The Middle Kingdom: New global strategy & Latin America

The Middle Kingdom: New global strategy & Latin America

Antoine Masquelin – Irelac & Egmont Institute – Latin America Programme

December 2018

This Paper is an overview of Chinese investments in Latin America.

In 2016, the Chinese government released its second policy paper on Latin America and the Caribbean. With this reference text, China is committed to building a new relationship with Latin America and the Caribbean with mutual trust in the political field and a win-win cooperation on the economic front but also a very comprehensive range of areas including infrastructures investment, environmental protection, social development, science and innovation as well as cultural and geopolitical aspects. The proposed infrastructure cooperation is part of the « Belt and Road Initiative » (BRI) launched by President Xi Jinping in 2013.
Much more than a vast investment programme to improve regional cooperation and connectivity, the BRI is a concrete example of « soft power » implementation in Latin America. It is like public diplomacy; it does not work by force at all but instead invites support through persuasion rather than compelling submission with the threat of systems failure or economic ruins. After the failure of neoliberals policies, Latin America is looking for alternatives models and left-wing governments see China as a better solution than the United States or the European Union.
Meanwhile China continues to develop and expand its economic and diplomatic engagement with the New World. China has four mains objectives in its engagement with Latin America: ensuring access to LAC’s natural resources and markets; Gaining LAC support for its foreign policies including the acknowledgement of the « One China » policy; improving the understanding of Chinese perception; gaining geopolitical influence in « United States backyard » where the European Union also attempts to provide an alternative way.
Expectations are different on both sides, for Latin America, China represents a large export market and a new source of investments and financing. A harmful effect is the growing dependence on China with a trade relationship relying on the export of raw materials against import of manufactured goods. However, China has introduced its “Going Global strategy” in Latin America seizing the opportunity offered by the United States’ retreat from its backyard.
Examining concrete influence of Chinese investments and infrastructures projects is the first step for prospecting solutions. Through two different visions of cooperation the Chinese alternative becomes a two-face system.