Former US President Clinton is right: the stupid economy will determine our lives, not the amount of artillery shells in our warehouses. Baron Munchausen was lifted high by an artillery shell and carried far away. We should not dream about it. This is not realistic, this is just an ad from producers of the shells.
"South of the United States border, China is ascendant.
Chinese leader Xi Jinping this week arrives in a region where China has replaced the U.S. as the dominant trading partner for most big economies, with the exceptions of Mexico and Colombia. Beijing has signed up most of Latin America and the Caribbean to an infrastructure program that excludes the U.S. In Peru, Xi will inaugurate a megaport to speed trade with Asia.
China is a voracious buyer of lithium from Argentina, Venezuelan crude oil and Brazilian iron ore and soybeans. The $286.1 billion in Chinese projects in the region tallied by the AidData research lab at William and Mary in Virginia -- such as metro lines in Bogota and Mexico City and hydroelectric dams in Ecuador -- is approaching the value of China's work in Africa, but with a new lending model and less backlash.
Xi is visiting South America to take part in leadership summits, including an Asia-Pacific Economic Cooperation forum this week in Lima, Peru, and a Group of 20 summit next week in Rio de Janeiro. Both are likely to illustrate what some have called China's economic marginalization of the U.S. in the region. While President Biden is expected, too, his stature will be diminished in the wake of Donald Trump's re-election -- and Xi has visited the region more than both of them.
Few see Latin America as the U.S.'s "backyard" anymore.
The region's nations generally pine for warm relations with the U.S., but often are seen as a secondary priority in Washington. Beijing's diplomats and executives, meanwhile, actively engage with local and national governments almost regardless of their political leanings.
"It's super frustrating because this region has everything you'd think American companies would want," says Ryan Berg, director of the Americas program at Washington's Center for Strategic and International Studies.
In addition to deepening economic ties, Xi promotes a governance model that breaks with the U.S.-led postwar order that he suggests is an outdated relic of colonialism. Xi's sustained attention to the region "is symbolic, and countries of the Global South need that recognition," said Alvaro Mendez, director of a unit at the London School of Economics and Political Science that studies China's influence.
Trump, who in his first term mostly focused on the region as a source of unwanted immigration, could force some of its countries into difficult choices if he pushes them to limit their China ties.
"Many Latin Americans are apprehensive about what's in store for them over the next four years on this critical issue," said Michael Shifter, a scholar of Latin America at the Inter-American Dialogue policy group in Washington.
Meanwhile, higher Trump tariffs could drive some nations closer to Beijing.
Chinese trade and investment has boomed across the roughly 40 nations of Latin America and the Caribbean, home to over 660 million people stretching from Mexico to Chile and Argentina, plus island-nations like Jamaica and Cuba.
China's construction of infrastructure including ports to move commodities mirrors how, all over Asia and Africa, China under Xi has cemented its presence by building bridges, power plants and stadiums. China also has less of the debt-collector image in Latin America than it has in other developing parts of the world, in part because Beijing has slowed new project commitments and adjusted how it has financed some work.
Beijing's largess isn't always beneficial. Is exports of capital and consumer goods in addition to chemicals and machinery give China a trade surplus with the region overall.
China is crowding in with manufactured exports such as Huawei Technologies telecommunication hardware and electric vehicles from BYD, which has taken over an abandoned Ford plant in Brazil. An influx of Chinese steel recently forced the closure of a large Chilean mill.
Some countries are raising tariffs on Chinese goods, and others see threats from big Chinese entrants to traditional sectors, like fishing. China's image also has been tarnished by shoddy construction, such as on a hydroelectric project in Ecuador, and limited regard for the environment and indigenous people, such as around copper mines in Peru.
China is attracted by the same attributes that should make U.S. multinationals eager to compete in the largely democratic region: abundant natural resources including critical minerals, human capital to deploy for manufacturing products like pharmaceuticals, growing consumer bases and rule of law.
Trade has given a lift to broader Beijing influence in a region that traditionally has allied itself with the U.S. Brazil recently joined China in putting forward a plan for ending the Ukraine conflict, and gives voice to its vision of a Global South to challenge the traditional U.S.-led order.
Argentina allows China to run a satellite tracking station for its space program, one of a growing number of quasi-military linkages. And Washington's nemeses in the region -- Cuba and Venezuela -- consider Beijing a friend and protector.
Washington worries that China's growing economic clout will provide Beijing deep influence over Latin American governments. The head of the U.S. Southern Command, Gen. Laura Richardson, has warned about Beijing's encroachment in the region. In response to China's advances, the White House has sought to build lasting institutions in developing nations to attract investment.
"This administration has focused very much on how we try to bring private-sector investment overseas, the important impact that can have in high standards and ensuring that the terms of agreements are such that they are contributing to host countries' longer stability or long-term fiscal stability," a senior administration official said, noting that China has slowed its commitments amid headwinds at home and problems with some overseas projects.
A leading motivation for Xi's attention to the region is isolating the democratically governed island of Taiwan: Seven of the 11 nations worldwide that maintain diplomatic relations with Taipei are in the region, including Guatemala, Paraguay and Haiti. Five that switched recognition to Beijing under Xi's watch, including Honduras and Panama, got showered with Chinese deals.
Beijing has locked in mineral and foodstuff purchase agreements, plus deals to operate ports in places like Peru and trade in yuan, to fortify supply lines against risks that Chinese militarism one day sparks calls among Western powers to embargo it. In such a scenario, Beijing could be expected to offer positive inducements toward G-20 nations like Brazil to diffuse the kind of decoupling pressure Russia faced after it invaded Ukraine, according to a new report from the Rhodium Group and Atlantic Council.
Not everything cuts Beijing's way: Shortly before Xi's trip, Brazil appeared to reject its overtures to formally join the Belt and Road Initiative, a blow to a program that by the CSIS's count includes 22 of the 26 Latin America and Caribbean nations eligible for it.
Today, U.S. policymaking toward the region is heavily slanted toward illegal immigration and narcotics, instead of how its more recent general political stability and growing middle classes could work to America's advantage." [1]
1. World News: Latin American Trade Is Dominated by China. Areddy, James T; Dube, Ryan; Ruiz, Roque. Wall Street Journal, Eastern edition; New York, N.Y.. 14 Nov 2024: A.8.
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