The Dragon Descends Southwards: Chinese Foreign Policy in Latin America Warrants a U.S. Response

Former Secretary of Defense Dr. Mark T. Esper Visits U.S. Southern Command Headquarters in Doral, FL in January 2020. Photo Credit: U.S. Department of Defense, Army Staff Sgt. Nicole Mejia

This piece is co-authored by Center for Strategic and International Studies Americas Program Senior Fellow, Dr. Ryan C. Berg, and SSP student, Allison Schwartz.

In his annual posture statement before the US Congress, Admiral Craig S. Faller, Commander of United States Southern Command (SOUTHCOM), identified the People’s Republic of China as the external state actor of greatest concern in Latin America and the Caribbean.[i] Faller’s testimony identifies China’s growing trade ties, infrastructure investment programs such as the Belt and Road Initiative (BRI), and more recently, its aggressive attempts to link its assistance in fighting COVID-19 to a host of strategic interests, such as 5G infrastructure and Taiwan’s diplomatic recognition.[ii] In Faller’s estimation, the “front line” in the geopolitical competition with China now resides south of the US border.[iii]

This year’s posture statement highlights a concerning deficiency: while buzzwords like “strategic competition” and “great-power rivalry” have motivated a desire for greater action, in practice, there has been very little thinking about the role of the United States’ shared neighborhood and the strengths (and weaknesses) it brings to bear. Quite simply, the US must contemplate the role of Latin America and the Caribbean in the emerging competition with China, lest it find itself facing strategic insolvency.

China’s Presence in Latin America and the Caribbean

China’s principal interaction with the region is economic. The country’s economic rise in Latin America and the Caribbean has skyrocketed over the last decade, which saw trade increase more than twentyfold.[iv] Building on hundreds of agreements in the region’s energy, infrastructure, transportation, and other strategic sectors, 19 countries in Latin America and the Caribbean have joined China’s BRI.[v] In 2019 alone, Chinese companies invested $12.8 billion in Latin America, a 16.5 percent increase over 2018 investment figures.[vi] According to the American Enterprise Institute’s China Global Investment Tracker, Chinese investment in the region fell precipitously to $4.8 billion in 2020, with the largest investments occurring in Argentina, Brazil, Chile, Colombia, Guyana, and Peru.[vii] Despite falling investment levels during the pandemic, Chinese economic involvement in Latin America remains robust, rising to the level of top trading partner for Brazil, Chile, Peru, Uruguay, and Venezuela, among others.

Chinese trade with the region increases its economic clout and undercuts US influence in its own hemisphere. China’s rampant human rights abuses, malign activity in the South China Sea, predatory trade and lending practices, and intellectual property theft have not deterred Latin America. Some Latin American countries have evinced a preference for Beijing’s investment style over that of the US, since environmental standards, working conditions, and transparency concerns are neither foremost in Chinese business contracts with the region nor all that likely to be enforced. Worse, China has even participated actively in several of the region’s illicit economies, long the bane of Latin America and the Caribbean.[viii]

The Next Frontier: Conversion of Dual-use Assets?  

While the cutting edge of China’s engagement with Latin America and the Caribbean is economic, what follows from a decade of such frenetic economic activity could be even greater cause for concern. A renewed American focus and reinvigorated pathways for strategic planning, such as the Quadrilateral Security Dialogue (“the Quad”) comprised of Australia, India, Japan, and the United States likely have increased China’s perception of encirclement. This dynamic could lead China to seek pressure points against the United States to counterbalance an increasingly circumscribed theater at home. As a region, Latin America and the Caribbean provides an opportune spot for China to send a forceful message to the United States—and to foment security concerns on America’s doorstep.

The largely economic character of the China-Latin America relationship does not imply that it is somehow benign. China’s economic presence has shown the capacity to drift easily into the military and political domains—a lesson gleaned from observing other regions of the world. For instance, China’s deep economic relationship with Pakistan quickly evolved to encompass a worrisome military partnership.[ix] Latin America and the Caribbean will be no exception. Indeed, the region has witnessed the start of a transformation of critical dual-use assets, often facilitated by meetings of Chinese Communist Party officials from the International Liaison Department with mainstream political parties in Latin America.[x]

China maintains several dozen agreements to either build or expand deep-water ports in the region, which could acquire military significance rather quickly. The country’s growing partnership with Panama—which has been fêted by Beijing since unexpectedly dropping its recognition of Taiwan in 2017—could lend itself to privileged agreements to access the Panama Canal. Already, the US narrowly averted what would have been a symbolic and strategic disaster when it staved off a Chinese plan to build its new embassy at the mouth of the canal, through which two-thirds of the ships transiting to and from the US pass.[xi]

Most prominently, China has erected a space station, operated by the People’s Liberation Army, in Neuquén Province in southern Argentina. Ostensibly for space exploration, the base has obvious dual-use capabilities, and astonishingly, it operates without any Argentine oversight.[xii] This is part of a burgeoning presence in Argentina’s sparsely populated Patagonia region, where the ultimate prize could be the Strait of Magellan, a strategic chokepoint between the Atlantic and Pacific Oceans large enough to accommodate the transit of an aircraft carrier.[xiii]

Avoiding Strategic Insolvency

Beyond voicing its occasional objections, the US has done very little to prevent China from cashing in on its economic relationships in Latin America and the Caribbean. Too often, US policy responses have been half measures at best—fleeting attempts to convince the region that it can offer a better alternative. There is an urgent need for the US to ruminate on the role of Latin America and the Caribbean in its efforts to deny China the ability to consolidate spheres of influence, and from there, rewrite the rules of international order. Given perennial resource-constraints in Latin America, more work needs to be done to determine the large-scale regional developments that should prompt a firmer US response, as well as the frameworks of action the US could leverage to push back.

Meanwhile, the US government must undertake a comprehensive assessment of China’s relationship with Latin America—as required by a recent bill introduced in the US Congress.[xiv] After an official assessment of the totality of China’s economic and security threats to the region, the US will be in a better position to avert geopolitical insolvency by developing a comprehensive plan for competition in its shared neighborhood. In the immediate term, however, the US should jump into the “vaccine diplomacy” game, reminding its hemispheric neighbors that the US not only possesses technical competence in the form of multiple efficacious vaccines, but that it still cares about the health, vitality, and many other bonds that link it inextricably to the fate of its southern neighbors.[xv]

Ryan C. Berg is Senior Fellow in the Americas Program at the Center for Strategic and International Studies (CSIS). Allison Schwartz is communications assistant at the American Enterprise Institute (AEI) and a masters candidate in the Security Studies program at Georgetown.