How to counter China’s influence in Latin America
President Biden clearly had China in mind when, at the inaugural Americas Partnership for Economic Prosperity, he promised our neighbors in Latin America “… a real choice between debt-trap diplomacy and high-quality, transparent approaches to infrastructure and to development.”
The president’s remarks touched on a key theme that the U.S. needs to translate into action: Democracy and transparency aren’t just tools to “win” the great power competition with China; they’re what deliver the best results for citizens across the Southern Hemisphere.
America’s renewed attention to this critical region is long overdue. The People’s Republic of China is now the largest trade partner for nine countries in Latin America, and 21 nations in the region have signed onto China’s Belt and Road Initiative. Although Chinese infrastructure projects have been disastrous in countries like Ecuador, in other places they have proven popular, especially in energy generation.
China made these inroads due to the (mostly false) perception that an absence of stringent labor or environmental regulations make its investments less expensive and better targeted than America’s. As a result, in critical sectors such as infrastructure, 5G telecommunications and power generation, China has outpaced the United
States in Latin America.
If the U.S. is serious about prevailing in the geopolitical contest with China, our Latin America strategy requires urgent attention, and should prioritize strengthening Latin America’s democratic institutions. Improved accountability to citizens will enable these countries to demand higher standards from all foreign investors, exposing the costs associated with China’s “no strings attached” approach — such as extensive corruption and environmental damage — while highlighting the advantages of greater cooperation with America.
Polling from the International
Republican Institute indicates that citizens in Latin America are generally unaware of the financial activities of the Chinese state. In Panama, 62% of respondents were unaware of any major Chinese investment in their country, despite a portfolio including a cruise terminal, convention center, and a new bridge over the canal.
The U.S. must work harder to raise the awareness among governments across the region; they play a central role in procurement for large infrastructure projects, making them particular targets for China’s outreach.
Similarly, the U.S. should lean into the democratic nature, transparency, and competitiveness of procurement processes in U.S.-funded projects to enhance our advantage, especially those under the Inter-American Development Bank (IDB). China is a member of the IDB, and while companies from China should have the same right to compete as those from any other member state, the U.S. should coordinate with other IDB members to demand that China-based companies meet commonsense standards on corruption, collusion and investments with potential dual-use military or espionage capabilities.
Finally, support for a robust independent media is crucial. Genuine investigative journalism can help shed light on the unfavorable terms of Chinese investments, its harmful environmental impact, and labor abuses by China’s state-backed companies. The U.S. should do more to protect reporters facing threats, harassment, and even violence because of their work on sensitive topics like corruption in Latin America. The U.S. can also help foster the professional networks journalists need to expose the complex web of China’s investments.
The long-standing trade links and historical ties between the U.S. and democracies in South America present immense opportunity for engagement. The U.S. should not look to “counter” China simply for the sake of great power rivalry. By tending to the economic and democratic well-being of our partners and neighbors, the American government will advance both Latin American and U.S. core interests.
Casey Cagley is the advisor for Latin America and the Caribbean at the International Republican Institute. Matt Schrader is the advisor for countering foreign authoritarian influence at the International Republican Institute.