Latin American nations have been a battleground for great power politics for centuries, from the years of European colonization through the struggle between the United States and the Soviet Union for influence during the Cold War. China has also been engaging Latin America for over two-hundred fifty years in the form of trade, and over the past decade it has recently sought to strengthen its ties with the region. This growing relationship has important implications for both U.S.-Latin America relations and U.S.-China relations.

Carnegie-Tsinghua’s Matt Ferchen, along with Gonzalo Paz, professor at the Elliot School of International Affairs at George Washington University, and Chinese and U.S. experts, participated in a roundtable discussion on China-Latin American relations and their intersections with U.S.-China and U.S.-Latin America issues

Strategic Partnerships

  • Expanding Markets: Latin American economies have experienced exponential growth in the past several decades and their combined GDP is around $6.5 trillion, explained Paz. Brazil has surpassed the UK as the world’s eighth highest country in terms of GDP. This growth has also increased the material demands of Latin America’s population, providing a good basis for trading partnerships. In November 2008, China released its first white paper on Latin America, outlining Chinese relations with the region and how to strengthen existing ties. Chris Janiec, a lecturer at China Foreign Affairs University, pointed out that while South-South cooperation appeared hopeful, the relationship could pose just as many challenges as benefits for China.
  • Areas of Cooperation: Currently, experts pointed out, China and Latin America have primarily increased trade, although desires for financial and political cooperation also exist on both sides. In particular, China’s relationship with Venezuela has been growing, with China investing oil-backed loans of around $40 billion in the country. Free trade agreements with Chile, Peru, and Costa Rica are already in place, and there is a chance that China could eventually exceed the United States and the EU as a major economic partner of Latin America, stated Paz. Chinese Premier Wen Jiabao recently iterated that people-to-people exchanges are also important to these relationships, and has proposed setting up various cultural centers throughout Latin America. Education exchanges have also been promoted, as China promised 5,000 scholarships to Latin American students over the next five years.

Impact on U.S. and China Relations

  • Cold War Mentality: Zhai Dequan, deputy secretary general of the China Arms Control and Disarmament Association, stated that the United States may still have a Cold War mentality regarding Chinese-Latin American relations. The United States has exerted its influence in Latin America since the late nineteenth century. Zhai explained that U.S. fears around the Chinese-Latin American relationship are mainly focused on the possibility of China supporting authoritarian regimes, like that of Chavez in Venezuela, to protect economic interests. The United States considers Latin America to be its “backyard,” Paz added, and is wary of China’s growing involvement in the region.
  • Increased Dialogue: In order to mitigate any tension over Latin America, the United States and China began holding dialogues in April 2006, with the first held in Beijing. Paz noted that such a dialogue was remarkable due to U.S. feelings of hegemony in Latin America, but both nations wanted to increase transparency on the issue. The long-term goal was to promote further cooperation between the United States and China, but Janiec commented that strategic mistrust due to misperceptions of China’s long-term intentions prevented further cooperation.

Implications for Latin America, China, and the United States

  • Alternative to Western Aid: The growth of economic ties with China and China’s investment and loan deals provided a positive alternative to Western aid to developing nations, experts said. However, as one panelist explained, the people of Latin America have mixed views on China’s role in the region. Many Latin American nations do not recognize the PRC’s government, and these political tensions can hinder development of trade and investment relations with China. In a Pew research poll, one commentator noted that only 50 percent of Brazilians and 40 percent of Mexicans supported or approved of China’s role.
  • Balancing Interests: Paz asserted that the United States could not prevent China from engaging in the region, so the main goal was to simply shape and guide China’s behavior in its “backyard.” He added that a new power in the region would balance the presence of the United States, but the history of rivalry in the region should not be forgotten because, ultimately, it was the people of Latin America who would suffer from competing interests.