The U.S. and China in Latin America
Foreign intervention is a topic consistently mentioned in tandem with Latin America, especially in regards to Chinese and American intervention. China especially seems to be taking over the economic, political, and social sectors of Latin America. China is especially prevalent in infrastructure through the Belt and Road Initiative (BRI) with almost 20 Latin American countries in the initiative. Many of these countries are put in debt they cannot pay and there is often not much follow through on infrastructure projects. However, Chinese involvement is not all negative. China is building a fiber optic cable originating in Chile that connects Latin America, Australia, and Asia. This will connect three different continents but could make Latin America completely dependent on China for telecommunications.
Latin American countries tend to have to strike a balance between U.S and China relations. This is due tension and distrust between the two countries. When a country gets closer to China, they automatically move farther away from the U.S and vice versa. When Chile received investment from China, they had to move away from U.S. investment and telecommunications. This is partly because of Trump as well as American safety concerns with being in regional proximity with China. Mexico and Brazil are perhaps the best examples of U.S.-China tensions with Mexico receiving low investments from China because they are close with the U.S. and Brazil’s President Bolsonaro wanting to get closer to Trump causing China to slightly pull back from Brazil.
Brazil has a third option of being autonomous. Brazil is the most populated and richest country in Latin America and historically have been trying to take this route. An example of this is the creation of MERCOSUR, the common market agreement between Latin American countries. Brazil has been leading discussions but the trade bloc itself has been largely unsuccessful with free trade agreements only existing between several bilateral agreements and only having four countries as committed members.
When discussing, we focused on whether China was a “predator or partner” to Brazil and Argentina. Argentina relies on China for long term infrastructure loans and feels that China would be helpful in paying off Argentina’s debt, especially to American creditors. We predicted that China could turn into a “predator” if they become inflexible in refinancing loans although they have not yet. Right now, the U.S. holds most of Argentina’s debt but China has the potential to become predatory especially as they are pushing towards policies that are in the best interest of China. This could be a possible forecast question as there is a strong Chinese influence in Latin America so Chinese policy and flexibility with loan restructures could have major effects on Latin America’s economies. China has had a decades long, subtle tapering off of loans to Latin America which could also have an effect.
Brazil is an especially interesting situation because Brazil is politically aligned with the U.S. but more economically aligned with China. Normally when a country is involved with China, they are completely involved with China but Brazil is an exception due it power and size. Brazil receives foreign and military aid from the U.S., which is good for political success of President Bolsonaro, while having an underlying trade reliance on China. Further research could be done to try and predict how Latin American countries will balance U.S.-China relations and whether trade agreements like MERCOSUR will help protect Latin American countries from predatory foreign intervention.
