes roughly every three years and brings delegates from the Western Hemisphere to discuss topics like immigration, commerce, and poverty, “there were clear signs of U.S. power having significantly diminished.”
On June 8, U.S. President Joe Biden suggested a new economic alliance between the United States and Latin America to challenge China’s expanding influence at the event.
Outside of Mexico, the leading U.S. trade partner in the region, China has surpassed the United States in Latin America and strengthened its edge last year, according to a Reuters analysis of U.N. trade statistics from 2015–2021.
China is South America’s leading commercial partner and a significant source of foreign direct investment and credit in infrastructure and the energy sector, primarily through its Belt and Road Initiative. The nation has significantly invested in the region’s space industry and improved its military connections with numerous governments, notably Venezuela. Washington is apprehensive of these changes, and some claim Beijing is using its economic might to achieve political objectives.
The Patriot Ledger reported, “China’s growing footprint in the region has raised concerns in Washington that the PRC (People’s Republic of China) is leveraging its economic might to further its strategic goals and displace American dominance in the region.”
“The [People’s Republic of China] continues its relentless march to expand its economic, diplomatic, technological, informational, and military influence in [Latin American countries] and challenge U.S. influence in all these areas,” Gen. Laura J. Richardson, commander of the United States Southern Command, testified before Congress in March.
But as Time magazine reported in February, the U.S. still holds the lead in many ways.
“Latin America has historically been the part of the world with the highest approval rating for the U.S., rooted in foreign assistance, law-enforcement cooperation, education, and cultural ties,” Time said. “In 2019, China’s trade with the western hemisphere stood at $330 billion, with FDI stock at $180 billion. The U.S.’s was $1.9 trillion and $250 billion, respectively.”
Furthermore, the Council on Foreign Relations reports that the U.S. is taking action to counter China’s goals. The report states, “The U.S. Congress is considering several bills that focus on competition with China. These include the United States Innovation and Competition Act and the America COMPETES Act of 2022, both of which aim to challenge China’s dominance in Latin America’s science and technology sectors by increasing U.S. investment in research and development.”
Palacio concludes, “Reviving relations with Latin America will not be easy in the polarized political climate prevailing in much of the West. But when the stakes are as high as they are today, we cannot afford to keep our heads buried in the sand.”