China a dynamic partner for LAC region

Nation can help Latin America, Caribbean eradicate poverty, improve quality of life

According to the International Monetary Fund, China has been the biggest economy in terms of purchasing power parity since 2016, and it was about 116 percent the size of the economy of the United States last year.

Comparing their GDP in 2022 in US dollar terms, however, China’s economy is only about 71 percent that of the US. If the current trend continues, it may take about a decade for China to surpass the US as the world’s largest economy.

The performance of China’s economy since its reform and opening-up, particularly its advances in technology, is increasingly worrisome for the US and the club of developed countries that it leads.

This preoccupation is also reflected in their concerns about the deepening of the relations between the Latin American and Caribbean region and China.

In a recent article in Foreign Affairs magazine, titled “China’s Latin American Power Play”, a scholar at the National Endowment for

Democracy’s Reagan-Fascell Democracy Fellowship Program presents a set of arguments against China’s presence in the LAC region.

The main argument of the author is contradictory in itself: While China’s presence in the region is very recent and dynamic, it is generating massive socioeconomic implications in the region.

You do not have to be a historian to understand that the massive presence of other countries in the region, such as European nations and the US for over 500 years, is much more significant to understanding the region’s socioeconomic situation in 2023.

Latin America and the Caribbean have suffered over 500 years of intervention by these countries, long before their rather recent encounter with China in the 21st century.

The Foreign Affairs magazine article acknowledges that China has important advantages in terms of economic incentives for Latin America and the Caribbean, as well as the world, in terms of investments and infrastructure projects, and thus highlights that the West should concentrate on human capital to prevent China’s “undermining democratic norms, institutions and the rule of law in Latin America”. Some clarifications are in order. First, in 2023, there is no debate in Latin America and the Caribbean regarding China “against the West”. The European Union, Japan, the US and other parts of the world have experienced substantial differences in their relationship with China in the past decade.

China has also differentiated its relationship with these and other countries through a huge portfolio of instruments including free trade agreements and regional initiatives.

The West versus China, as such, is an ideological abstraction that does not benefit Latin America and the Caribbean.

Second, in the past decade, China’s leadership has acknowledged its increasing global presence through the concept of a process of globalization with Chinese characteristics. In contrast to the globalization process since the Bretton Woods Agreement in 1944, China has proposed a modernization process in which people and high-quality development are at the center.

The country has not only become a significant economy, but also eradicated extreme poverty in the country, in addition to realizing substantial upgrading in terms of productivity and innovation.

Third, the relationship between the region and China in 2023 allows for exchange possibilities. For example, it is important to understand the increasing complexity and broad dimensions of the LAC-China socioeconomic relationship.

Furthermore, technical cooperation in renewable energy, the establishment of special economic zones and industrial parks, research and development efforts are all of particular relevance for Latin American and Caribbean countries and could become the basis for substantially improving the knowledge of China in the region in the long run.

Fourth, China’s global financing power has so far not been sufficiently understood. The Foreign Affairs article alleges several times that Chinese credit in the region poses a threat, as, according to the article, it will result in Chinese political intervention and overall “control in the region” — repeating the US allegations of a “debt trap”.

However, analysts such as Stephen B. Kaplan, an associate professor of political science and international affairs at George Washington University’s Elliott School of International Affairs, have been emphatic in highlighting that China’s credit in the LAC region is based on commercial rationality, rather than the Western approach of targeting political and macroeconomic changes.

Finally, it would not be fair to make China responsible for Latin America and Caribbean countries’ socioeconomic limitations in 2023.

Plenty of countries in the West are responsible for over 500 years of impositions on the region, while China offers concrete incentives for eradicating poverty and improving the quality of life for people in the region.