Dragon's Dance: China's Tango of Trade and Military Might in Latin America
Strategic Daily: "Analyst S" - an expert on South American matters provides their analysis on China's influence in Latin America.
China has emerged as a major economic and political force in Latin America, establishing itself as the top trade partner for numerous countries including Chile, Peru, Brazil, and Argentina. This growing influence is evident in the steady rise of Chinese investments across various sectors such as infrastructure, energy, mining, and technology.
On the diplomatic front, China has been effectively leveraging both bilateral and multilateral forums to enhance its engagement in the region. A key strategy in this regard has been to draw countries like Panama, the Dominican Republic, and El Salvador away from recognizing Taiwan, with the overarching aim of isolating Taiwan while simultaneously bolstering China's global image.
In the military sphere, China's influence is also expanding. It has been actively selling arms, satellites, and technology to nations like Venezuela, Bolivia, and Argentina. Furthermore, China has intensified its military exchanges and training programs with regional forces. This growing military presence and cooperation are raising concerns about the potential displacement of U.S. influence in the region.
The Southern Cone
In the Southern Cone, China has made substantial investments in infrastructure projects, including dams, roads, railways, and ports. Noteworthy projects include the modernization of the Belgrano Cargas railway in Argentina and the Bi-Oceanic Railway that connects Brazil and Peru.
Chinese state-owned enterprises have secured significant stakes in key energy assets. This includes hydroelectric dams and oil and gas pipelines owned by Petrobras in Brazil. Furthermore, companies like CNOOC and Sinopec have poured billions of dollars into Argentina's oil and gas sector.
On the trade front, China has established bilateral free trade agreements with Chile, Peru, and Costa Rica, enhancing its market access and boosting exports of manufactured goods. This often comes at the expense of local industries. A similar FTA is currently being negotiated with Uruguay.
Cybersecurity concerns have also emerged, highlighted by a 2018 cyberattack against Argentina's IT ministry by a China-linked hacking group. The presence of Chinese telecom firms such as Huawei and ZTE raises additional worries over 5G networks and data privacy.
In the realm of space exploration, Argentina and Chile host Chinese space monitoring and telemetry stations. These facilities not only bolster China's space tracking capabilities but also carry potential military implications.
In the agricultural sector, Chile, Argentina, and Brazil are significant food exporters to China, playing a crucial role in meeting its food security needs. This dependency grants China considerable influence in the region.
Chinese criminal organizations are active in the tri-border area of Argentina, Brazil, and Paraguay, engaging in activities like money laundering, contraband, human trafficking, and drug trafficking.
In the mining industry, Chile, Peru, and Bolivia supply lithium, copper, iron, and other minerals essential to China's growth, with China dominating trade and investment in these sectors. This resource dependency further increases China's leverage in the region.
Argentina's relationship with China is multifaceted, involving the construction of a Chinese space tracking station, reliance on Chinese reactors and financing for nuclear energy, and agricultural exports like soybeans.
Meanwhile, Bolivia is deepening its ties with China through loans, business deals, and technology acquisitions like satellites and drones. However, there are growing concerns about the potential exploitation of Bolivia's lithium reserves by Chinese interests.
Argentina’s Military Cooperation
Argentina's military cooperation with China has been intensifying, marked by significant arms purchases and technology acquisitions. In 2015, Argentina made a notable purchase of 110 Chinese armored personnel carriers for $120 million, marking the first time the Argentine Army adopted Chinese military vehicles.
This shift towards China for military equipment is seen by some analysts as a result of Argentina's challenging economic relations and limited access to Western military equipment. The country has faced difficulties in replacing its aging fighters and tanks.
However, this growing military relationship with China has sparked criticism. Critics argue that Argentina is compromising the regional military balance by integrating China into its defense industry and providing it with a strategic foothold in the South Atlantic. Particularly concerning is the potential enhancement of China's monitoring capabilities in the South Atlantic, an area where the United Kingdom also operates, raising fears of Argentina sharing sensitive data with China.
In a significant development in February 2022, Argentina agreed to purchase 12 JF-17 fighter jets, co-developed by China and Pakistan, for a sum of $664 million. Additionally, Argentina has shown interest in acquiring Chinese radar systems.
These military dealings with China stand in stark contrast to Argentina's strained economic relations with the United States and have the potential to disrupt the regional military balance. The possibility of Argentina sharing radar technology with China is a particular concern, as it could significantly enhance China's surveillance and monitoring capabilities in strategically important regions.
Aid and Assistance
During the COVID-19 pandemic, China played a significant role in providing aid and assistance to Latin American countries, encompassing a wide range of support measures.
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