FILE – The Chinese container ship Cosco docks at the Cocoli Locks in Panama City, Dec. 3, 2018.
Juan Pablo Cardenal, an expert in Chinese politics and economy and co-author of “The Silent Chinese Conquest,” says Beijing’s influence in the region varies by country, social and political conditions, and the availability of the natural resources that the Asian giant needs to meet the demands of its manufacturing sector.
“China uses its loans and its money as a penetration strategy throughout Latin America and in other parts of the world,” said Cardenal.
Venezuela: BRI model flop
When China first turned its attention to Latin America, Venezuela was a key target, given its status as a major oil producer with close ties to the United States prior to Hugo Chávez’s rise to power, says Parsifal D’Sola, founder and chief executive officer of the Bogota-based Andres Bello Foundation – China Latin America Research Center.
However, Venezuela’s disbursal of vast sums of state-owned bank resources from Beijing, calculated at around $65 billion, has served as a cautionary tale for China.
“By 2023, after more than $60 billion in loans, neither China nor Venezuela has anything to show for it, not a single project,” D’Sola told VOA. He added that China has since shifted to work more behind the scenes to recover the loans from Venezuela and stopped putting money into the country.
“Venezuela was supposed to be the first country with the first bullet train in the region, but it never happened. The bulk of that money was supposed to be used for the country’s oil and gas infrastructure, which imploded,” D’Sola explained.
“From Beijing’s perspective, Venezuela failed to uphold its end of the deal. This was supposed to be the model for China-Latin America cooperation, but it turned out to be the opposite.”
Defying U.S. sanctions, Venezuela has used its oil to pay off billions of dollars in debt to China. Millions of barrels of Venezuelan oil have been rebranded and shipped to China, according to a 2022 Reuters report based on sources familiar with the matter.
SEE ALSO: Chinese Defense Firm Has Taken Over Lifting Venezuelan Oil for Debt Offset, Sources Say
Despite China’s experience in Venezuela, the BRI model continued to attract the interest of Latin American countries. One simple reason, experts say, is because signing up is not difficult.
Joining the initiative is made through a “memorandum of understanding” that does not legally require the parties to deepen trade or investment, but does represent “a gesture of approval” of China’s policies by the participating country, according to D’Sola.
Participation in the BRI does not necessarily involve large loans or donations from China, D’Sola said. He added that based on tracking of participating countries, there is typically a slight increase in interaction or investments in the months following the signing of an agreement, but after that the relationship resumes its normal course.
Observers note that recent developments — including China’s tense relationship with the United States and Europe, the effects of the COVID-19 pandemic, and China’s own economic slowdown — have led to less big BRI spending and a more strategic approach by Beijing.
White gold
Cong Liang, deputy head of the National Development and Reform Commission, says that one area of focus is on more environmentally friendly projects, according to a recent report from China’s state backed Xinhua news agency.
“China will continue to boost the green development of the Belt and Road, better protect the environment, and bring benefits to the people of all Belt and Road partner countries,” Cong was quoted as saying.
China has stepped up its search for minerals used in green technologies. Beijing’s interest in Latin America includes the region’s vast lithium reserves, often referred to as the new “white gold.”
FILE – People attend a signing ceremony of an agreement between Bolivia and China to produce lithium at the salt flat of Coipasa and Pastos Grandes in Oruro, Bolivia, Feb. 6, 2019.
Three South American countries — Chile, Bolivia, and Argentina — make up the “Lithium Triangle,” which holds 68% of the world’s reserves of this key mineral needed for batteries and the green energy transition, according to the Bueno Aires-based think tank Consejo Latinoamericano de Ciencias Sociales.
Chinese companies are already involved in dozens of lithium extraction projects, especially in Argentina and Chile, said Juliana Gonzalez, a China and Latin America expert at Facultad Latinoamericana de Ciencias Sociales.
“The lithium reserves are very important in Bolivia, but they are not being extracted at an industrial level. In the case of Chile, yes, as well as in Argentina, which has witnessed an important boom in the last five years,” Gonzalez told VOA.
According to Gonzalez’s research, there are approximately 35 lithium extraction projects in various stages of development in Argentina. Of those projects, China has invested in nine, and Chinese investments primarily come into play when the deposits are ready for extraction.
China is also interested in other natural resources found in the South American region, including significant deposits of copper, iron and zinc.
Analysts say Peru, a key Chinese ally, is heavily influenced by Beijing because of its export dependence and trade agreements. It also has the most productive copper, zinc and iron mines in the region.
Bargain partner
Felix Maradiaga, a Central American researcher and public policy expert who has studied the differences in China’s relations with countries, says Beijing adapts its approach based on the nuances of each country’s government.
China’s relations with Costa Rica and Maradiaga’s native Nicaragua illustrate Beijing’s varied approach. While China has a non-ideological relationship with Costa Rica, Nicaragua has aligned itself with Beijing under the banner of “anti-imperialism,” he said.
“In the case of Costa Rica, China’s strategy has been primarily commercial, lacking the deeper political undertones that exist, for instance, in the case of Nicaragua, which I’ve dubbed ‘a bargain partner’ because establishing a relationship with Nicaragua came at a very low cost for China,” he explained.
Analyst Hernan Alberro studies the complexity of China’s relationship with Latin American countries and says it is challenging to understand the different strategies Beijing applies to each country in the region. China clearly knows what it is doing, he says.
“China knows much more about Latin America than Latin Americans know about China,” he said.
And while China’s overall investments in the Belt and Road have slowed, experts say Beijing will continue to grow its ties with Latin America to access raw materials to sustain its economy and to help realize its vision of a green BRI.
Source link : https://www.voanews.com/amp/bri-boosts-beijing-efforts-to-expand-influence-in-latin-america-/7313083.html
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Publish date : 2023-10-16 03:00:00
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