China Engages Latin America: Distorting Development and Democracy? 303096048X, 9783030960483

Table of contents :
Preface
Contents
About the Author
Chapter 1: Introduction
Context
China Engages the World
Latin America as an Area of Focus to Examine Chinese Engagement
The Hemisphere’s Response
Relevant Scholarship
Organization of This Work
Chapter 2: China’s Efforts to Reorient the Global Economic Order to Its Benefit
China’s Global Objectives
China’s Economically Oriented Strategy
The Bid for Connectivity
Supporting Strategies
Political Engagement
The Role of “China’s Example” and Multipolarity
China’s Incubation of Populism and the Export of Digital Authoritarianism
Engagement with Multilateral Institutions
China’s Financial Strategy
Security Strategy
PRC Style of Pursuing Its Goals
Chinese Soft Power
Why It Matters
Alternative Perspectives
China as Just a Poor Country Trying to Develop?
China’s Engagement with Latin America Is Decelerating?
Doesn’t Everyone Do This?
Isn’t This Just Corruption?
Chapter 3: The Development of China’s Relationship with Latin America
Early Ties
The Chinese Diaspora
Evolution of the China–Latin America Political Relationship
The Expansion of Chinese Trade with Latin America
The Expanding Presence of Chinese Companies on the Ground
A More Realistic Attitude Toward China
Patterns of Chinese Engagement
Chapter 4: China’s Economic Struggle for Position in Latin America
Overview
Pursuit of Secure Access to Resources and Associated Value Added
Petroleum
Mining
Agriculture, Wood, and Fishing
Pursuit of Secure Access to Markets, Technology, and Connectivity
Land Transportation Projects
Ports
Riverine Infrastructure
Clean Energy Generation, Transmission, and Distribution
Telecommunications
Surveillance Technologies
Space
Financial Services, E-commerce, and Data
China’s Export of Digital Authoritarianism to the Region
Chapter 5: Chinese Soft Power
Overview
Cultural Affinity Toward the PRC in Latin America and the Issue of Trust
Expectations of Benefit as Chinese Soft Power in the Americas
Educational Diplomacy
Other People-to-People Diplomacy
Outreach to Chinese Communities in Latin America
Chinese Media and Public Diplomacy Activities
PRC Covid-19 Medical Diplomacy as Soft Power
Chapter 6: The Struggle for Diplomatic Recognition and Its Implications
Overview
The Evolution of the Taiwan-PRC Struggle in Latin America and the Caribbean
The PRC Advance in Panama
The PRC Advance in the Dominican Republic
The PRC Advance in El Salvador
Conclusion
Chapter 7: The Question of Leftist Populist Regimes
Overview
The Mutually Reinforcing Cycle Between China and Leftist Populist Regimes
China in Venezuela
China and Ecuador
China and Bolivia
China and Argentina
China and Cuba: A Special Case
Prospects for PRC Advance in Latin America Through Leftist Populist Governments
Chapter 8: Military Engagement and Its Role
Overview
The Purpose of Chinese Military Engagement in Latin America
PRC Arms Sales to the Region
In-Region Engagement and Military Visits
Training and Professional Military Engagement
Police and Law Enforcement Cooperation
Implications and Conclusion
Chapter 9: Impact of Covid-19 in Accelerating China’s Advance
Overview
China’s Covid-19 Medical Diplomacy
Increased Importance of China as a Source of Demand
Increased Need for Chinese Loans and Investments
An Increased Array of Leftist Populist Governments Receptive to China
China’s Advancing Presence on the Ground Through Acquisitions
Challenges for China in the Region
Chapter 10: Why Does It Matter and What to Do
Overview
Why Does It Matter?
The PRC as a Newcomer to the Global System
China, Latin America, and US Policy
Recommendations
Transparency
Technically Competent, Fair, and Open Evaluation Mechanisms
Application of National and International Laws
Pushback with Alternatives Against Chinese Projects in Sensitive Areas
Informed Public Diplomacy and Tailored Communication Strategies
Conclusion

Citation preview

China Engages Latin America Distorting Development and Democracy? R. Evan Ellis

China Engages Latin America

R. Evan Ellis

China Engages Latin America Distorting Development and Democracy?

R. Evan Ellis Strategic Studies Institute U.S. Army War College Carlisle, PA, USA

ISBN 978-3-030-96048-3    ISBN 978-3-030-96049-0 (eBook) https://doi.org/10.1007/978-3-030-96049-0 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

For my children Amelia, Brandon, Anthony, Constantine, and Ian. I am very proud of each of you and love you very much.

Preface

In the more than 18 years that I have followed the expanding engagement by the People’s Republic of China (PRC) with Latin America, I have wrestled with its meaning for the region that I love, and for my own United States. The time that I have spent in China on academic and other visits and my interactions with Chinese friends and colleagues leave me with the strong conviction that the Chinese people, like all others, have every right to be prosperous and secure. Yet my research on and experience with Chinese global engagement over these years as the wealth, power, and self-confidence of the PRC has grown has left me profoundly uneasy. For me, my growing awareness of the fragility of the international order with its invaluable albeit imperfect ideals of individual rights and dignity, democratic expression, development, and the rule of law, and the gradual but unmistakable impact of China on that order, led me to write this book. As I looked to Latin America, my own academic focus, I could see in its engagement with China the same self-destructive dynamics of personal over national interests, exuberant politics, and short-term thinking that has sabotaged its aspirations from colonial times. In the face of Latin American vulnerability, I could see China’s pursuit of its strategic commercial interests with diplomacy, discipline, and persistence, transforming and economically subjugating the region more extensively than any colonial order or “World System” that Latin America has ever engaged. Because my own work, as a Latin American research professor for the US Army War College, is in the security sector, I struggled to define, in terms appropriate to national-level decision makers and strategic planners, the nature and implications of China’s advance. That thinking was helped vii

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by the year that I spent detailed to the Policy Planning staff of the US State Department (S/P), with responsibility for Western Hemisphere Affairs (WHA). It became clear to me that China’s strategy, although fundamentally economic, was nonetheless strategic in its aims and impacts and that its efforts in the political, institutional, military, and other spheres responded to the demands and implications of those mostly economic objectives. I had listened to colleagues declare innumerable times that the Chinese were playing wéiqí (“Go”), a war of position, while we were playing Chess (or, worse yet, checkers), a war of attrition. In 2018, during a visit to Panama talking to businessmen and other figures about Chinese engagement there, I had a profound revelation: we had it only partly right. The PRC was not playing a war of military or political position, but one of economic position, in which what mattered was not so much physical geography but sources of supply, value chains,1 markets, strategic technologies, and infrastructure. For the first 14  years of my professional career, I had worked in the private sector. Suddenly, as I looked at PRC initiatives such as the Belt and Road Initiative and associated “Digital Silk Road,” it became clear to me that in understanding China, we were not asking the right questions to the right people. What China was doing was far more apparent to a business executive than a political or military leader. In the spirit of Ted Fishman’s China, Inc.,2 the PRC was acting as a diversified internationally operating company in which the Chinese people were the shareholders, seeking to use the resource of the corporation to enter new strategic markets, build monopolies, capture the value added in production chains, and achieve secure access to markets and critical sources of supply. Like a major international company, but in a manner far more effective and on a scale far greater than any that had existed before, the PRC has invested in political engagement and international institutions to head off threats to and ultimately facilitate its corporate objectives. It has created a powerful “security arm,” not because it had an interest in the unprofitable and counterproductive business of military intervention, but because it understood that as the company “grew” and did business in increasingly dangerous places, it would have to be prepared to both protect its operations and people and, as a last resort, “defend” the company against competitors who might challenge it in a military rather than merely an economic, political, and institutional fashion.

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With this ordering of ideas, what the PRC was attempting to do and how both its commercial and noncommercial initiatives fit in became increasingly clear for me. In following China’s global engagement from the early 2000s, I witnessed the evolution of the PRC’s initially clumsy efforts to generate value by connecting mines and oilfields that it owned to ports that it operated via roads and railroads that it built. These efforts evolved into more sophisticated initiatives for toll operations on riverways, telecommunications, electricity generation and transmission, financial infrastructure, and e-commerce. What the PRC was doing was recognizable to anyone familiar with the criticism of Microsoft for using its Windows Operating System to advance its position in the software industry or the similar criticisms of Google, Facebook, and others for attempting to use their control over software gateways and social media to build an empire across the internet. As I reread various Chinese policy documents and speeches, I was impacted by the degree to which Chinese actions were, in broad terms, remarkably consistent with what they said they were going to do, although we in the West seldom understood at the time what they had meant by their words. As I thought about what this all meant for both Latin America and the United States, I could see a pattern in which both were losing ground and cherished values such as democracy and freedom of expression were withering in the process. Chinese businesses, with the support of their government, were becoming increasingly adept at operating in the region, with the resources and technology to advance their interests, and buying their way past obstacles, capturing the value added of the sectors as they advanced and bringing their suppliers and other partners with them. In this messy and evolving struggle, Latin American governments and businessmen were their own worst enemies at the strategic level. Enamored by the prospect of making more money through selling to the Chinese market or partnering with Chinese firms locally, they signed agreements, sold off assets, and agreed to deals that generated individual profits, while little by little allowing the Chinese to acquire knowledge and experience, strategic technologies, capabilities, and positions across value chains in the region. Business analysts reassured themselves that the Chinese were less sophisticated in the local market than they were, or were overpaying for assets, failing to see the bigger picture of how the Chinese were learning from their experience once on the ground, developing ever more

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competitive products and services and building strategic positions of enormous value. As I followed China’s advance, I noted how small initial opportunities, exploited through deliberate efforts that created reinforcing effects, ultimately enabling the Chinese to develop dominant positions in sectors and synergies between Chinese companies across sectors. I became increasingly concerned as I saw China’s growing economic power, expanding local presence, and increasing skill of Chinese business representatives in the region lead to increased receptivity by political leaders and others who hoped to benefit from working with the Chinese. I saw how the pursuit of commercial deals with China led my business colleagues to censor their comments about the PRC. I saw my academic counterparts behave in a similar fashion, tempering their comments on China, mindful of preserving their access to colleagues in the PRC, and desiring not to offend them with unnecessarily critical public expressions. I realized that those censoring themselves were the very persons that the region most needed to use their expertise to help the region better organize itself with respect to the China challenge and navigate the perils of doing business with the PRC as the region sought the benefits from doing so. As I looked to China itself and the countries in which it was influential, I acknowledged that the PRC was not actively seeking to build a network of corrupt, authoritarian client states. Nonetheless, the effect of suppressing expression when it came to issues of sensitivity to the PRC, providing resources that help keep China’s friends in power regardless of how corrupt and undemocratic they are and supplying those friends everything from anti-riot vehicles to surveillance to systems supporting information and social control, among other activities, together had the powerful effect (however “unintentional”) of nurturing subservient, corrupt, authoritarian regimes as the PRC economic presence in the region grew. As I considered China’s advance and its impact on the development and economic structure of Latin America, I found the dynamics strikingly parallel to those described by dependency theory, influential in academic and political circles in Latin America in the 1970s. The logical implication of China’s trajectory in Latin America, if not altered, was that its companies would increasingly dominate the value-added, associated economic decision-making and, by implication, politics of the region. In this progression, Latin America was moving toward a world in which Chinese companies, through their presence in the region and ownership of operations in key sectors, were increasingly realizing the principal

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benefits of extracting its petroleum, mining products, timber, agricultural products, and other resources, although employing some Latin American workers and technicians under Chinese bosses. Increasingly, it was Chinese companies, not Latin American ones, who were realizing the value added of moving and transforming those goods, ultimately selling the high– value-added Chinese products and services back to those in the region to those who could afford them. As I reflected on the PRC’s role in incubating dependent populist governments and inducing the silence of democratic ones on issues sensitive to China, I recalled the descriptions of core-periphery relations from Immanuel Wallerstein’s writings on world system theory3 and understood that in the new China-dominated system into which Latin America was increasingly integrating itself, the governments of the region would have a Latin American face, with local elites allowed to do whatever they wished, so long as they did not challenge the equities of the Chinese companies and their operations. From my observations of China’s management of its own political system, however, as well as its treatment of people under its dominion such as the Uighurs in Xinjiang and, more recently, the citizens of Hong Kong, I realized that while the new system functioning for China’s benefit might not feature overt Chinese rule, direction, or military intervention, that system, empowered by modern Chinese mechanisms of surveillance and social control, was likely to be more ruthless and repressive than Latin American historical references such as colonialism or “imperialism” ever were. I further realized that the transition from the old order to the new one is already well underway and accelerating. The trauma of Covid-19 pandemic that paralyzed the region during 2020–2021 temporarily slowed China’s commercial advance and associated influence but also set the stage for its acceleration through the increased importance of Chinese imports relative to traditional Western markets, the expanded need for Chinese investments and loan-backed projects and the associated pressures for desperate Latin American governments to accept Chinese terms, the opportunity for PRC-based companies to expand their positions on the ground in Latin America as distressed US and European companies sold off their assets in the weakly performing Latin American markets, and the additional opportunities provided to China by the expanded array of populist governments in the region. While Covid-19 thus gave me a frightening glimpse of what was to come in the region, the deepening global tensions with the PRC that

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occurred during both the second half of the Trump administration and the beginning of the Biden administration in the United States made me realize that such an enormous expansion of Chinese economic and political influence in the US near-abroad would not come without significant conflict with the United States, sooner or later, even if that conflict did not take on an explicitly military form. With respect to sources, the reader will note that I rely heavily on journalistic accounts. This is not intended to be a discourse about different schools of interpretation regarding Chinese behavior, but rather, my interpretation of specific documented Chinese activities and how they can be understood. To this end, my preference has been to use journalistic reporting about individual Chinese investments, visits, or other events, generally in English or Spanish, which are my two primary languages. Of course, scholars will note that journalistic accounts may not have the academic or integrated perspective that discussions in more refined works like chapter books do, and there are sometimes questions of credibility of sources. Wherever possible, I have sought to use journalistic sources to establish facts, rather than opinions, and use the most credible periodistic account of the fact being established that I could find. Insofar as I have published on Chinese engagement in Latin America for over 18 years, in the interest of space, I do reference my own work, which may contain a more detailed discussion of the activities I mention, rather than introducing an excess of notes documenting individual activities. I have also relied heavily on discussions that I have had over the past 18 years following this subject with colleagues in both the United States and the region. In some cases, these were formal interviews in support of other works of mine which I have referenced. Often, those discussions were held with the understanding that while I was free to use and write about the insights from such conversations, the source did not wish to be publicly named. Indeed, as Chinese power has grown, I have noted a worrisome increase in colleagues who, while deeply concerned about Chinese activities and the growth of Chinese power, were reluctant to have their names associated with such comments. I have made a point to indicate, where appropriate, when something has come from an interview, even if I cannot publicly name the source. In the interest of the book’s readability, however, I have done so parsimoniously. While I do not speak Mandarin or read Chinese characters, this is not a book that pretends to analyze China’s internal discourse, but rather, what it is objectively doing. To that end, accepted English- and

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Spanish-language interpretations of the names of Chinese leaders and companies and translations of major policy documents are adequate. While I have enormous appreciation for my colleagues who have mastered the Chinese language, I respectfully do not accept the insinuation made by some that only those who do so are qualified to make academically legitimate observations about Chinese behavior and their implications. I did not write this book to work against China’s “rise” or its advance in Latin America and the Caribbean. I wrote it with the hope of heading off a “train wreck.” I worry that the current trajectory of Chinese engagement in the Americas (among other parts of the world) and its associated effects will not end well, either for the region, for the United States, or for broader China-US peaceful coexistence. Moreover, my more limited analysis of Chinese engagement with other parts of the world leads me to believe that the dangers I see from Chinese in Latin America are repeated across the globe, with countless opportunities for bad results and conflict. I have thus written this book in the interest of calling attention to the dangers of the current trajectory and promoting a more healthy, sustainable form of Chinese engagement in Latin America through strong, democratic institutions in the region, in a transparent and law- and rules-based order in which that engagement, like that with the United States, the European Union, Japan, South Korea, Australia, and countless others, can truly benefit the peoples and development of the region. It is important to note that this book is written primarily for a US audience. Its content and policy recommendations are thus focused primarily on the interests of that audience. There are many people to whom I owe a debt of gratitude with respect to the present work. I would like to thank my sister, Stephanie Kerrigan, and her family, who have always been there for me. I would also like to thank my colleagues and leadership at the US Army War College Strategic Studies Institute, whose support to my work, and all the time and supporting engagements it has involved, has been invaluable. Having worked for more than 27  years in the private sector, academia, and multiple US government organizations, I have never had a better, more supportive work organization and group of colleagues. I would especially like to thank the head of our research department, COL George Shatzer, as well as the head of the Strategic Studies Institute (SSI), Dr. Carol Evans, COL (R) Tom Kardos, COL Matt Lawrence, and my many distinguished colleagues at SSI, including Dr. John Deni, Trey Braun, Tony Pfaff, Roger Cliff, Nate Freier, Chris Bolan, John Schaus,

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and Leonard Wong. I would also like to thank Carol Kerr, perhaps the best public affairs officer ever, and my Latin America–facing colleague and mentor on the teaching side of the Army War College, COL Barbara Fick. With respect to those who provided important intellectual insight and contributions for this work, there are many to acknowledge: In the United States, very dear friend and distinguished colleagues, Maria Velez de Berliner, Gustavo Coronel, Miles Yu, Mike Urena, Jorge Rosenblut, Erik Bethel, Ryan Berg, Kimberly Breier, Landon Loomis, Kristie Pellichea, Carrie Filapetti, Doug Farah, Roger Noriega, Juan Cruz, Sergio de la Pena, Dan Runde, and Pedro Burelli, among others. In Argentina, Patricio Giusto, Fabian Calle, and Andrei Serbin Pont. In Bolivia, Ronald Maclean, Gonzalo Montenegro, and Henry Oporto. In Brazil, Ricardo Gomes de Paiva, and Wilson Almeida, among others. In Chile, Jorge Heine, Pamela Arostica Fernandez, Maria Montt Strabucchi, John Griffiths, Enrique Alvayay, Rodrigo Arce, and Richard Sanchez. In Colombia, Alberto Mejia, John Marulanda, Juan David Escobar, Nick Lopez, Vladimir Rouvinski, and Steve Salisbury, among others. In the Dominican Republic, Ambassador Juan Guiliani, Ambassador Nestor Ceron, and Rosa Ng, among others. In Ecuador, Lorena Herrera, Sebastian Hurtado, Ramiro Crespo, Santiago Mosquera, Fernando Santos Alvite, Maria Belen, Adrian Bonilla, and Javier Giler, among others. In El Salvador, Miguel Siman and Juan Carlos Stabben. In Germany, Ana Soliz, Nele Noesselt, and Detlef Nolte. In Guatemala, Diego Solis and Carlos Villagran. In Guyana, Presidents Irfaan Ali, Bharat Jagdeo, and Donald Ramotar, Prime Minister Keith Phillips, Foreign Minister Hugh Todd, Gerry Gouveia, William Walker, Brian Chinn, and Hilton Macdavid, among others. In Mexico, RADM (Ret.) Adalberto Arauz and Noe Cuervo, among many others. In Panama, Eddie Tapero and Tom Newman. In Paraguay, Ernesto Orbegoso and Juan Facetti. In Peru, Jorge Serrano Torres, Leonardo Longa, Jose Mejia, Paul Vera, Mario Vinatea, and Richard Hurtado. In Romania, Dr. Alba Popescu. In Trinidad and Tobago, Sam Chaitram.

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In Uruguay, Dr. Ignacio Bartesaghi, Daniel Piriz, Rosario Rodriguez, and Yuri Gramajo. In Venezuela, Leocenis Garcia. Across the region, I owe an immense debt of gratitude to my colleagues in the US Embassy teams and the associated military Security Cooperation offices, as well as to my colleagues in US Southern Command, US Northern Command, US Army South, US Army North, the State Department, and other US government organizations, all of whom have been incredibly helpful and generous with their time in support of my efforts with this book and individual works leading to it. This book would be far less insightful and accurate without the inputs they have made, directly and indirectly, throughout this long journey. The opinions, and the errors, in this document, of course, are strictly my own. PA, USA

R. Evan Ellis

Notes 1. “Value chain” is used loosely throughout this work to refer to the series of activities transforming products to items of ever greater value. It is deliberately chosen because it has a connotation of greater openness and a range of transformations, each resulting in the production of different products, versus the more narrow term “supply chain.” 2. Ted C. Fishman, China, Inc.: How the Rise of the Next Superpower Challenges America and the World (New York: Scribner, 2005). 3. Immanuel Wallerstein, The Capitalist World Economy (Cambridge University Press; 1979).

Contents

1 Introduction  1 2 China’s Efforts to Reorient the Global Economic Order to Its Benefit 39 3 The Development of China’s Relationship with Latin America 65 4 China’s Economic Struggle for Position in Latin America 85 5 Chinese Soft Power131 6 The Struggle for Diplomatic Recognition and Its Implications153 7 The Question of Leftist Populist Regimes179 8 Military Engagement and Its Role227 9 Impact of Covid-19 in Accelerating China’s Advance245 10 Why Does It Matter and What to Do267

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About the Author

R. Evan Ellis  is a research professor of Latin American Studies at the US Army War College Strategic Studies Institute, with a focus on the region’s relationships with China and other non-Western Hemisphere actors, as well as transnational organized crime and populism in the region.Ellis has published over 330 works, including China in Latin America: The Whats and Wherefores (2009), The Strategic Dimension of Chinese Engagement with Latin America (2013), China on the Ground in Latin America (2014), Transnational Organized Crime in Latin America and the Caribbean (2018), and the present work.Ellis previously served as the Secretary of State’s Policy Planning Staff (S/P) with responsibility for Latin America and the Caribbean (WHA), as well as International Narcotics and Law Enforcement (INL), issues.In his academic capacity, Ellis presented his work in a broad range of business and government forums in 27 countries of four continents. He has given testimony on Latin America security issues to the US Congress on various occasions, has discussed his work regarding China and other external actors in Latin America on a broad range of radio and television programs, and is cited regularly in the print media in both the United States and Latin America for his work in this area.Ellis has also been awarded the Order of Military Merit José María Córdova by the Colombian government for his scholarship on security issues in the region.

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CHAPTER 1

Introduction

Context The shift to a more adversarial relationship between the United States and the People’s Republic of China (PRC) during the Trump administration was not merely an artifact of the president and the ideological orientation of his team. It reflected increasing discomfort by reasonable, educated people at senior levels across the US political spectrum with the growing economic and military power of China, the increasing boldness and antidemocratic nature of its actions, and the adverse impacts of its expanding global engagement on international institutions, the world’s political and economic dynamics, and the global security environment. The emerging, largely bipartisan, recognition of the PRC as a strategic challenge to the United States1 reflects an emerging consensus regarding a debate among academics, policymakers, and others, ongoing since the 1990s, about whether PRC commercial and other engagement with the West would lead its government, economy, and cultural orientation to evolve in ways that would prevent its growing economic and other power from fundamentally challenging the prevailing world institutional, economic, and political order. Such hopes reflected Western hubris, reinforced by the United States’ apparent “victory” over the Soviet Union and Warsaw Pact in the Cold War, famously captured by historian Francis Fukuyama’s The End of History, which argued that, with the collapse of the Soviet Union, all © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_1

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important ideological contests had been resolved and that the world was moving toward a deepening embrace of Western style democracy and free market capitalism.2 In the end, the “Rise of China” has transformed the world order more than the world order has transformed China. China’s brutal suppression of democratic protests in the Tiananmen Square massacre of 1989 highlighted the entrenched and authoritarian character of the Communist Chinese government for those able to recognize it. The harsh PRC government response to the challenge to its authority demonstrated that the Chinese Communist Party’s ability and willingness to defend that status quo, and the characteristics of Chinese civil society were very different from the conditions that had permitted the collapse of the Soviet Union and Communist Regimes across Eastern Europe from 1989 to 1991. The relatively continuous, high rate of growth of China’s Gross Domestic Product from the country’s opening to the world under Deng Xiaoping through the present has involved a much discussed, profound transformation of China’s economy and society, but has not caused Chinese society to move toward Western concepts of pluralistic democracy and concepts of individual rights to the degree that some expected or hoped. Indeed, China’s transformation, driven by an aggressive, state-led export-oriented industrial policy, was also to a degree shaped and enabled by authoritarian cultural norms, with associated aggressive business practices that reflect distortions of Confucian and Taoist virtues.3 A key component of China’s rapid growth has been high levels of corruption and systematic intellectual property theft, reflecting engrained attitudes within Chinese culture, which does not see such practices as wrong or immoral in the same way the West does.4 Such practices have gone beyond the individual level to involve the implicit and sometimes explicit support of the Chinese state, which obliged foreign companies seeking access to the Chinese market to work with local firms, who frequently used the collaboration to appropriate the manufacturing knowledge, technology, and other intellectual property of their Western partner, ultimately offering their own version of the product, first in China and then abroad with the support of the Chinese state.5 Particularly since the beginning of the twenty-first century, Asia-focused analysts in the United States and elsewhere have followed, with concern, not only China’s growing economic power but also its military capabilities, including its development of “anti-access” strategies and supporting weapons such as long-range anti-ship munitions.6 China has increasingly

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attempted to intimidate or coopt its neighbors in the region, particularly within the maritime spaces claimed by the PRC through its “9-dash line.”7 As early as the 1990s, forward-looking thinkers, such as the Office of the Secretary of Defense for Net Assessment and its legendary leader Andrew Marshall, looked with concern at the implications of the continuation of China’s growth trajectory, including its potential military, economic, and political power as it brought its 1.4 billion people into the modern economy.8 Despite such concerns, at the turn of the millennium, the concept of a US-led “world order” dominated the academic discourse.9 US influence in political, institutional, economic, and military terms seemed insurmountable. Many of those who saw signs of danger in China’s trajectory sought to reassure themselves and others that the PRC would transform itself, self-destruct, or both.10 Their arguments drew upon real problems in China’s educational and health systems, frictions associated with internal ethnic minorities, corruption, pollution, or a myriad of other issues.11 Their arguments were attractive for the comfort they offered, with the idea that, without any serious need for the West to adjust its own strategy, coordinate, or mobilize significant resources, the PRC would conveniently cease from becoming a serious threat to the US and Western-dominated system of institutions and values. By 2005, China’s global engagement, first noted in Africa,12 and later in Latin America,13 was receiving increasing attention. Some of the early calls for concern were misdirected, rooted in those who saw in China’s governing Communist Party the resurrection of the global political and military threat posed by the Soviet Union during the Cold War. Authors and politicians in this group, in the early 2000s, contributed to a misunderstanding of the nature and magnitude of the Chinese threat by advancing easily dismissible “straw man” arguments that the PRC was seeking to establish military facilities in the Panama Canal Zone,14 or in former Soviet intelligence facilities in Cuba.15 However much the world wished away or mischaracterized the nature of the long-term challenge from China, the acceptance of the PRC into the World Trade Organization (WTO) in 2001, and the Chinese Communist Party’s official adaptation of the “go out” policy at its 10th Party Congress in 2002, accelerated the expanding position of PRC-based companies, and associated influence, on the world stage.16 While the United States took note of China’s advance in Latin America and elsewhere in the world, it initially reacted with ambivalence. During the Republican administration of George W. Bush, then Assistant Secretary of State for Western Hemisphere Affairs Roger Noriega expressed concern

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but, in a 2005 Congressional hearing on the matter, emphasized that the level of US economic and other engagement in the region was far greater than that of the PRC.17 During the subsequent administration of Democrat Barak Obama, Assistant Secretary of State Arturo Valenzuela, and his successor Roberta Jacobson, both expressed similar concerns, yet avoided categorizing that advance as a threat to the United States and the region.18 The then Secretary of State Hillary Clinton briefly cast China’s activities in the region in more threatening terms when she conflated it with Iran’s engagement in the region.19 Nonetheless, her rhetorical flourish was an exception that was not followed by significant public signs of US resistance to Chinese global engagement during the Obama administration. The ascension to power of Xi Jinping as head of the Chinese Communist Party in November 2012 and the increasingly assertive Chinese engagement with the world under his government set the stage for the subsequent turn to a more confrontational US posture toward the PRC, particularly with the election of Donald Trump as US president and the arrival of an accompanying national security team with a more conservative perspective, including his first National Security Advisor H.R. McMaster. President Xi’s more charismatic and self-confident leadership style and its contrast to the more low-key technocratic orientation of his predecessor Hu Jintao complemented the growing overseas presence of Chinese companies globally, which had begun to take off just before President Xi’s ascension.20 That take-off was captured in the book by respected US sinologist David Shambaugh, China Goes Global,21 which came out in February 2013, the year Xi assumed the presidency. During this same period, the People’s Liberation Army (PLA), which had been long quietly reforming itself and increasing its budget at often double-digit rates, became increasingly apparent as a challenge to US power in Asia and beyond.22 China began building and militarizing artificial islands in the South and East China Sea, and projecting its military forces increasingly beyond Asia, including conducting counter-piracy operations off the coast of Somalia,23 and the establishment of its first military base, in Djibouti in 2017.24 During the period, the PRC also increasingly coordinated with once rivals such as Russia, in multilateral entities such as the Shanghai Cooperation Organization, in military exercises25 and other matters, and became increasingly uncooperative in helping the United States respond

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to challenges posed by problematic international actors such as Iran26 and North Korea,27 among others. In its internal affairs, China’s actions have become increasingly authoritarian, raising concerns about China’s future impact on democratic institutions as its power and influence grows. President Xi himself violated the unspoken PRC limit on a leader to two presidential terms,28 even while eliminating his rivals within the Party such as Bo Xilai. Under his government, the PRC eliminated Hong Kong’s autonomous status and cracked down on its dissenters,29 as well as interning two million of its Uighur Moslem citizens in Xinjiang in reeducation camps.30 Xi’s government has further placed increasing restrictions on Western companies, and pressure on them not to express themselves in ways that offend sensibilities of the Chinese government.31 In short, by the time the Trump administration took office in January 2017, China’s actions under President Xi had already heavily tilted the discourse in the United States in favor of those who saw the PRC as a threat to the US strategic position globally, which needed to be contained, versus those who saw it as a partner to be embraced, working through difficulties through good faith negotiations. The Covid-19 pandemic, rather than creating opportunities for the United States and the PRC to work together in combatting a shared global threat, has heightened attention to China’s global advance and the challenges it presents. In the early phase of the crisis, the Trump administration helped to call attention to the origins of the virus in Wuhan, China, including likely ties to the Wuhan Virology lab,32 as well as evidence of PRC attempts to manipulate the World Health Organization (WHO) and otherwise obstruct investigation into its role in the origins of the pandemic.33 The document “The Longer Telegram,” written by senior members of the outgoing Trump administration, highlighted the sea change in official thinking regarding the PRC.34 The document’s name deliberately drew a parallel to George Kennan’s “long telegram” about the systemic threat posed to the United States by the Soviet Union. The Longer Telegram pulled no punches in casting the PRC as the central threat to Western institutions, values, and democracy. Some expected that the transition of the presidency from Donald Trump to Democrat Joe Biden would lead to a return to a more cooperative US attitude toward the PRC.35 The initial actions of the Biden administration, however, have continued the focus on China as a geopolitical

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competitor, even if the new administration has substantially changed the tone and style. Upon assuming office, the Biden administration published interim national security strategy guidance that emphasized the role of the PRC as a strategic competitor challenging American power.36 It appointed the relatively experienced and hawkish diplomat Kurt Campbell to be its “China Tzar.” In the first high-level meeting between US and Chinese senior officials in Anchorage, Alaska, Secretary of State Antony Blinken and National Security Advisor Jake Sullivan directly, if diplomatically, challenged China to change behaviors of concern, both domestically and abroad, and in return, were strongly chastised by the Chinese response.37 Concurrent with the transition from the Trump to the Biden administration in the United States, events in the United States and the broader world seemed to feed a narrative of the United States in decline and an ascendant China. These symbolic events included the PRC’s ability to control the spread of Covid-19 in China from a very early moment, while both the United States and Europe continued to struggle throughout 2020 and 2021 with both its health and economic effects.38 Indeed, the Chinese economy was the only major world economy that showed positive growth for 2020, expanding 2.3% for the year, while the US economy contracted 3.6%.39 Similarly, China’s projected 8.1% growth in 202140 far exceeded the corresponding expectations for both the United States and Europe. The disputed November 2020 election in the United States, including the January 6 invasion of the capital by pro-Trump protesters further contributed to the image of an orderly, growing China versus the United States in conflict and disarray,41 as did the rapid fall of the government of Afghanistan as the United States withdrew from a conflict in which it had invested trillions of dollars and American lives over two decades.42 As further symbols of its international advance, in November 2020, the PRC successfully completed the Regional Cooperative Economic Partnership (RCEP) trade agreement with its Asian neighbors, putting it at the center of a new Asia-centered trade structure, on its terms, and of which the United States was not part.43 China also finalized a major trade deal with the European Union just before the Biden Administration came into office, despite requests by incoming Biden administration officials to their European counterparts wait, although the European Union later postponed the deal.44

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In its international behavior, Chinese actions under the Biden administration continued to demonstrate it was in active competition with the United States, including theft of US defense and other secrets,45 and support to cyberhackers seeking to break into US commercial and other systems.46 In Asia, during 2021, the PRC made increasingly frequent military incursions into Taiwan’s Air Defense Identification Zone,47 as well as conducted a military exercise involving the simulated sinking of a US aircraft carrier,48 among other provocations. In short, as 2021 came to an end, there was no question that the PRC felt that the momentum of the international system was in its favor, and under President Xi Jinping, it was willing and able to assert its growing power and influence on the world stage with ever greater confidence. Reciprocally, in Washington, recognition of the threat posed by China’s advance, it the importance of resisting it, was one of the few areas in US politics where there was a level of bipartisan consensus.49

China Engages the World China’s increasing global engagement, not only in the economic arena but also in political, military, and social domains, has impacted virtually every part of the world in political, institutional, and ideational terms, as well as in the arena of commerce. An examination of China’s engagement with Asia, Africa, the states of Europe, and elsewhere suggests remarkable consistencies in China’s approach, punctuated by instructive differences, which reflect its distinct historical relationships and differences in familiarity with different region, their distinct geography, and relative distance from the PRC, as well as the unique conditions of each country.50 Factors leading to different Chinese behaviors in different countries include the particular opportunities afforded for PRC-based companies and the Chinese government in each, including the specific mixture of commodities, foodstuffs, markets, and technologies engaging with the country offers. Relevant distinctions include the partner nation’s type of government (e.g., strong democracy versus authoritarian populist), the style and strength of its institutions, and its political orientation vis-à-vis the United States and West, among others. Scholars may reasonably debate whether the differences in Chinese behavior in different regions stemming from factors such as distance and historic relationships are more significant than the similarities.51

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Nonetheless, by recognizing common patterns of Chinese behavior across regions, it is possible to use insights from the activities of its government and companies in Latin America, to anticipate or understand similar behaviors elsewhere, or vice versa. The nature of PRC global engagement, and the challenge it presents to established powers (both the United States and the European Union), is often misunderstood due to examining that engagement through a Cold War lens that is only partially applicable.52,53 The PRC is indeed engaged in a deepening struggle with the United States, in which the pursuits, power, and value systems of each systematically undermine the other. In that competition, the size of each actor and its level of engagement in the contemporary interdependent world order prevent each from pursuing its goals and well-being “separately.” Yet the nature of PRC objectives, and its approach to pursuing them in that contemporary, highly interdependent global environment, is very different from both the objectives of the Soviet Union and the less interdependent world in which it pursued them. If the struggle between the United States and the Soviet Union could be characterized as a world of relatively separate, competing “blocks,” it is more appropriate to characterize China’s activities and those of the established Western powers in the more interdependent contemporary order as a struggle between networks. Indeed, China’s use of the “Belt and Road Initiative” to represent its concept of engagement with the world,54 and more recent complementary references to the new “Digital Silk Road,”55 highlights the applicability of the “network” metaphor in characterizing the nature of the contemporary competition. To extend the metaphor, the fundamental difference between “networks” and “blocks,” in global competition is that it is generally easier to belong to multiple networks in the global order than to belong to multiple blocks. At the same time, the architecture of those global “networks” is enormously important in determining the flows of influence and benefit. Whatever the appropriate metaphor, the PRC is not the Soviet Union, and the nature of the competition in which China and the United States are engaged is very different from that characterizing the prior Cold War era. The PRC is a society and country very different from the Soviet Union, with a different political culture, at a very different moment of world history. This includes differences in the global state of technology and the structure and interdependence of the global economy. Far more than the Soviet Union during the Cold War, contemporary China’s economic well-being is inherently tied to the rest of the world through

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international trade, common financial systems, resource flows, and global institutions. In addition to interdependence, the contemporary environment alters the potential, and threat of China’s state-led, officially “Communist” governance model. Through the advance of information technology and connectivity, the PRC has both tools and opportunities to both coordinate and advance its economy and manage information flows, as well as challenges and vulnerabilities in each area, that go far beyond the tools and challenges of the Soviet Union during the Cold War. As a complement to differences in the global environment, the fundamental objectives of the PRC, rooted in its political culture and history, are very different from those of the Soviet Union, including governance and negotiating style, and attitudes toward government and interpersonal authority. In the domain of international politics, the Communist system imposed by the Soviet Union on its client states during the Cold War involved a state-led system of economic organization consistent with that of the Soviet Union itself. Yet the principal way in which the Soviet Union sought to advance its position during the Cold War was fundamentally through political control (whether by revolution or subversion) of the partner nation. This often involved some combination of elections and military struggle, followed by the establishment of an allied regime whose political structure was modeled on that of the Soviet Union. By contrast to the international political engagement model of the Soviet Union, the PRC is not attempting to impose a new political-­ ideological model on the states with which it engages. Nor does it generally seek to realize its objectives through the overt application of military power or formal alliances. Rather, the PRC is attempting to restructure the global economic order and its institutions (of which it is a part, albeit a relative latecomer) to its own benefit. This central goal, which China has pursued to varying degrees with varying success over its 3000+ year history, has profound implications for the contemporary world, and the strategic position of the United States in it. Those implications are every bit as great as the consequences of the more political-military-oriented competition between the United States and the Soviet Union during the Cold War. The contemporary PRC may not overtly challenge the United States or other states in political and military terms (so long as they do not violate China’s “red lines,” or otherwise interfere with its pursuits). Nonetheless,

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to the extent, the PRC succeeds in pursuing those objectives, in combination with its size and its style of government, inherently impacts the rest of the world in economic and political terms. It does not simply put at risk the ability of the rest of the global community to secure its own benefit from the global economic system, but PRC dominance of the global system in economic and other terms is incompatible with the equitable functioning of global institutions, as well as Western-style participatory democracy, human rights, and the rule of law. Examples of China’s increasingly worrisome abuse of its economic and other leverage in the international arena as its power and confidence have grown abound. They include the cutoff by the Chinese conglomerate COSCO of purchases of Argentine soy in 2010, in what was understood as Chinese retribution for protectionist actions by the Argentine Congress against Chinese products.56,57 PRC imprisonment of Canadian entrepreneur Michael Spavor in retribution for Canada’s arrest of Huawei executive Meng Wanzhou for extradition to the United States is another example.58 Others include its cutoff of Australian pork exports when the country dared to question the PRC’s role in the spread of Covid-19.59 Similarly, in July 2020, when Great Britain excluded Huawei from its networks over security concerns, China threatened to abandon a trade deal with Great Britain and raised the question of its substantial investment holdings in the country.60 In the security sphere, as Chinese power has grown, its posture has evolved from an asymmetric strategy to defend its territory, to an anti-­ access orientation to deny would-be challengers such as the United States access to its theater, to increasingly global engagement that supports the correspondingly global interests and operations of Chinese companies and people while preparing to wage a conflict that is worldwide in its dimensions if obliged to do so through a major power conflict or other scenarios. In that regard, the sustained commitment of the PRC to high defense spending consistently expanding more rapidly than its GDP growth is also notable.61 Not only has the PRC built forces that are increasingly comparable to, and in some cases numerically superior to US forces, but also those forces are increasingly capable technologically and include the capability to project force and conduct expeditionary operations, as well as forces that are strictly defensive in character. The growing capabilities of the PLA to project power include amphibious ships and growing number of aircraft carriers with supporting battle groups. In practice, as well as in concept, the

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PLA has increasingly conducted operations far beyond Asia.62 Examples include conducting counter-piracy operations, participation in United Nations operations, providing military support to evacuating Chinese personnel from Libya in 2011 and Yemen in 2015, and establishing China’s first formal overseas naval base, in Djibouti in 2017. During this period, the PRC has continued to expand its institutional, professional military education, training ties, and operations in all parts of the world, as explicitly recognized by the 2015 and 2019 editions of the PLA defense strategy.63 Beyond military capabilities, as China’s economy has expanded and diversified, PRC efforts to secure and capture the value added from sources of supply, and dominate strategic markets and infrastructure, have progressively pushed the other regions of the world with which it interacts toward a posture of economic subordination, although the process is still in its early stages. Specifically, China’s pursuit of its commercial objectives is moving the world toward relationships in which the PRC and its companies substantially own, control, and reap the value added from extracting its partner’s resources, dominating infrastructure and value chains, and selling back to them high value-added goods and services, reaping the majority of the benefits for themselves. China’s success is leading its partners toward what world systems theorist Immanuel Wallerstein once termed “dependent development,”64 even while promulgating a seductive discourse that working accommodating China is a “win-win” relationship,65 and using economic and other forms of coercive influence to silence those who would object. The institutions of the post–World War II order were both created and dominated by the triumphant Western powers. Its companies and financial institutions dominated the global economy, shaped its commerce, owned the majority of its key technologies and processes, and reaped the majority of its returns to capital. Such dominance made it difficult to imagine a world in which another power played a defining role in those institutions and associated influence or displaced the West in a substantial way from ownership of companies, financial institutions, technologies and infrastructure shaping to whom the corresponding benefits flowed, and where the associated decisions were made. Yet bit by bit, China’s sustained advance, fueled by enormous continuous trade deficits with the dominant Western world, is restructuring that order to China’s benefit, even while the West continued in denial, or imagined that the PRC would

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self-­destruct from its own internal contradictions before it would succeed in remaking the world that the West had become comfortable with. For Latin America and other parts of the world, the prospect of China replacing the West as chief beneficiary of the World system leaves the region once again an economically marginalized cog in an economic and political machine with the rules established by others. For the region, this may be an all-too-familiar fate. Yet seduced by the desires of individual political and economic actors in the region for the short-term benefits of China’s promised investments, loans, and trade, the question of whether the new Chinese “owners” will be less desirable than the current, (admittedly flawed) Western benefactors China is displaced is often ignored. Nor are those engaging with China asking themselves why once again, it is an outside power, rather than the region itself, that will principally benefit from the extraction of their commodities and the servicing of their markets.

Latin America as an Area of Focus to Examine Chinese Engagement Within the context of China’s global engagement, the present work on PRC activities in Latin America, examining how China, through government activities, its companies, and other instruments of the state, is pursuing that strategy in similar and different ways within one particular region. The selection of Latin America and the Caribbean is based on the analytical utility and insights that such examination affords. The region is particularly important for and connected to the United States through bonds of geography and commerce. Due to Latin America’s distance from and limited historical relationship with China, on the other hand, PRC engagement there has been more cautious and tentative than corresponding activities in Asia, Africa, Europe, and other parts of the world. Nonetheless, that engagement has been substantial and has expanded with growing PRC wealth and power and the assertive style of the government of Xi Jinping. China’s engagement in Latin America and the Caribbean is also characterized by a number of notable features. These include challenges stemming from China’s imperfect knowledge of the region, local resistance to Chinese projects in a number of countries, and PRC caution over the reaction to that engagement from the United States as its geopolitical rival.

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In understanding Chinese engagement, it is useful that Latin America has a rich variety of types of governments, from strongly institutionalized, relatively transparent democracies with sophisticated, politically independent, and well-mobilized social sectors to authoritarian and personalistic leftist populist regimes. The region similarly has a diversity of economies, from those principally based on agriculture and commodity exports, to diverse those with sophisticated manufacturing and value-added technology sectors. The region includes political and economic relationships with a range of other actors, from the United States to the European Union, Japan, South Korea, and India, among others. Analyzing Chinese engagement with the region across such a variety of contexts within one region facilitates the identification of common attributes, which persist across countries in the region despite such variation, while also suggesting how specific economic, political, and other situational differences in the same region give rise to distinct Chinese behaviors and outcomes. Finally, insofar as this work argues that China’s approach inherently moves Latin America in a structurally subordinate economic relationship with the PRC, the region is a particularly appropriate context as the region which intellectually pioneered “dependency and world systems theory,” which focuses on the developmental and political implications of such economic relationships.

The Hemisphere’s Response To date, much of the response to China’s advance in Latin America among policymakers in both the United States and the region itself has been relatively ineffective and imperfectly coordinated across the government. Within the United States, as noted previously, for years, both Democratic and Republican administrations long downplayed the challenge posed by the PRC and its companies in Latin America, because at the time, the level of Chinese trade and investment seemed insignificant compared to that of the United States. Those US administrations were hampered by a lack of intuitive arguments for keeping China out, insofar as the concept of free markets, long promoted by the United States, implied that sovereign nations of the region had the “right” to make deals with the PRC and its companies. Unfortunately, when the administration of Donald Trump finally began to push back against the PRC in a more direct fashion, the credibility of the message was undercut by the isolationist, “America First” character of the President’s individual actions, rhetoric, and style, which

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offended many in the region. Nor did the Trump approach facilitate working with like-minded partners from Asia and Europe in Latin America, to provide alternatives to the Chinese there. Within the region, government elites were often split between short-­ term goals of leveraging the Chinese offer to provide needed infrastructure, jobs, and sometimes lucrative contracts for well-connected associates, versus the risk that engagement with the PRC would ultimately hurt their own local businesses, without generating sustainable value added for their countries. Latin American and Caribbean governments often lack a disciplined ability to bargain with the Chinese for complex deals across sectors, evaluate their companies’ offerings in the framework of well-conceived national development plans, conduct transparent and technically thorough evaluations of competing proposals, or enforce compliance by the winner of the bid with the nations’ labor, environmental, and other laws. Further handicapping the ability to secure the best deals with the PRC, Latin American regional bodies often lack the capability to leverage their collective bargaining power by formulating and imposing coherent positions toward the Chinese. Some, such as the Community of Latin American and Caribbean States (CELAC), lack the institutional capability to do so. As a result, the interactions of the PRC with these forums produce statements, which reflect the agenda and offers of the PRC, more than any coherent or negotiated position of the region toward it. Others such as ALBA are merely too ideologically aligned with the Chinese to formulate a collective position distinct from their benefactors. Yet others, such as MERCOSUR are too ideologically divided among members to create such a consensus. Within individual countries, the penetration of PRC-based companies in the region often takes on dynamics that resemble an economic “civil war,” between those who dream of becoming rich by being China’s local partner and those who leverage their connections to keep China from gaining a foothold, fearing that Chinese companies’ access to significant resources and capabilities and the backing of the Chinese state will allow them to overturn the closed business arrangements of the status quo, if the Chinese get their foot in the door.66 Multinational corporations dealing with China in the region are sophisticated but suffer from their own type of myopia. As businesses, they understandably concentrate on the net present value of alternatives, involving China or others, without regard to political or other strategic considerations. At worst, such multinationals focus myopically on

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short-­term financial calculations. Western multinationals thus repeatedly sell off assets to PRC-based firms, congratulating themselves on Chinese foolishness in “over-paying” for the assets, yet fail to recognize the strategic impact of such transaction allowing the Chinese to build their position in the country, learning and gaining synergies from each other. In the process, they fail to consider how the resulting growth of the collective knowledge and leverage of China’s corporations, when coordinated with the PRC government and financial resources, gradually forces even the most sophisticated Western companies into a losing game. In a similar fashion, companies in Latin America team with Chinese entities on their own territory, with the presumption that by facilitating Chinese penetration of their own national markets, the Chinese will reciprocate by agreeing to the access or favors they want from the PRC government in China. In doing so, in effect, these firms are bargaining indirectly, and at a disadvantage with the PRC government for ill-defined, often ephemeral benefits, while ceding real ground to the PRC in their own countries, in tangible ways that those Chinese companies and the PRC government can later exploit.

Relevant Scholarship There is a large and growing body of work exists on the “rise of China” and its implications, and to a lesser extent, on the PRC’s global engagement. Even a brief summary of this work would be a lengthy book in itself. This work is an interpretation of Chinese activities and implications, for the benefit of policymakers and other practitioners, and not the adaptation of a doctoral thesis with the associated duty to establish the author’s awareness of the other literature. In the interest of getting to the point of this book, thus I respectfully ask my colleague’s forgiveness for not including detailed references to the good and important work that each has done. Nonetheless, a brief treatment of vast and multipurpose bodies of work is appropriate. The literature focusing on the character of China in general, its economic, political, and military dynamics is vast and beyond the scope of the present work. In general terms, it contributes to an understanding of PRC motives, imperatives, style, and the sustainability of its engagement as it engages with Latin America and other parts of the world. Notable works in this body include the classic Cambridge Illustrated History of China,67 Henry Kissinger’s On China,68 and Philip Pan’s Out of Mao’s Shadow: The

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Struggle for the Soul of a New China.69 The literature on China’s past, linking it to the present context, is also relevant, including works such as John Man’s The Mongol Empire: Genghis Khan, His Heirs and the Founding of Modern China.70 Kirk Denton’s China Dreams and the “Road to Revival,” analyzes Xi Jinping administration in terms of China’s reconstruction of its own past and national identity.71 The literature on the nature and impact of China’s strategic engagement with the global order is similarly vast. It includes works such as Susan Shirk’s China: Fragile Superpower,72 Will China’s Rise Be Peaceful?73 and various writings of John Mearsheimer, such as “The Rise of China Will Not Be Peaceful at All,”74 among others. The genre also includes a number of works focused on the strategic implications of China’s rise for the United States, with varying interpretations of China’s intentions from the benevolent example, to the malign. Such works include Michael Pillsbury’s The Hundred Years Marathon,75 David Denoon’s China’s Grand Strategy,76 Martin Jacques’ When China Rules the World,77 and Rush Doshi’s The Long Game: China’s Grand Strategy to Displace American Order.78 The previously noted work The Longer Telegram, written by former senior State Department policymakers from the Trump administration, explicitly focuses on the challenge by China to the system of Western democratic values and institutions, and the need to challenge it on that basis. There is also a body of work that wrestles with the implications of the rise of China from the perspective of international relations and global conflict, as exemplified by Woosang Kim and Scott Gates’ “Power Transition Theory and the Rise of China.”79 While most of these works presume a China whose power is expanding, contradictions within the Chinese economy, party, and society have more recently fueled analyses of the impacts and dangers of a China in crisis or decline. These include Hal Brands and Michael Beckley’s “China Is a Declining Power—and That’s the Problem”80 and Dan Blumenthal’s The China Nightmare: The Grand Ambitions of a Decaying State.81 While many of these works are global in scope, some focus on the impact of China’s rise in specific regions, such as Jude Woodward’s The US Versus China: Asia’s New Cold War?82 There are also an array of works looking at the military dimension of China’s rise and the strategic implications of the United States. The signature annual publication in this regard is the comprehensive, Congressionally mandated annual publication Military and Security Developments Involving the People’s Republic of China.83 There are also a range of multiauthor

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works focused on military audiences, such as The People’s Liberation Army and Contingency Planning in China.84 Other noteworthy works, more limited in scope, is Entering the Dragon’s Lair Chinese Antiaccess Strategies and Their Implications for the United States.85 China’s limited number of public defense policy publications are part of this literature, including its 2019 strategy, “China’s National Defense in the New Era.”86 A related, but newer part of the literature focuses on China’s competition with the United States to dominate technologies, with strategic implications in both the commercial and military domains. The most notable work in this area is The Great Tech Rivalry: China vs the U.S.87 In the past 20 years, a considerable body of work has been produced by scholars looking at the economic dimension of China’s global engagement. Perhaps the most notable text in English in this area is David Shambaugh’s China Goes Global,88 which looks at the imperatives and challenges associated with that engagement, as well as finding that the engagement has a significant impact on the global economy. Many, such as China’s Belt and Road: Implications for the United States, focus on the Belt and Road Initiative and its implications.89 There is also a genre of works looking at other aspects of Chinese engagement, including its soft power and other strategic dynamics. One of the most exemplary in this regard is the edited volume by Kingsley Edney, Stanley Rosen, and Ying Zhu, Soft Power with Chinese Characteristics,90 which is important for its broad examination of the nature of Chinese soft power and its comparisons of that influence across different parts of the globe. Another noteworthy compiled work in this genre is the compiled volume by Andrew Scobell and Marylena Mantas, China’s Great Leap Outward: Hard and Soft Dimensions of a Rising Power.91 Within these scholarly treatments of niche China-Latin America subtopics, Chinese scholar Yanran Xu produced a particularly good and important book-length work examining the PRC’s use of strategic partnerships as a vehicle for coordinating and promoting its economic and other relationships with Latin American partners.92 There is further an emerging, if small, set of global works reflecting the collection and analysis of data on China’s global activities. The most important is an examination by the USAidData Project of William and Mary University of 100 Chinese loan contracts93 and its related examination of Chinese overseas development projects.94 With respect to China’s engagement specifically in Latin America and the Caribbean, the growing body of scholarships includes scholars from

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the region writing in Spanish and Portuguese language texts, as well as US-based authors and others writing works in English. While there is a heavy concentration on the economic dimension of the engagement, there are increasingly analyses of the security, political, and military dimensions, as well as for outside actors such as the United States and Europe. Well-­ known US works include China and Latin America: The Whats and Wherefores,95 The Strategic Dimension of Chinese Engagement with Latin America,96 China on the Ground in Latin America,97 Kevin Gallagher’s The China Triangle,98 and Carol Wise’ Dragonomics: How Latin America Is Maximizing (or Missing Out on) China’s International Development Strategy.99 Important Spanish language works include Daniel Méndez Morán’s 136: el plan de China en América Latina,100 Enrique Dussel Peters’ Business-focused multiauthor work China en America Latina: 10 casos de estudio,101 Lorena Herrera-Vinelli’s A la sombra del dragón. Interdependencia asimétrica de China con Ecuador y Costa Rica.102 The compiled work by Enrique Dussel Peters, La Nueva Relacion Comercial de America Latina y el Caribe con China: integracion o disintegracion regional?103 is unique and important for its examination, through largely econometric and other quantitative tools, whether the economic effects of Chinese engagement have advanced the economic integration or disintegration of the region. Good book-length study of Chinese Engagement in a specific country are Fernando Villavicencio’s Ecuador, Made in China104 and El Feriado Petrolero105 for Ecuador, La transformación de China y su impacto para Colombia for Colombia,106 and for Peru, Las Relaciones entre el Peru y China107 and Cynthia Sanborn and Victor Torres’ La economia Esparza y las industrias extractivas: desafíos para el Peru.108 Important Spanish-language works on China in general, which include some analysis of its relation to Latin America, include the compiled work Politica Exterior China109 and Jorge Malena’s China: La Construcción de un “Pais Grande.”110 While the body of work on Chinese engagement in the Caribbean is more limited, one noteworthy effort is Richard Bernal’s Chinese Foreign Direct Investment in the Caribbean Potential and Prospects,111 and his earlier work, Dragon in the Caribbean.112 Chinese authors writing from the PRC have also published important works on PRC activities in the region, in English as well as Chinese. Examples include the multiauthor volume edited by China Academy of Social Sciences (CASS) scholar He Shuangrong, China-Latin America

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Relations: Review and Analysis.113 Such works generally focus strictly on technical details of the engagement, or portray the engagement in more benevolent, mutually beneficial terms, or focus on technical questions, rather than harms to the region or the United States arising from such engagement. Notable China-Latin America books by Chinese authors include China and Latin America: Paths to Overcoming the Middle-Income Trap by scholars from Fudan University, as well as Xanran Yu’s China’s Strategic Partnerships in Latin America: Case Studies of China’s Oil Diplomacy in Argentina, Brazil, Mexico, and Venezuela, 1991–2015.114 As China’s relationship with Latin America has gained increasing attention among scholars and policymakers, the question of the “newness” or historical legacy of that relationship has become a matter of focus, including works such as Peter Gordon and Juan José Morales’ “Long View: The 16th-Century Trade Route That Brought China to Mexico.”115 Gavin Menzies, in his book 1421: The Year China Discovered America, controversially argued that the Treasure Fleet of Chinese Admiral Zheng He discovered America before the Europeans.116 The body of work on Chinese activities in Latin America also includes a large number of multiauthor volumes, including Raúl Bernal-Meza and Li Xing’s China–Latin America Relations in the 21st Century,117 which look at the relationship from an international political economy perspective, Nele Noesselt’s more strategic and security-focused China’s Interactions with Latin America and the Caribbean: Conquering the US’s Strategic Backyard?118 The previously mentioned work by Thierry Kellner and Sophie Wintgens, China-Latin America and the Caribbean: Assessment and Outlook,119 David B.H. Denoon’s China, the United States, and the Future of Latin America: U.S.-China Relations, Volume III,120 Alex Fernandez Jilberto and Barbara Hogenboom’s Latin America Facing China,121 and Shoujun Cui and Manuel Pérez García’s China and Latin America in Transition: Policy Dynamics, Economic Commitments, and Social Impacts,122 and China Engages Latin America: Tracing the Trajectory,123 among others. The Kellner and Wintgens volume is important in that it includes European, as well as US, and Latin American perspectives, as well as for the breadth of countries and topics covered. Nonetheless, most of the compiled volumes contain a variety of perspectives and arguments, although woven together with greater or lesser coherence in the obligatory introductory or concluding chapter by the volume’s editors.

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There is a notable difference in perspective between sinologists such as David Shambaugh who examine that engagement with other parts of the world looking outward from the PRC, versus those who examine it from the perspective of the regions where it is occurring, or from an extra-­ regional perspective, most frequently, that of the United States. In general, however, the literature tends to be primarily descriptive, examining what the PRC and its companies are doing, or analytical, focused on China’s economic impact, both positive and negative, and the impact on the United States, or the US reaction. Most works, particularly multiauthor compilations, are divided into country-specific chapters, with the result that cross-country analysis of themes is limited. Works based on the collection and analysis of detailed data are also limited. One of the exceptions to such shortcomings is a small but important group of works on the technical aspects of Chinese economic engagement with the region, including the size and patterns of its investment, or its environmental and other impacts. Relevant work includes Enrique Dussel Peters’ 2021 Monitor de la OFDI china en América Latina y el Caribe 2021,124 “Globalización con características chinas y su reciente relación con América Latina y el Caribe,”125 and the 2020 Monitor de la infraestructura china en América Latina y el Caribe 2020.126 With respect to Chinese loans, the Boston University and Interamerican Dialogue China Loan Database are also noteworthy.127 There are also a number of reports and articles that look at Chinese activities in individual economic sectors, such as the Institute of the Americas’ “China Stakes Its Claim in Latin American Energy.”128 Of the economically focused works, there is only one (short) book-­ length volume that explicitly analyzes the applicability of dependency theory in understanding China’s engagement in the region, Barbara Stallings’ Dependency in the Twenty-First Century?: The Political Economy of China-­ Latin America Relations,129 although the previously mentioned edited volume by Bernal-Meza and Xing provides valuable insights into understanding Chinese engagement from a neo-dependency perspective.130 Although most of the literature on Chinese engagement in Latin America is written from a social sciences or econometric perspective, there is also an emerging group of works, which looks at China’s impact on the environment and social issues. The most notable is the publication series by the eJournal Dialogo Chino.131 With respect to the social dimension of Chinese activities in the mining sector, an important work was Cintia

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Quiliconi and Pablo Rodríguez Vasco’s Chinese Mining and Indigenous Resistance in Ecuador.132 The question of Chinese technology infrastructure in Latin America and elsewhere has become an important, if niche, issue in recent years. Important relevant works include a study on “China’s Smart City Development” by the US-China Economic and Security Review Commission,133 and Jonathan Hillman and Maesea McCalpin’s “Watching Huawei’s ‘Safe Cities.’”134 There is an even more limited number of analyses regarding PRC military engagement with Latin America and the Caribbean. These include works by the present author,135 as well as a short, somewhat older overview work by Gabriel Marcella.136 There is also a smaller, but important literature regarding the diplomatic struggle between the PRC and Taiwan in Latin America and the Caribbean. These include works by the present author,137 as well as a limited number of collected volumes, such as He Li and Antonio Hsiang’s Taiwan’s Relations with Latin America.138 It also includes shorter works such as Rachael Will’s “China’s Stadium Diplomacy.”139 Another important topic is the question of the political and other influence China has gained in Latin America through its principally economic activities, even if not explicitly pursuing political change. The most important work in this area is arguably the edited volume Soft Power with Chinese Characteristics.140 Another important work in this regard was the National Endowment for Democracy’s report on China’s “Sharp Power.”141 With respect to overt Chinese messaging in Latin America, one of the best studies is María Micolta’s, “China’s Communication with a Latin America Audience.”142 An important reference for China’s people-to-people diplomacy at the political level is the US-China Security and Economic Review Commission’s “China’s Overseas United Front Work: Background and Implications for the United States.”143 Despite the vast and growing nature of the literature on China and its engagement with Latin America and the Caribbean, there is no single author, book-length analysis that examines how Chinese activities in multiple commercial sectors, complemented by political, institutional, security, and diplomatic activities, complement each other to advance the PRC’s position in specific ways in the region. This book seeks to fill that gap. While addressing an important theoretical weakness in the literature, this book is also oriented toward practitioners. Specifically, it is intended

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to be a reference and a thought-piece for Latin America– and Caribbean-­ focused policymakers in the United States, Europe, and elsewhere, as well as those examining China’s engagement with other parts of the world. This work aims to further the understanding of the nature of PRC activities in Latin America and the Caribbean and generate insights into how to most effectively respond to those challenges, both in the region and more broadly. The present work is not primarily a book about academic theory, applying international relations, international political economy, or other conceptual frameworks per se to understand Chinese engagement in Latin America. Nor does it seek to use the examination of that engagement to validate or critique one school of theory over another. Rather, its purpose is to provide a coherent understanding of how China’s pursuit of its largely economic global objectives, through the actions of both its government and imperfectly coordinated companies and other entities, is transforming the political dynamics and economic structure of the region, with profound implications for the United States and the rest of the world. In pursuit of that objective, this work examines the PRC government-­ supported advance of its companies and their quest to capture the region’s value-added, in sectors from extractive industries and agriculture to strategic markets. It gives particular attention to PRC initiatives seeking to dominate transportation, power, telecommunications, e-commerce, and other types of connectivity in the region as a key instrument in furthering that objective. As a complement, this work further examines how PRC objectives are advanced by the nurturing and leveraging Chinese soft power, through the interaction between Chinese engagement and leftist populist governments, through the battle for diplomatic recognition of Taiwan, through security engagement, and through the effects of the Covid-19 pandemic, among others.

Organization of This Work This book is written primarily for a US audience. As such, the structure and recommendations are oriented toward an audience of US government and business decision makers. Chapter 2 sets out the theoretical argument of this work regarding PRC engagement on a global scale. It examines the PRC’s strategic goals and how it has pursued them globally, shaped by the particular moment in time and world system in which China finds itself. It also examines how

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China’s approach in particular states and regions is shaped by the characteristics, opportunities, and challenges of the places and partners with which China is engaging. This chapter focuses in particular on PRC use of the tools of state, in conjunction with its state-owned enterprises (SOEs) and other entities as national champions, to seek secure access to supply and strategic markets, while capturing the value added of both. It looks at how, at the center of this strategy, the PRC is building significant positions in the region’s transportation, electricity, telecommunications, e-­commerce, and other forms of connectivity, in order to use it to facilitate its access to sources of supply and markets and build its positions in the corresponding sectors. This chapter also advances the argument for how PRC economic pursuits are complemented by its nurturing and application of “soft power”; how the interactions between Chinese engagement with leftist populist governments support these goals; how they are advanced through the PRC battle for diplomatic recognition of Taiwan; and how PRC security engagement and its exploitation of opportunities arising from the Covid-19 pandemic advance these objectives. Chapter 3 sets up the Latin America–specific portion of the book’s analysis by providing the historical background of China’s development of political, economic, and other relationships with the region. Specifically, it examines the evolution of Chinese engagement with Latin America from the pre-twenty-first-century period of limited contact and struggle for diplomatic recognition, to the growth of trade relations and associated relationships and experience from the acceptance of the PRC into the World Trade Organization through the 2007–2008 global financial crisis, to the acceleration of the presence of Chinese companies “on the ground” in the region after 2010, with China’s corresponding expansion of interest in the region’s conditions, and opportunities for both conflict and learning. Chapter 4 examines the economic component of the argument advanced in Chap. 2, in the specific context of Chinese activities in Latin America and the Caribbean. Specifically, it looks at how, in the region, the PRC has supported and guided the initiatives of its companies through the activities of the government to expand China’s presence in key sectors in the region, while also capturing value added in both resource sectors and strategic markets. It gives particular attention to China’s advance in transport, electricity, telecommunications, and e-commerce infrastructure sectors in the region, and how building and leveraging this connectivity there supports China’s bid to secure key sources of supply and markets and capture their value added.

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Chapter 5 examines the nature of Chinese “soft power” in the Latin American and Caribbean context as a central yet broadly misunderstood vehicle, facilitating the advance of the PRC and its companies in the region. It looks at how Chinese soft power in the region is principally rooted in its partner’s expectation of benefit, by contrast to the relatively greater role of the identification by Latin Americans with US values, culture, and teachings as the principal pillar of US soft power in the region. As a complement to the role for China of the “expectation of benefit” in advancing its objectives in the region, the chapter examines the role of Chinese “people to people” diplomacy, including the cultural promotion organization Hanban and China’s “Confucius Institutes.” It also looks at the activities of the International Liaison Department of the Chinese Communist Party and other vehicles. Chapter 6 focuses on the PRC struggle with Taiwan in the region over diplomatic recognition and its indirect role in advancing Chinese strategic objectives there. The chapter examines individual countries in the region which have recognized the PRC in the past two decades to show how diplomatic recognition not only advances the isolation of Taiwan, but how, as an important secondary benefit, such changes in recognition also supports PRC advances across a range of important commercial areas, opening up the partner economy through the signing of memorandums of understanding (MOUs) and initiation of trade talks, Chinese engagement with politically connected business elites who travel to the PRC as part of the recognizing delegation, and the redirection of Asia-oriented young professionals from studying in Taiwan to studying in the PRC on Hanban scholarships. Chapter 7 examines the interaction between leftist populist regimes in Latin America and the PRC in advancing Chinese interests in those states, while contributing to the erosion of democracy and consolidation of anti­US authoritarian governments in an increasing number of states in the region. It focuses in particular on the cases of Venezuela, Ecuador, Bolivia, and Argentina. It uses them to illustrate the cycle in which China, in pursuit of its own economic and strategic objectives, contributes to the survival of such regimes and, in the process, facilitates a growing number of regimes across the region that are authoritarian and relatively hostile to the United States. The analysis acknowledges that leftist populist elites come to power through factors unrelated to the PRC, such as frustration with endemic corruption and poor performance of prior democratic governments. Nonetheless, it shows that the subsequent ability of the populist

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regimes to turn to PRC for resources, including Chinese purchases of the regime’s commodities, as well as loans and some investments, helps to keep leftist populist regimes solvent as they consolidate power; undermine democratic institutions; change constitutional frameworks; and move against the private sector, independent media, and other sources of opposition. Reciprocally, the chapter shows how those consolidated populist regimes benefit China through agreeing to deals on terms favorable to the PRC and its companies and go further than their non-populist counterparts in engaging with the PRC in strategically important domains such as electronic surveillance and military cooperation. Finally, the chapter looks at how PRC support, including providing the regimes surveillance and control architectures, helps perpetuate those regimes in power, thus “exporting” authoritarianism. Chapter 8 examines China’s growing security engagement in Latin America from the perspective of how it supports and leverages opportunities provided by the country’s economically focused engagement. The chapter also looks at how that commercial presence, complemented by the range of Chinese military activities there, helps expand options for the PLA in building increasingly global capabilities and options for a major conflict for which it is its responsibility to plan. As part of this analysis, the chapter details Chinese arms sales, training and professional military education activities, institutional visits and other exchanges, and deployments by the PLA in the region, as well as the evolution of these activities in individual Latin American and Caribbean countries. Chapter 9 examines the impact of Covid-19 on China’s short-term influence, and long-term advance in the hemisphere. It addresses PRC “Covid diplomacy,” including donation and sale of masks and other personal protective material, tests, ventilators, and similar equipment to the region. It also looks at sales and donations of Chinese vaccines to the region. The chapter looks at the role of such engagement in winning goodwill for the PRC and opening doors for its companies, particularly in medical and other sectors linked to its “Health silk road,” as well as advancing the participation of Huawei in 5G telecommunications architectures. The chapter further examines how the pandemic bolsters prospects for China’s advance in the region in multiple ways. These include how the pandemic has increased the importance of Chinese demand for the region’s commodity exports, as well as how the economic and fiscal difficulties caused by Covid-19 there open doors for China-financed projects and investments, as well as future acquisitions by Chinese firms of

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commercial assets there. It ends with a reflection of how the likely post-­ Covid expansion of China’s presence in the region will be accompanied by heightened risks due to the increased levels of economic need, crime, and social mobilization there. Chapter 10 examines the implications of China’s growing presence and leverage in Latin America for both the United States and the region, particularly in the context of the PRC focus on capturing value added in key sectors, dominating infrastructure, advancing the diplomatic recognition of Taiwan, and working through populist regimes, technology architectures, and military sales, among others. It then sets forth recommendations oriented toward US policymakers, regarding how the United States should most effectively respond to the PRC advance in the region. Those recommendations include the importance of using economic and other sources of US leverage to advocate for transparency in the region’s interactions with the PRC.  It also advocates working with the region to strengthen its institutions to obtain a better “deal” from China, including collaborating with like-minded partners outside the region, to provide economically viable non-Chinese solutions in select areas, and in general, to advance a multilateral, rules-based order in which engagement with the PRC occurs in a less threatening and damaging fashion, through a level playing field, under transparent conditions with capable partner institutions, and in the framework of rule of law.

Notes 1. See, for example, Benjy Sarlin and Sahil Kapur, “Why China may be the last bipartisan issue left in Washington,” NBC News, March 21, 2021, https://www.nbcnews.com/politics/congress/why-­c hina-­m ay-­b e­last-­bipartisan-­issue-­left-­washington-­n1261407. 2. Francis Fukyama, The End of History and the Last Man (New York: The Free Press, 1992). 3. James K.  Sebenius and Cheng Qian, “Cultural Notes on Chinese Negotiating Behavior,” Working Paper 09-076, Harvard Business School, December 24, 2008, https://www.hbs.edu/ris/Publication%20 Files/09-­076.pdf. 4. See, for example, Dan Blumenthal and Linda Zhang, “China Is Stealing Our Technology and Intellectual Property. Congress Must Stop It,” National Review, June 2, 2021, https://www.nationalreview.com/2021/06/china-­is-­stealing-­our-­technology-­and-­intellectual-­ property-­congress-­must-­stop-­it//.

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5. Daniel Shane, “How China gets what it wants from American companies,” CNN, April 5, 2018, https://money.cnn.com/2018/04/05/ news/economy/china-­foreign-­companies-­restrictions/index.html. 6. Roger Cliff, Mark Burles, Michael S.  Chase, Derek Eaton, and Kevin L. Pollpeter, Entering the Dragon’s Lair Chinese Antiaccess Strategies and Their Implications for the United States (Santa Monica, CA: Rand Corporation, 2007), https://www.rand.org/pubs/monographs/ MG524.html. 7. Marina Tsirbas, “What Does the Nine-Dash Line Actually Mean?” The Diplomat, June 02, 2016, https://thediplomat.com/2016/06/ what-­does-­the-­nine-­dash-­line-­actually-­mean/. 8. Andrew Krepinevich, “Measures of Power on the Lasting Value of Net Assessment,” Foreign Affairs, April 19, 2019, https://www.foreignaffairs.com/articles/china/2019-­04-­19/measures-­power. 9. See the discussion in Henry Kissinger, World Order (New York: Penguin Press, 2014). 10. Peter Mattis, “Are We Ready If China Suddenly Collapsed?” The National Interest, August 2, 2018, https://nationalinterest.org/blog/buzz/ are-­we-­ready-­if-­china-­suddenly-­collapsed-­27652. 11. Franklin Lavin, “Four Issues Facing China,” The Heritage Foundation, April 1, 2013, https://www.heritage.org/asia/report/four-­issues­facing-­china. 12. “China’s Influence In Africa,” Hearing Before the Subcommittee On Africa, Global Human, Rights and International Operations of The Committee on International Relations, House of Representatives, One Hundred Ninth Congress, First Session, Serial No. 109–74, JULY 28, 2005, https://chrissmith.house.gov/uploadedfiles/2005.07.28_chinas_influence_in_africa.pdf. 13. “Challenge or Opportunity China’s Role in Latin America,” United States Senate Committee on Foreign Relations, September 20, 2005, https://www.foreign.senate.gov/hearings/challenge-­or-­opportunity­chinas-­role-­in-­latin-­america. 14. Larry Rohter, “The World; Asia Moves In on the Big Ditch,” The New  York Times, December 19, 1999, https://www.nytimes. com/1999/12/19/weekinreview/the-­world-­asia-­moves-­in-­on-­the-­big-­ ditch.html. 15. Toby Westerman, “Someone is Listening,” International News Analysis Today, May 31, 2006, https://www.traditioninaction.org/HotTopics/ i45htWesterman_CubaHearingBase.html. 16. For a more detailed discussion, see R. Evan Ellis, China on the Ground in Latin America: Challenges for the Chinese and Impacts on the Region, New York: Palgrave Macmillan, 2014.

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17. Roger F.  Noriega, “China’s Influence in the Western Hemisphere,” Statement Before the House Subcommittee on the Western Hemisphere, Washington, DC, April 6, 2005, https://2001-­2009.state.gov/p/wha/ rls/rm/2005/q2/44375.htm. 18. See, for example, Zhang Ting, “China ‘not a threat’ in L.  America,” China Daily, August 19, 2010, http://www.chinadaily.com.cn/ china/2010-­08/19/content_11173376.htm. See also “China’s Latin America presence not a threat: US official,” Global Times, November 13, 2013, https://www.globaltimes.cn/content/824632.shtml. 19. Charley Keys, “Clinton warns of Iranian, Chinese gains in Latin America,” CNN, May 1, 2009, http://edition.cnn.com/2009/POLITICS/ 05/01/clinton.latin.america/. 20. See Ellis, 2014. 21. David Shambaugh, China Goes Global: The Partial Power (Oxford, Oxford University Press, 2013). 22. “Military and Security Developments Involving the People’s Republic of China, 2020,” Office of the Secretary of Defense, November 2020, https://media.defense.gov/2020/Sep/01/2002488689/-­1/-­1/1/ 2020-­DOD-­CHINA-­MILITARY-­POWER-­REPORT-­FINAL.PDF. 23. Zhou Bo, “Counter-piracy in the Gulf of Aden: Implications for PLA Navy,” China-US Focus, December 30, 2013, https://www.chinausfocus.com/peace-­s ecurity/counter-­p iracy-­i n-­t he-­g ulf-­o f-­a den­implications-­for-­pla-­navy. 24. Arwa Damon and Brent Swails, “China and the United States face off in Djibouti as the world powers fight for influence in Africa,” CNN, May 27, 2019, https://www.cnn.com/2019/05/26/africa/china-­belt-­ road-­initiative-­djibouti-­intl/index.html. 25. Kyle Mizokami, “Russia and China Cozy Up in Joint Military Exercises,” Popular Mechanics, August 18, 2021, https://www.yahoo.com/entertainment/russia-­china-­cozy-­joint-­military-­184300131.html. 26. Laura Zhou and Amber Wang, “As US turns inward, China’s Xi Jinping pledges support to Iran and Iraq,” South China Morning Post, August 19, 2021, https://www.scmp.com/news/china/diplomacy/article/3145476/ us-­turns-­inward-­china-­looks-­expand-­its-­role-­middle-­east. 27. Eleanor Albert, “The China–North Korea Relationship,” Council on Foreign Relations, June 25, 2019, https://www.cfr.org/backgrounder/ china-­north-­korea-­relationship. 28. James Doubek, “China Removes Presidential Term Limits, Enabling Xi Jinping To Rule Indefinitely,” NPR, March 11, 2018, https://www.npr. org/sections/thetwo-­way/2018/03/11/592694991/china-­removes-­ presidential-­term-­limits-­enabling-­xi-­jinping-­to-­rule-­indefinitely.

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29. “China’s Crackdown on Hong Kong,” The New  York Times, June 23, 2021, https://www.nytimes.com/2021/06/23/briefing/china-­hong-­ kong-­apple-­daily-­closure.html. 30. Ana Schecter, “New details of torture, cover-ups in China’s internment camps revealed in Amnesty International report,” NBC News, June 10, 2021, https://www.nbcnews.com/news/world/new-­details-­torture-­ cover-­ups-­china-­s-­internment-­camps-­revealed-­n1270014. 31. “China Is Now a Minefield for Western Companies,” The New  York Times, October 19, 2019, https://www.nytimes.com/2019/10/09/ business/dealbook/china-­companies-­nba.html. 32. Olivia Reingold, “Pompeo insists Covid-19 leaked from a Chinese lab,” Politico, June 13, 2021, https://www.politico.com/news/2021/06/13/ pompeo-­covid-­chinese-­lab-­493986. 33. Kitty Donaldson, “Pompeo Tells U.K. MPs China ‘Bought’ WHO Chief Tedros,” Bloomberg, July 22, 2021, https://www.bloomberg.com/ news/articles/2020-­0 7-­2 2/pompeo-­t ells-­u -­k -­m ps-­c hina-­b ought­who-­chief-­tedros. 34. “The Longer Telegram: Toward a new American China strategy,” The Atlantic Council, Accessed August 21, 2021, https://www.atlanticcouncil.org/content-­s eries/atlantic-­c ouncil-­s trategy-­p aper-­s eries/ the-­longer-­telegram/. 35. Joe Macdonald, “China hopes for change if Biden wins, but little likely,” AP News, October 23, 2020, https://apnews.com/article/ election-­2020-­race-­and-­ethnicity-­joe-­biden-­technology-­virus-­outbreak-­ 9e95f2a7a2fa47274130e93d9c05a425. 36. “National Security Strategy of the United States of America,” The White House, December 2017, http://nssarchive.us/wp-­content/ uploads/2020/04/2017.pdf. 37. Joana Tan, “Here are the highlights from the heated exchange between the U.S. and China in Alaska,” CNBC, March 19, 2021, https://www. cnbc.com/2021/03/19/here-­are-­the-­highlights-­from-­the-­heated-­us-­ china-­exchange-­in-­alaska.html. 38. Yuliya Talmazan and Eric Baculinao, “As Covid-19 runs riot across the world, China controls the pandemic,” NBC News, November 7, 2020, https://www.nbcnews.com/news/world/covid-­19-­r uns-­riot-­across­world-­china-­controls-­pandemic-­n1246587. 39. Jonathan Cheng “China Is the Only Major Economy to Report Economic Growth for 2020,” The Wall Street Journal, January 18, 2021, https:// www.wsj.com/articles/china-­i s-­t he-­o nly-­m ajor-­e conomy-­t o-­r eport-­ economic-­growth-­for-­2020-­11610936187. 40. Zhou Huanxin, “IMF projects China’s economy to grow 8.1% in 2021,” China Daily, January 27, 2021, https://govt.chinadaily.com.

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cn/s/202101/27/WS6010e126498eaba5051c18f2/imf-­p rojects-­ chinas-­economy-­to-­grow-­8-­1-­in-­2021.html. 41. Jude Blanchette, “Beijing’s visions of American decline,” Politico, March 11, 2021, https://www.politico.com/newsletters/politico-­china-­ watcher/2021/03/11/beijings-­visions-­of-­american-­decline-­492064. 42. Francis Martel, “China celebrates complete humiliation of US in Afghanistan,” Breitbart, August 16, 2021, https://www.breitbart.com/ asia/2021/08/16/china-­c elebrates-­u s-­c omplete-­h umiliation­afghanistan/. 43. “China-Led Trade Pact Is Signed, in Challenge to U.S.,” The New York Times, November 15, 2021, https://www.nytimes.com/2020/11/15/ business/china-­trade-­rcep.html. 44. Henry Ridgwell, “EU Suspends China Trade Deal as Tensions Grow Over Xinjiang, Hong Kong,” Voice of America, May 10, 2021, https:// w w w. v o a n e w s . c o m / e a s t -­a s i a -­p a c i f i c / v o a -­n e w s -­c h i n a / eu-­suspends-­china-­trade-­deal-­tensions-­grow-­over-­xinjiang-­hong-­kong. 45. Stavros Atlamazoglou, “How China Is Using Espionage to Dethrone the U.S.,” The National Interest, September 7, 2021, https://nationalinterest.org/blog/reboot/how-­china-­using-­espionage-­dethrone-­us-­193151. 46. Robert Macmillan and Dustin Volz, “Hackers Backed by China Seen Exploiting Security Flaw in Internet Software,” The Wall Street Journal, December 15, 2021, https://www.msn.com/en-­us/news/world/ hackers-­b acked-­b y-­c hina-­s een-­e xploiting-­s ecurity-­f law-­i n-­i nternet-­ software/ar-­AARQ6T2?ocid=msedgdhp&pc=U531. 47. Joseph Bosco, “Xi Jinping steps up the pressure on Biden  – will Kim Jong Un join the fray?,” The Hill, February 2, 2021, https://thehill. com/opinion/international/536819-­xi-­jinping-­steps-­up-­the-­pressure-­ on-­biden-­will-­kim-­jong-­un-­join-­the-­fray. 48. Kathrin Hille and Demetri Sevastopulo, “Beijing lays down a marker in South China Sea,” Financial Times, February 2, 2021, https://www.ft. com/content/858e24a9-­1370-­4b1e-­853f-­845eaf7d25c6. 49. Jimmy Quinn, “The Bipartisan Consensus on China Isn’t Enough,” National Review, July 5, 2021, https://www.msn.com/en-­us/news/ p o l i t i c s / t h e -­b i p a r t i s a n -­c o n s e n s u s -­o n -­c h i n a -­i s n -­t -­e n o u g h / ar-­AALMQ91. 50. For an interesting comparison of Chinese engagement in Latin America versus Europe, for example, see: R. Evan Ellis, “Chinese engagement in Latin America and Europe: Comparisons and Interdependencies,” Center for Strategic Studies of the Peruvian Army, July 6, 2021, https://ceeep. mil.pe/2021/07/06/el-­c ompromiso-­c hino-­e n-­a merica-­l atina-­y -­ europa-­comparaciones-­e-­interdependencias/?lang=en.

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51. An analysis of similarities and differences in China’s engagement with different regions is fertile ground for scholars, although doing so is beyond the scope of the present work. 52. Jude Woodward, The US versus China: Asia’s New Cold War? (Manchester, UK: Manchester University Press, 2017). 53. See, for example, Lee. 54. Jacob Lew, Gary Roughead, Jennifer Hillman, and David Sacks, “China’s Belt and Road: Implications for the United States,” Council on Foreign Relations, March 23, 2021, https://www.cfr.org/belt-­and-­road­initiative. 55. “Assessing China’s Digital Silk Road Initiative,” Council on Foreign Relations, Accessed August 21, 2021, https://www.cfr.org/china-­digital­silk-­road/. 56. Raul Bernal-Meza and Juan Manuel Zanabria, “A Goat’s Cycle: The Relations Between Argentina and the People’s Republic of China During the Kirchner and Macri Administrations (2013–2018),” in China–Latin America Relations in the 21st Century: The Dual Complexities of Opportunities and Challenges, Raúl Bernal-Meza and Li Xing, eds. (London: Palgrave Macmillan, 2020), pp. 140–182. 57. See “China resumes purchases of Argentine soybeans banned since April,” Mercopress, October 12, 2010, https://en.mercopress. com/2010/10/12/china-­r esumes-­p urchases-­o f-­a rgentine-­s oy­beans-­banned-­since-­april. 58. “Huawei and China’s Canadian Hostages,” The Wall Street Journal, August 11, 2021, https://www.wsj.com/articles/huawei-­and-­china­canadian-­hostages-­michael-­spavor-­11628719133. 59. Stephen Dziedzic, “Chinese official declares Beijing has targeted Australian goods as economic punishment,” NBC News, July 7, 2021, https://www.abc.net.au/news/2021-­0 7-­0 7/australia-­c hina-­t rade-­ tensions-­official-­economic-­punishment/100273964. 60. Sascha O’Sullivan, “BAD RECEPTION China threatens to make British companies pay for Huawei ban,” The Sun, July 15, 2020, https://www.thesun.co.uk/news/12127188/china-­threatens-­uk-­companies-­huawei/. 61. “Military and Security Developments Involving the People’s Republic of China, 2020,” 2020. 62. “Military and Security Developments Involving the People’s Republic of China, 2020,” 2020. 63. “Full Text: China’s National Defense in the New Era,” State Council, People’s Republic of China, July 24, 2019, http://english.www.gov.cn/ar chive/whitepaper/201907/24/content_ WS5d3941ddc6d08408f502283d.html. 64. Wallerstein, 1979.

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65. John Ross, “Theoretical bases of China’s ‘win-win’ foreign policy concept” Learning From China, Accessed August 24, 2021, https://www. lear ningfr omchina.net/theor etical-­b ases-­o f-­c hinas-­w in-­w in­foreign-­policy-­concept/. 66. See, for example, R.  Evan Ellis, “Chinese Advances and Setbacks in Colombia,” Indrastra Global, May 31, 2017, http://www.indrastra. com/2017/05/ThinkTank-­C hinese-­A dvances-­a nd-­S etbacks-­i n-­ Colombia-­003-­05-­2017-­0064.html. 67. Patricia Buckley Ebrey, Cambridge Illustrated History of China, 2nd edition (Cambridge; New York: Cambridge University Press, 2010). 68. Henry Kissinger, On China (London: Penguin Books, 2012). 69. Philip P.  Pan, Out of Mao’s Shadow: The Struggle for the Soul of a New China (New York: Simon & Schuster, 2008). 70. John Man, The Mongol Empire: Genghis Khan, his heirs and the founding of modern China (London: Transworld Digital, 2014). 71. Kirk A.  Denton, “China Dreams and the ‘Road to Revival,’” Origins, Volume 8, Issue 3, December 2014, https://origins.osu.edu/article/ china-­dreams-­and-­road-­revival. 72. Susan L.  Shirk, China: Fragile Superpower (Oxford: Oxford University Press, 2007). 73. Will China’s Rise Be Peaceful?: The Rise of a Great Power in Theory, History, Politics, and the Future (New York: Oxford University Press, 2018). 74. John Mearsheimer, “The rise of China will not be peaceful at all,” The Australian, 2010, https://mearsheimer.uchicago.edu/pdfs/P0014.pdf Conference Papers. 75. Michael Pillsbury, The Hundred-Year Marathon: China’s Secret Strategy to Replace America as the Global Superpower (New York: Henry Holt & Company, 2015). 76. David Dinoon, China’s Grand Strategy (New York: NYU Press, 2021). 77. Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a New Global Order, 2nd Ed. (New York: Penguin Books, 2012). 78. Rush Doshi, The Long Game: China’s Grand Strategy to Displace American Order (Oxford: Oxford University Press, 2021). 79. Woosang Kim and Scott Gates, “Power transition theory and the rise of China,” International Area Studies Review, 18 (2015), pp.  219–226. https://doi.org/10.1177/2233865915598545. 80. Hal Brands and Michael Beckley, “China Is a Declining Power—and That’s the Problem,” Foreign Affairs, September 24, 2021, https://foreignpolicy.com/2021/09/24/china-­great-­power-­united-­states/.

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81. Dan Blumenthal, The China Nightmare: The Grand Ambitions of a Decaying State (Washington, DC: AEI Press, 2020). 82. Jude Woodward, The US versus China: Asia’s New Cold War? (Manchester, UK: Manchester University Press, 2017). 83. “Military and Security Developments Involving the People’s Republic of China, 2020,” Office of the Secretary of Defense, November 2020, https://media.defense.gov/2020/Sep/01/2002488689/-­1/-­1/1/ 2020-­DOD-­CHINA-­MILITARY-­POWER-­REPORT-FINAL.PDF. 84. The People’s Liberation Army and Contingency Planning in China, Ed. Andrew Scobell, Arthur S. Ding, Phillip C. Saunders, and Scott W. Harold (Washington, D.C.: National Defense University Press, 2015). 85. Roger Cliff, Mark Burles, Michael S.  Chase, Derek Eaton, and Kevin L. Pollpeter, Entering the Dragon’s Lair Chinese Antiaccess Strategies and Their Implications for the United States (Santa Monica, CA: Rand Corporation, 2007), https://www.rand.org/pubs/monographs/ MG524.html. 86. “Full Text: China’s National Defense in the New Era,” State Council, People’s Republic of China, July 24, 2019, http://english.www.gov.cn/ar chive/whitepaper/201907/24/content_ WS5d3941ddc6d08408f502283d.html. See also “China’s Military Strategy (full text),” State Council, People’s Republic of China, Official Website, May 27, 2015, http://english.www.gov.cn/archive/white_. paper/2015/05/27/content_281475115610833.htm. 87. Graham Allison, Kevin Klyman, Karina Barbesino, and Hugo Ye, The Great Tech Rivalry: China vs the U.S., Harvard University, December 2021, https://www.belfercenter.org/publication/great-­rivalry-­china-­ vs-­us-­21st-­century. 88. Shambaugh, 2013. 89. Jacob Lew, Gary Roughead, Jennifer Hillman, and David Sacks, “China’s Belt and Road: Implications for the United States,” Council on Foreign Relations, March 23, 2021, https://www.cfr.org/ belt-­and-­road-­initiative. 90. Soft Power With Chinese Characteristics: China’s Campaign for Hearts and Minds, Edited by Kingsley Edney, Stanley Rosen and Ying Zhu (New York: Routledge, 2020). 91. China’s Great Leap Outward: Hard and Soft Dimensions of a Rising Power, Andrew Scobell and Marylena Mantas, eds. (New York: Academy of Political Science, 2014). 92. Yanran Xu, China’s Strategic Partnerships in Latin America: Case Studies of China’s Oil Diplomacy in Argentina, Brazil, Mexico, and Venezuela, 1991–2015 (Lanham, Maryland: Lexington Books, 2018).

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93. A. Gelpern, S. Horn, S. Morris, B. Parks, and C. Trebesch, “How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments. Peterson Institute for International Economics,” Kiel Institute for the World Economy, Center for Global Development, and AidData at William & Mary, March 31, 2021, https://www.aiddata.org/publications/ how-­china-­lends. 94. Alexander Wooley “AidData’s new dataset of Chinese development projects worth $843B reveals major increase in ‘hidden debt’” AidData, September 29, 2021, https://www.wm.edu/news/stories/2021/ aiddatas-­n ew-­d ataset-­o f-­c hinese-­d evelopment-­p rojects-­w orth-­8 43b-­ reveals-­major-­increase-­in-­hidden-­debt.php. 95. R.  Evan Ellis, China and Latin America: The Whats and Wherefores (Boulder, CO: Lynne Rienner Publishers, 2009). 96. R. Evan Ellis, The Strategic Dimension of China’s Engagement with Latin America (Washington DC: Center for Hemispheric Defense Studies, 2013), http://chds.dodlive.mil/files/2013/12/pub-­PP-­ellis.pdf. 97. Ellis, 2014. 98. Kevin Gallagher, The China Triangle (New York: Oxford University Press, 2016). 99. Carol Wise, Dragonomics: How Latin America Is Maximizing (or Missing Out on) China’s International Development Strategy (New Haven, CT: Yale University Press, 2020). 100. Daniel Méndez Morán’s 136: el plan de China en América Latina (2018). 101. China en America Latina: 10 casos de estudio, Enrique Dussel Peters, ed. (Mexico City: Red China-ALC, 2014). 102. Lorena Herrera-Vinelli, A la sombra del dragón. Interdependencia asimétrica de China con Ecuador y Costa Rica (Quito, Ecuador, FLACSO, 2021). 103. La Nueva Relación Comercial de America Latina y el Caribe con China: Integración o Desintegración regional? (Mexico City: Red ALCChina, 2016). 104. Fernando Villavicencio, Ecuador, Made in China (Quito, Interamerican Institute for Democracy, 2013). 105. Fernando Villavicencio, El Feriado Petrolero (Quito: Artes Graficas Silva, 2017). 106. La transformación de China y su impacto para Colombia, Edgar Viera Posada, Ed. Bogota, Colombia: Grupo de Investigación y Gestion Empresarial, 2013). 107. Luis Garcia-Corrochano and Ruben Tang, Las Relaciones Entre el Peru y China (Lima: Pontifica Universidad Católica de Peru, 2011). 108. La economia Esparza y las industrias extractivas: desafíos para el Peru, Cynthia A. Sanborn and Victor Torres C., eds. (Lima, Peru: Universidad del Pacifico, 2009).

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109. Política Exterior China: relaciones regionales y cooperación, Raquel Isamara Leon de la Rosa and Juan Carlos Gachuz Maya (Puebla, Mexico: Benemérita Universidad Autónoma de Puebla, 2015). 110. Jorge E. Malena, China: La Construcion de un “Pais Grande” (Buenos Aires: Editorial Cefiro: 2010). 111. Richard Bernal, Chinese Foreign Direct Investment in the Caribbean (Washington, D.C.: Inter-American Development Bank, 2016). 112. Richard L.  Bernal, Dragon in the Caribbean: China’s Global Re-Dimensioning – Challenges and Opportunities for the Caribbean, 2nd Ed. (city, publisher, 2014). by | Apr 28, 2014. 113. China-Latin America Relations: Review and Analysis, He Shuangrong, ed. (Beijing: Paths International Ltd., 2011). 114. Xanran Yu, China’s Strategic Partnerships in Latin America: Case Studies of China’s Oil Diplomacy in Argentina, Brazil, Mexico, and Venezuela, 1991–2015 (Lanham, MD: Lexington Books, 2017). 115. Peter Gordon and Juan José Morales, “Long View: The 16th-Century Trade Route That Brought China to Mexico,” America’s Quarterly, April 15, 2019, https://www.americasquarterly.org/article/long-­view-­ the-­16th-­century-­trade-­route-­that-­brought-­china-­to-­mexico/. 116. Gavin Menzies, 1421: The Year China Discovered America (2008). 117. Raúl Bernal-Meza and Li Xing, China–Latin America Relations in the 21st Century: The Dual Complexities of Opportunities and Challenges (London: Palgrave Macmillan, 2020). 118. China’s Interactions with Latin America and the Caribbean: Conquering the US’s Strategic Backyard? Nele Noesselt, Ed. (Baden-Baden, Germany: Tectum-Verlag, 2021). 119. Thierry Kellner and Sophie Wintgens, China-Latin America and the Caribbean: Assessment and Outlook (Milton Park, UK: Routledge, 2021). 120. David B. H. Denoon’s China, The United States, and the Future of Latin America: U.S.-China Relations, Volume III (New York: NYU Press, 2017). 121. Latin America Facing China: South-South Relations beyond the Washington Consensus, Alex E.  Fernandez Jilberto and Barbara Hogenboom, Eds. (New York: Berghahn Books, 2010). 122. Shoujun Cui and Manuel Pérez García, China and Latin America in Transition: Policy Dynamics, Economic Commitments, and Social Impacts (London, Palgrave Macmillan, 2016). 123. China Engages Latin America: Tracing the Trajectory, Adrian H. Hearn and Jose Luis Leon-Manriquez, Eds. (Boulder, Colorado: Lynne Rienner, 2011). 124. Enrique Dussel Peters, 2021 Monitor de la OFDI china en América Latina y el Caribe 2021 (Mexico, Red ALC-China, 2021).

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125. Enrique Dussel Peters, “Globalización con características chinas y su reciente relación con América Latina y el Caribe,” en Cervera Fernández, Isabel (edit.), Diego de Pantoja y China. Reflexiones sobre las relaciones históricas entre China y el mundo hispánico (Beijing, China Social Sciences Press: Pekín, 2020), pp. 304–329. 126. Enrique Dussel Peters, 2020 Monitor de la infraestructura china en América Latina y el Caribe 2020 (Mexico: Red Académica de América Latina y el Caribe sobre China, México, 2020). 127. “China-Latin America Finance Database,” Interamerican Dialogue, Accessed August 31, 2021, https://www.thedialogue.org/map_list/. 128. “China Stakes Its Claim in Latin American Energy,” Institute of the Americas, February 2021, https://user-­9sjqssx.cld.bz/China-­Stakes-­Its-­ Claim-­in-­Latin-­American-­Energy/2/. 129. Barbara Stallings’ Dependency in the Twenty-First Century?: The Political Economy of China-Latin America Relations (Cambridge, Cambridge University Press, 2020). 130. Bernal-Meza and Xing, 2020. 131. “China, Latin America and the Environment,” Dialogo Chino, Accessed August 26, 2021, https://dialogochino.net/en/. 132. Cintia Quiliconi and Pablo Rodríguez Vasco, “Chinese Mining and Indigenous Resistance in Ecuador,” The Carnegie Endowment for International Peace, September 2021, https://carnegieendowment. org/files/202109-­Quiliconi_Vasco_China_and_Ecuador_final.pdf. 133. Atha, Katherine, Jason Callahan, John Chen, et al. “China’s Smart City Development”, U.S.-China Economic and Security Review Commission. Last Modified January 2020. China’s Smart Cities Development | U.S.CHINA | ECONOMIC and SECURITY REVIEW COMMISSION (uscc.gov). 134. Jonathan Hillman and Maesea McCalpin, “Watching Huawei’s ‘Safe Cities’,” CSIS, November 4, 2019, https://www.csis.org/analysis/ watching-­huaweis-­safe-­cities. 135. R. Evan Ellis, “Chinese Security Engagement in Latin America,” Center for Strategic and International Studies, November 2020, https://www. csis.org/analysis/chinese-­security-­engagement-­latin-­america; R.  Evan Ellis, “The Evolution of Chinese Security Engagement in Latin America,” in China’s Interactions with Latin America and the Caribbean: Conquering the US’s Strategic Backyard? Nele Noesselt, Ed., Baden-Baden, Germany: Tectum-Verlag, January 2021, pp. 9–32; R. Evan Ellis, XX; R. Evan Ellis, “La aparición de China en las Américas,” Military Review, -February 2015, pp.  66–78, https://www.armyupress.army.mil/Portals/7/ militar y-­r eview/Archives/Spanish/Militar yReview_20150228_ art011SPA.pdf. January; and R.  Evan Ellis, “China  – Latin America

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Military Engagement,” Carlisle Barracks, PA: U.S.  Army War College Strategic Studies Institute, August 2011, https://ssi.armywarcollege. edu/pubs/display.cfm?pubID=1077; among others. 136. Gabriel Marcella, “China’s Military Activity in Latin America,” America’s Quarterly, January 20, 20212, https://www.americasquarterly.org/fulltextarticle/chinas-­military-­activity-­in-­latin-­america/. 137. See, for example, R. Evan Ellis, “The evolution of Panama-PRC relations since recognition, and their strategic implications for the US and the region,” Global Americans, September 21, 2018, https://theglobalamericans.org/2018/09/the-­e volution-­o f-­p anama-­prc-­r elations-­since-­ recognition-­a nd-­t heir-­s trategic-­i mplications-­f or-­t he-­u -­s -­a nd-­t he-­ region/; R.  Evan Ellis, “Taiwan’s Struggle for Partners and Survival,” Global Americans, December 7, 2018, https://theglobalamericans. org/2018/12/taiwans-­struggle-­for-­partners-­and-­survival/; R.  Evan Ellis, “PRC Engagement in Latin America and Implications for Taiwan and the United States” Global Taiwan Brief, Vol. 3, Issue 12, June 13, 2018, http://globaltaiwan.org/2018/06/13-­gtb-­3-­12/?utm_source= Global+Taiwan+Updates&utm_campaign=bc6a065e1b-­E MAIL_ CAMPAIGN_2018_06_12_04_10&utm_medium=email&utm_ t e r m = 0 _ d 5 a 8 7 7 4 9 a 5 -­b c 6 a 0 6 5 e 1 b -­4 3 6 7 5 0 3 9 3 & m c _ cid=bc6a065e1b&mc_eid=22a4cf919a#REvanEllis061318, among others. 138. Taiwan’s Relations with Latin America: A Strategic Rivalry between the United States, China, and Taiwan, He Li and Antonio C. Hsiang, Eds. (Lanham, MD: Lexington Books, 2021). 139. Rachael Will, “China’s Stadium Diplomacy,” World Policy, June 6, 2012, http://worldpolicy.org/2012/06/06/chinas-­stadium-­diplomacy/. 140. Soft Power with Chinese Characteristics, Kingsley Edney, Stan Rosen, and Ying Zhu, Eds. (Milton Park, England: Routledge, 2020). 141. “The Big Question: Understanding China’s Soft Power,” National Endowment for Democracy, June 2017, https://www.ned.org/wp-­ content/uploads/2017/06/Understanding-­Chinas-­Sharp-­Power.pdf. 142. María Catalina Micolta, “China’s Communication with a Latin America Audience,” Andres Bello Foundation, September 23, 2020, https://fundacionandresbello.org/en/research/chinas-­communication-­with-­a-­latin­american-­audience/. 143. “China’s Overseas United Front Work: Background and Implications for the United States” U.S.-China Security and Economic Review Commission, October 11, 2021, https://www.uscc.gov/research/ chinas-­o verseas-­u nited-­f ront-­w ork-­b ackground-­a nd-­i mplications-­ united-­states.

CHAPTER 2

China’s Efforts to Reorient the Global Economic Order to Its Benefit

China’s Global Objectives China’s activities in Latin America and the Caribbean may be understood as one part of its broader efforts to leverage and transform its position in the interconnected global environment, to achieve a wealthy, strong, and modern state, to the benefit of the continued rule of the Chinese Communist party, and the security of the Chinese state. This vision was articulated with relative clarity in President Xi Jinping’s famous November 2012 speech on the “Chinese Dream” and the “Road to National Rejuvenation.”1 Some authors see China as having a very different worldview about democracy, order, and the rights and relationships between States, which will contribute to the transformation of the international system as Chinese power grows.2 By contrast to the principally political-military strategy of global domination pursued by the Union of Soviet Socialist Republics (USSR) during the Cold War, China’s global strategy is principally economic in its orientation, although it does contain supporting components in the diplomatic, institutional, and security domains that arise from the real or anticipated imperatives as China pursues its rise in a world of established powers and other actors who may see that advance as threatening. Such supporting strategies include working to ensure that the global institutional order, which China had only a limited role in shaping, does not threaten and, where possible, supports its economic and strategic goals. It also includes © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_2

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preparing to fight, in both military and other domains, against established powers such as the United States if they seek to resist its rise.3 The core argument of this book is that, in pursuing its economically oriented global strategy, China is in practice, through its success and style of engaging, prejudicing the prosperity and development of the regions with whom it engages by capturing a disproportionate share of the benefits of the value added from economic activity for itself, and also helping the consolidation and survival of authoritarian populist regimes with which it engages, thus “distorting” development and democracy.

China’s Economically Oriented Strategy The needs and imperatives of PRC global engagement have evolved with the growth and sophistication of Chinese power since it began its current economic takeoff with Deng Xiaoping’s opening of China’s economy to the world in 1978. Since that time, its activities have been driven by largely economic imperatives, although, as noted previously, they have also included political, institutional, and security engagement in support. As Raul Bernal-Meza puts it, China has increasingly influenced the foreign policy agenda, but has refrained from extending its political objectives to agendas that do not correspond to its interests.4 A fundamental component of China’s objectives has been securing the greatest possible portion of the value added for the Chinese people, with respect to the extraction and transformation of commodities and foodstuffs, and the supply of markets. In such efforts, PRC-based state-owned enterprises (SOEs), financial institutions, and other Chinese commercial entities were the principal repository. While large national-level SOEs, such as China National Petroleum Corporation (CNPC) or State Grid, are the key focus to China’s advance, the PRC uses its authorities through both the state and the party to align a range of other quasi-commercial actors to its strategy, including SOEs operating more at the provincial level such as the automaker Chery (from Anhui province), and private firms such as Sany in Construction, the Ant group of Chinese billionaire Jack Ma, the rideshare company DiDi Chuxing, and smaller groups of investors. China’s pursuit of a dominant position in markets for its goods and services has been the complement to its strategy with respect to commodities and foodstuffs. In pursuing markets, Chinese companies have sought to move into ever more high value-added products and services and from

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the sale of its products by others to ownership of the companies selling the goods and providing the services in customer countries. In China’s foreign engagements, just like its domestic ones, PRC-based companies have sought to develop or acquire needed technologies and know-how, and leverage their experience in one area, to expand into others, particularly where the related sectors were seen as complementary, supported vertical or horizontal integration, or were otherwise strategic because of the technologies or value added involved. As expressed through policy documents such as Made in China 2025 and China’s Five-Year plans, these came to include technologies such as 5G, artificial intelligence, and robotics, among others.5 The behavior of Chinese SOEs, supported by the Chinese government, has followed a logic understandable to most large, multinational companies: Seeking to acquire, integrate, and exploit new technologies important for competitiveness and dominance in the sector, and seeking a position in complementary sectors that permitted synergies from horizontal and vertical integration. China, like Western multinational companies, has pursued these objectives through a combination of internal processes, strategic partnerships, and acquisitions. The difference between the pursuit of these goals by Chinese SOEs and other entities, versus non-Chinese companies, is that the Chinese ones have been aided by the resources and support of the Chinese state. This includes assistance in putting together projects and deals across multiple sectors, often involving the integration of financial instruments. It also includes support from the state’s power as a regulator at home to influence calculations of China’s partners in deals abroad. The PRC has also been able to leverage the government’s numerous mechanisms to integrate its national industrial policy objectives with the activities of its companies far more effectively than have Western governments and their companies.

The Bid for Connectivity A key driver of China’s present strategy, rooted in its orientation toward the world throughout its history,6 is its bid to orchestrate economic relationships with the world that surrounds it, to its own economic benefit. The contemporary Chinese “Belt and Road Initiative” reflects the instrumentalist and fundamentally mercantilist attitude that underpins the PRC attitude toward its development through state-led capitalism. Its

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scope is enormous. According to a multi-year study by the researchers with the AidData project at William and Mary University, Chinese overseas development spending has encompassed 13,427 projects in 165 countries since 2001, with Chinese banks loaning over $840 billion to finance such efforts.7 While not all of these projects are associated with BRI, the principal thrust has been about building infrastructure or networks that facilitated China’s access to something that it desired—commodities, or resources, or markets. In this concept, “building” the desired network supports multiple Chinese objectives: it provides an economically beneficial activity for the PRC-based builder and the financing institution, while making access to the desired object (resources or markets) cheaper, or more reliable. With time, China’s concept has expanded from merely “building” infrastructure to facilitate access to particular resources or markets to “operating” that infrastructure to realize its value added. Early examples of this evolution include the port operations of the initially Hong Kong– centered Chinese firm Hutchison Whampoa and, more recently, China Shipping’s bid to increasingly dominate global shipping routes.8 China’s connectivity focus contributes to its strategic objectives in multiple ways. On one hand, consistent with the prior focus of trading powers in previous centuries like the British and Dutch to dominate ports and trade routes,9 China’s control over transportation, electricity, telecommunications, and e-commerce infrastructure facilitates its access to resources and strategic markets, and sometimes helps its companies to win associated contracts and market position. At the same time, its role in digital infrastructure, including telecommunications and surveillance architectures, positions it to gain potentially useful information from, and about, the companies, politicians, and other actors exchanging data in networks it operates or into which it has supplied components.

Supporting Strategies To achieve its economically oriented goals, the PRC requires a configuration of global institutions, political and human relationships that facilitate, or at least do not threaten its economic advance. China’s emergence has occurred in the context of a global political, institutional, commercial, and financial order largely not of its own making, including the United Nations and its institutions, regional institutions such as the Organization of American States and the African Union, financial institutions of the

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Bretton Woods system, including the International Monetary Fund (IMF) and the World Bank, to name a few. That system and its institutions have, ironically, been key enablers of China’s advance by facilitating a rational system of trade, finance, and international commercial law in which it can do business with the world. Yet China realizes that such political relationships and institutions must be managed to avoid prejudicing PRC interests and ultimately better facilitating them10 as China’s power grows. Political Engagement As during prior periods of its history, contemporary PRC bilateral political engagement has generally not focused on formal political or military alliances or creating a system of states adhering to its own system of political organization. Indeed, China’s approach to political engagement has generally been very flexible regarding the ideological orientation, organization, and domestic actions of its partners, demanding only that those partners recognize its claim over Taiwan and abstain from criticizing the PRC regarding its activities in areas such as Hong Kong, Xinjian, or its territorial claims and militarization of islands in the South and East China Sea. China’s principal focus in its interactions with partners is building relationships and webs of influence that prevent those states from working against Chinese interests, oblige them to treat its companies well, and where possible, induce those states to support PRC positions on economic and supporting foreign policy initiatives of key importance. Its objectives may be understood in terms of a loose hierarchy of goals that blurs foreign and domestic engagement. At the apex, China demands “no-interference in domestic affairs.” While PRC respect for the actions of other states is more a matter of style than reality, it places great emphasis on other states not questioning or involving themselves in what the PRC defines as Chinese affairs.11 At the same time, China’s deference to the rest of the world has dissipated as its economic power has grown. While the Chinese rarely “threaten” partners with sanctions, let alone military actions, it has repeatedly taken actions and made statements to “remind” its partners that their actions could put Chinese trade, loans and investment, and other forms of economic benefits at risk12 as will be discussed further in Chap. 5.

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The Role of “China’s Example” and Multipolarity As noted previously, China has been careful not to promote a particular “political model” among its partners. Nonetheless, it has suggested in official discourse that its state-led approach and focus on order contrasts to the relative chaos of Western democracies, as seen in the US racial violence and presidential election dispute.13 It thus subtly suggests, and is open to the interpretation by others, that its example may offer a model for the choices of developing nations.14 For those nations, thus, the perception of China’s relative success in controlling the Covid-19 pandemic and growing its economy while the United States and Europe continued with slower growth, coupled with the direct benefits from PRC demand for its commodities and agricultural product, Chinese loans, and investment to those economies, impacts in subtle and not-so-subtle ways the choices that individual countries and elites make between the rights and liberties of Western style democracy, and the sacrifice of those values for the hope of greater order, societal security, and economic results from the Chinese approach. Beyond the question of China’s “example,” the concept of a “multipolar world”15 has shaped not only China’s foreign policy rhetoric but also its choices in relations with friendly authoritarian regimes, among others. Particularly in the past two decades, the PRC in its official discourse has welcomed the transition to what it calls a “multipolar world.”16 For such officials, however, such multipolarity is not simply a reality that it recognizes, but a strategic benefit that it recognizes and seeks to preserve and advance through its policies, even while seeking to avoid those interactions with anti-US regimes such as North Korea, Venezuela, Iran, and others create problems for China’s pursuit of economic and technology objectives with the United States and West. China’s Incubation of Populism and the Export of Digital Authoritarianism As noted previously, in PRC global engagement to date, with the exception of its growing willingness to tout the positive benefits of China’s authoritarian system by comparison to the chaos of Western democracies, the PRC has not explicitly sought to impose its model of political organization on its global partners. Nonetheless, through China’s pursuit of its own economic and strategic interests, it has inadvertently served as an

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incubator of authoritarian populist regimes across the globe. The fact that China may not be explicitly pursuing political transformation as a policy objective does not lessen the effect. In the process, it has helped to export its own model of “digital authoritarianism,” with profound long-term consequences for both the global strategic environment and democracy and human rights. Engagement with Multilateral Institutions In multilateral institutions, as with bilateral relations, the PRC seeks first to neutralize activities and discourse prejudicial to its interests, and where possible, support from or collaboration with those institutions regarding its objectives. With respect to global institutions, the PRC works through the United Nations Security Council and General Assembly to avoid votes contrary to its strategic interests and that of its friends. With respect to UN-affiliated institutions, the PRC received significant international attention for its efforts to prevent the World Health Organization (WHO) from releasing information critical of the PRC origins of the Covid-19 pandemic.17 In a similar vein, the PRC engages with the Economic Commission on Latin America and the Caribbean (ECLAC) to realize joint events that favorably frame Chinese engagement in the region.18 As with ECLAC, the PRC also works through individual regional entities such as the Inter-American Development Bank (IADB), which it officially joined in January 2009.19 As with ECLAC, China uses its influence to ensure those organizations do not publish reports critical to its impact on the region, or otherwise prejudice its work. Where possible, the PRC works to involve those organizations in initiatives that support its agenda, including collaboration on loan packages. As an example, the construction of the Ecuadoran port of Posorja, being performed by China Harbor, is supported by a combination of loans from the Inter-American Development Bank and the supported by the “China Co-financing Fund for Latin America and Caribbean Region.” In 2021, the North American head of the IADB, Mauricio Claver-Carone, expressed concern over the level of influence that the PRC had obtained within the IADB, and their use of the organization to win projects for Chinese companies. With respect to regional political engagement, the PRC has been a very active observer in the Organization of American States (OAS) since 2004. Nonetheless, it has preferred to work through the Community of Latin

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American and Caribbean States (CELAC), which explicitly does not include the United States and Canada and which does not have a permanent Secretariat that would help the organization coordinate member positions regarding China. Working through CELAC is thus a deliberate choice for the PRC, allowing it to promote its own agenda to the region in a multilateral setting, as it did with the China-CELAC 2015–2019, 2019–2021, and 2022–2024 plans.20 In September 2021, President Xi pointedly made a video address to the CELAC summit, proclaiming China’s intention to work through the forum and elsewhere “to overcome difficulties together and jointly create opportunities to build a community of shared future between China and Latin America.” China’s strategy also includes a selective role in trans-regional organizations to support its agenda. These include formation and promotion of the Asian Infrastructure Investment Bank (AIIB), whose principal role is effectively to finance Belt and Road Initiative infrastructure projects, in support of Chinese interests. Established in 2016, by 2021, the bank had 103 approved members and had even achieved observer status at the United Nations.21 The PRC also actively supports “lesser” trans-regional organizations such as BRICS, which links actors on multiple continents: South America (Brazil), Africa (South Africa), Eurasia (Russia), and Asia (China).22 Such forums support China’s political engagement and coordination through a multilateral channel that lends greater authority and is less threatening than unilateral statements or agreements with individual states. The BRICS has also become a vehicle for supporting China’s economic development initiatives through the associated “New Development Bank (NDB).” By September 2021, NDB had 80 projects worth $30 billion, with even Uruguay’s center-right government joining the institution. China’s institutional strategy can also be seen in its promotion of international trade institutions advancing a concept of trade that benefit its often-predatory style, with provisions that open partner markets on one hand, yet are relatively ineffective in areas such as mechanisms for protecting intellectual property, addressing nontariff barriers such as those commonly used by the PRC, or resolving trade disputes. China’s promotion of the Regional Comprehensive Economic Partnership (RCEP) in Asia is a key example.23 In other cases, China has promoted multilateral trade agreements that are formally more intrusive and that would strengthen bonds between China and key US partners, to the exclusion of the United States. Key examples in this regard include PRC work with the European

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Union toward a China-EU trade and investment agreement.24 Similarly, in September 2021 China applied to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP),25 an agreement deriving from the Trans-Pacific Partnership (TPP) in which the United States had initially played a leadership role, but from which the United States had withdrawn during the Trump administration. China is also actively engaged in the battle for international multilateral symbolism. The 2008 Beijing Olympics were a landmark in showcasing to the world its emergence as a modern emerging power. Its hosting of the 2022 Olympics provided a similar opportunity for it to showcase to the world its progress, including the ability of its authoritarian system to triumph over Covid-19,26 at a time in which the United States and Europe and other parts of the Democratic world continue to struggle with the effects of the pandemic. China’s role in the World Economic Forum at Davos, and China’s own version of Davos, the Boao forum, are illustrative of its offer of its alternative example of governance to the world.27 China’s Financial Strategy As a complement to its institutional strategy, the PRC also seeks to advance the international position of its currency, the RMB. China recognizes that it is at an inherent disadvantage in a world whose ability to borrow, finance, and clear international transactions is dominated by the US dollar and the euro, and correspondingly seeks to change this situation. To do so, China leverages financial transactions across regions of the world, as well as loans and currency swap agreements, plus economic diplomacy.28 The December 2015 acceptance of the RMB as part of the IMF basket of international reserve currencies29 was an important landmark in PRC efforts toward this end. The increasing weight of Chinese banks in the global economic system has been one tool for advancing this objective. As one scholar noted, the market capitalization of publicly traded companies in the Chinese stock market alone was topping $10 trillion by 2020.30 China is currently seeking to advance the digitization of its currency, the RMB. Doing so will potentially allow it to accelerate the introduction of the RMB into international use, particularly among actors uncomfortable with the US increasing use of the domination of the dollar in international currency transactions and clearing, as a tool for applying sanctions against individuals and states in the international system. As an added

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bonus, China’s potential export of the digital RMB or its digital currency technology to friendly authoritarian regimes will also create opportunities for the PRC to export these technologies to them as an instrument for financial and political control. Security Strategy In military and other security affairs, the PRC is working to create a world safe for increasing Chinese reliance on overseas markets, sources of supply, and the presence of its companies and workers. The Chinese government and the PLA is also working to create and strengthen response options for a possible reaction by established powers to its advance, including a war that could be precipitated to stop it.31 China’s leadership perceives that its work to reorder the global system more to its benefit, largely at the expense of established powers such as the United States and Europe and their dominance of established institutions, will ultimately lead those powers to attempt to block its rise. In Chinese official policy documents, PRC leaders speak of a period of strategic opportunity to grow with limited pushback from the West, followed by a time in which China has now entered, in which the established powers more actively resist its rise.32 In the near term, China’s growing global engagement, including its dependence on distant markets and sources of supply, and the increasing operations of PRC-based companies and personnel across the world, has increased imperatives for the global engagement of the PLA, as reflected in its 201533 and 201934 National Defense White Papers. The expanding global activities of Chinese companies and personnel has fed arguments for a corresponding expansion in military engagement, which has paralleled and complemented growing PLA capabilities for global operations that make that possible.35 Chinese counter-piracy operations off the coast of Somalia in 2010,36 as well as its participation in United Nations Peacekeeping Operations across Africa, including close to Chinese commercial operations in Darfur,37 reflect those imperatives. China’s establishment of a military base for the PLA Navy in Djibouti,38 close to the Suez Canal, a strategic international logistics chokepoint, also reflects this logic.

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PRC Style of Pursuing Its Goals China’s strategy may be understood as principally economic, with institutional political and security strategies in support. The Asian game wéiqí (围棋) or “Go” is a useful metaphor for the Chinese approach, insofar as the PRC is waging a “war of position.” In contrast to the Soviet Union’s strategic approach during the Cold War, however, China’s war of position is not so much military or political, as it is economic. The mid-term objective of China’s advance in a country like Panama, for example, is to use its economic position and the associated political influence it generates, to secure objectives that further support its commercial advance, both in the country and in other areas. While the PRC thus notably is not seeking to exploit the influence associated with its economic presence to overthrow pro-US democratic regimes, establish formal military bases and alliances in the Western Hemisphere, or create vassal states, that influence does have a political component, in inducing governments and companies to censor themselves on issues of sensitivity to the PRC, such as its activities in Hong Kong, Xinjiang, Tibet, questions about the Chinese origins of the Covid-19 pandemic, and other issues. For the PRC, the state-owned enterprise is a core actor in its strategy, although the roles of entities owned by local governments, as well as large and small private entities guided through ties of their leadership to the Chinese Communist Party, are also relevant. In general, the focus of such PRC efforts is to build up, in size and capability, such entities as the repository of China’s technology39 and value added, as part of the broader PRC effort to capture an increasing portion of global value added, while simultaneously seeking secure access to commodity inputs needed for its economy on one hand,40 and secure access to markets for its goods and services in strategic sectors, and the key technologies associated with dominating those sectors, on the other. While this process generally involves the Chinese government promoting its companies, it also occasionally involves disciplining them, as seen by recent PRC government moves against the Ant group and DiDi Chuxing, where the combination of the potential power and autonomy of those actors, and the technology and data they control, has made it vital to the Chinese leadership to ensure that they are firmly under state control. In general, the PRC’s primary tools for pursuing its economic-led strategy are the size of its markets, its financial resources, and the supporting efforts of its government and the Chinese Communist Party. China’s

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leveraging of the attractiveness of its market is sometimes explicit, and on other occasions, a subtle, implied element in its discourse. China’s 1.4 billion consumers, and their increasing purchasing power as they enter the global economy, have long been a siren song for Western companies in both Europe and the United States. That market, however, is also attractive to others throughout the world from Latin America to Africa to the Middle East. The reality of what Chinese consumers and companies are interested in buying, and the ability to access them in the protected Chinese market, is often different from the hopes of those foreigners who wish to sell to them. Yet it is the power of hopes and perceptions, more than the reality, that influences Western politicians, businesspersons, and others. As a complement to such hopes, businesspersons in Latin America and elsewhere are also often lured by the possibility of serving as the local partner for a large Chinese firm in their own market, putting their local knowledge and connections at the service of the Chinese, with their presumed enormous operational capabilities and resources, enriching the local partner while helping the Chinese firm to penetrate the local market. The Chinese government supports the advance of its companies in at least three ways. On one hand, the government facilitates large multi-­ sectoral deals that other multinational firms and governments cannot easily match. This includes the use of formal strategic partnerships established between the PRC and other governments, accompanied by a ministerial level working group, and subgroups, which meet periodically to review and resolve problems with Chinese projects or other issues.41 Second, the Chinese government uses its power as a regulator in China, often implicitly, to advance the position of its companies abroad as they negotiate with foreign partners and governments. Although it PRC rarely makes such quid pro quos explicit, for example, foreign companies seeking to do business in China have long perceived that their access in China will be facilitated by working with a well-connected Chinese company in their own domestic market. In this fashion, the role of the PRC government as a gatekeeper to the Chinese market opens doors for Chinese companies to penetrate foreign markets through partnerships. Third, the Chinese government supports the advance of its companies through the MSS and other intelligence and security services. The PRC practice of obliging foreign investors in China to partner with local firms to obtain access to the Chinese market is well known. Those partners then frequently work to learn their Western processes and technologies, and

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often, steal them and use them in their own products focused on the Chinese and foreign markets.42 In the same way, however, the Chinese security services also helps its companies to obtain access to technology, processes, and business intelligence about competitors and their offerings and bids in foreign markets as well.

Chinese Soft Power A key instrument in China’s global pursuit of its economic and other objectives is its “soft power.” Indeed, China’s President Xi Jinping himself, in his speech to the 19th National Congress of the Communist Party of China in October 2017, emphasized the importance of Chinese soft power as a tool in advancing PRC national objectives.43 While both PRC and US soft power involve a combination of different vehicles, the relative weight of some motives versus others is substantially different in US soft power versus Chinese soft power. PRC soft power, while also involving some internalization of Chinese values and teachings, is based in part in the partner’s expectation of benefit. Such soft power thus coexists more readily with, and is not fully countered by, mistrust toward the PRC, its government, and its companies among those partners. Indeed, a September 2021 study of 379 Latin American opinion leaders found that 80% said that China had a “high” level of influence in Latin America, yet less than 10% viewed the PRC positively. The vast majority of respondents felt that their country’s primary focus with respect to China should be commercial relations and investment.44 For China, soft power is perceived as arising more from the grandeur and attractiveness of its culture.45 Today, the rhetoric and general approach of China’s cultural promotion organization Hanban, its global system of Confucius Institutes, and much of its official public diplomacy reflect such historically rooted attitudes about the influence and transformative power of Chinese culture over its neighbors. Despite this self-image, however, in-depth knowledge of China’s culture is relatively limited among the partners among which the PRC engages globally. Moreover, strong control and censorship within the PRC media has meant that elements of traditional culture, which may be perceived in other parts of the world as racist, sexist, homophobic, or otherwise offensive, are often not recognized as such in China, even when they spawn the reproach of international audiences.46

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With the increasingly assertive, self-confident style of Chinese engagement during the administration of Xi Jinping, accompanied by ever more authoritarian domestic policies and aggressive behavior in its own near abroad, the PRC’s international image has deteriorated.47 Nonetheless, because China’s influence is driven in part by the expectation of benefits, rather than trust or affinity for the Chinese system, damage to its image from offensive communications or bad Chinese behavior does not significantly reduce the interest of partners to work with it in the economic domain, nor make them more likely to speak out on its domestic or international policies. Chinese people-to-people diplomacy is the complement of expectations of benefit as components of Chinese soft power. Such diplomacy includes Confucius Institutes, scholarships for students and other visitors, trips for journalists, and even politicians, sponsored by the international liaison department (ILD) of the Chinese Communist Party.

Why It Matters China’s efforts to remake the world order to its benefit matter. What is at stake not only is the question of WHO realizes the benefits of global development but also the impact on the global system itself. The PRC fundamentally undermining in adverse ways, through its sheer size and engagement style, the system constructed by the United States and its European allies following World War II, with its base in respect for human rights, democratic self-determination of peoples, the fundamental rights of peoples and states, and other values. The Chinese Communist government is not doing so to be malevolent, or to politically dominate the world, but because its own long history has never led it to embrace such a system, particularly when it perceives that system impedes the security and wealth it seeks for the Chinese state and the Communist Party. As China’s economic power and related influence have grown, the PRC has become increasingly assertive regarding its own perceived rights in the international system. The leadership style of President Xi Jinping has complemented the self-confidence that has naturally accompanied China’s growing power. While it is impossible to predict the trajectory of China’s evolving position in the world system, the confluence of its economic growth, move up the technology ladder, impact on global institutions, and culturally rooted political style suggest a number of worrisome implications. First, while

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some suggest that China is an ascended power now headed for problems, and not an ascending one, such analyses use analyses from the past to find in China’s current challenges evidence of the unsustainability of its rise.48 Yet such wishful thinking has yet to show credible evidence of a real Chinese decline. The more disturbing reality is that, absent dramatic change, the PRC’s style of engagement with the world, and the impact that comes from its growing economic and military power and associated influence, is likely to continue for the foreseeable future. China will not only continue to expand its significant portion of the global economy, but PRC-based companies will continue to increase their ownership share of extractive and agricultural industries. They will increasingly dominate strategic product and services markets,49 capturing a significant portion of their value added and relegating local companies and workers to a subordinate role. PRC companies will correspondingly increasingly dominate global connectivity from ports and logistics to electricity, telecommunication, and e-commerce and use that connectivity dominance to support their continued advancement in other sectors. In short, the global order will continue to evolve toward a situation in which the world’s economic system increasingly transitions from one historically benefiting the United States and European companies, who support associated norms of transparency, free markets, worker rights, and sensitivity to environmental and other impacts, to one in which the ownership of resources, and associated flows and returns to capital, increasingly benefit the PRC, while the norms to which that world is accustomed are increasingly under assault where their realization does not benefit China and its agents. In the political and institutional space, the expanding Chinese role implies that the institutions of global governance will likewise increasingly be shaped by China’s style and preferences. Affected entities include the United Nations and its associated organs, financial institutions such as the World Bank and IMF, and regional political and financial institutions. In this space, new institutions that serve Chinese strategic purposes, such as the AIIB, will expand and increase in importance. Some which particularly serve Chinese purposes, such as CELAC in Latin America, the Forum on China-Afric Cooperation (FOCAC) in Africa, and the 16+1  in Europe, will take on an expanded role, while others will be transformed and perhaps even sidelined. China’s orientation on benefit to its own people probably means that its increasing power will not bring about a self-conscious block of PRC-­ allied states organized on the model of the Chinese Communist Party. Nevertheless, PRC funding and other support will likely lead to an

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expanding number of non-democratic states relatively hostile to the US and other Western interests. It will correspondingly help to shift the orientation of multilateral institutions and the prevailing norms of the international order from the dominance of insisting on traditional democracy, individual state and human rights, to expanded “tolerance” for whatever states chose to do in their own territory, to the extent that states do not question or actively seek to threaten or organize against China, and the functioning of the new international system to its benefit. In short, the world being reformed by growing Chinese engagement may be partly recognizable for Westerners, but profoundly uncomfortable for those persons, businesses, and states not aligned with PRC interests.

Alternative Perspectives China’s motives, its trajectory, and the implications for the rest of the world are subject to multiple interpretations, to say the least. This work strongly argues one particular perspective, informed by the study of Chinese engagement in Latin America. It is nonetheless important to acknowledge and at least briefly address important alternative perspectives. China as Just a Poor Country Trying to Develop? Some scholars, particularly in the PRC, would take issue with the argument that China is seeking to orient global economic relations to its benefit, or that China is in some ways attempting to alter international institutions, or contribute to the flourishing of anti-US authoritarian regimes, however indirectly. For many taking this counter-position, attempts by decision makers and scholars in the United States to highlight the adverse impact of China’s engagement on the rest of the world simply reflect US fears of China’s advance as a challenge to its hegemony in Latin America, projecting on China “imperialist” aspirations that it does not possess. In this perspective, the PRC is merely a resource poor developing country trying to feed and achieve a level of prosperity for its population. Such arguments conduct a logical sleight-of-hand by attempting to conflate any expression of concern regarding the behavior of China or its agents, and the implications of that activity, as impermissible “China-­ bashing” by representatives of a hegemonic United States lamenting its own decline. This book does not seek to establish malevolent PRC intent.

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Rather, it argues that its government, and individual Chinese companies and actors, in pursuing their own interests, whether legitimate and with good intentions or otherwise, are transforming the region in ways that are not beneficial for its development, democracy, or individual liberties, let alone for the strategic position of the United States.

China’s Engagement with Latin America Is Decelerating? For some scholars, some indicators from 2019 and 2020 suggest that China’s engagement with Latin America and other parts of the world may be decelerating. They point to the lack of new policy bank lending in 2020,50 the failure of a number of high-profile Chinese projects to go forward including the Nicaragua Canal and the Twin-Ocean railroad, and inaction on or cancellation of promised Chinese projects in states that have recently recognized the PRC such as Panama, the Dominican Republic, and El Salvador. As during the global economic crisis of 2008, such evidence reflects temporary factors caused by Covid-19 and the collapse of China’s strategic partner Venezuela, more than enduring trends. In Panama,51 the Dominican Republic,52 and El Salvador,53 there are indications that sidetracked projects are going forward again. Moreover, as of late 2021, even with the Covid-19 pandemic, a number of important new projects were going forward, from the Bogota metro to a proposed new $2.6 billion train route from the Peruvian Andes to the coast near Marcona.54 At a broader level, one of the most compelling such arguments was made in September 2021 by scholars Hal Brands and Michael Beckley. They argued that the unique confluence of conditions which facilitated China’s unprecedented growth during the past four decades, including a permissive international environment, demographic advantages, and a welcoming of foreign presence and innovation, have fundamentally changed. They maintain that the combination of an aging population, strategic encirclement by a world that sees China politically and economically as a threat, the exhaustion of the “easy” stage of China’s expansion, and authoritarian leadership which stifle Chinese innovation combine to make China a “declining power,” which may even become dangerous as its ambitions exceed its reality.55 While superficially a compelling narrative, it is contradicted by the evidence that Chinese growth in the wake of

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Covid-19, continues to far outpace that of the United States and Europe, there is little evidence that coordination of Western powers against China has produced any real results or counterbalancing capability, and that the majority of the economic and political dysfunctionality in recent years has appeared to come from the chaotic dynamics of Western democracies rather than the clumsiness of Chinese authoritarianism. Doesn’t Everyone Do This? For some, China’s pursuit of its global economic interests through its companies, as well as pursuing political and institutional relationships to its national advantage, is no different from what every state in the international system does. The PRC’s use of its state to help coordinate and win projects, as previously discussed, is sometimes likened to the practice of state capitalism by actors from Japan and Korea to Europe, to the former Soviet Union. Those advancing a more charitable interpretation of the Chinese would argue that all strong powers leverage that power to their own advantage, so the Chinese activities described in this section are just normal hegemonic behavior witnessed among a range of actors historically. In reality, while there are important similarities between Chinese behavior and economic pursuits, and that of other strong powers historically, there are also important differences. US behavior toward Latin America and the Caribbean historically has been characterized by some as “hegemonic.”56 It is true that the United States has often behaved with hubris and has acted abusively in its relationship with its neighbors in Latin America and the Caribbean. At the same time, however, the US dedication to principles has created inherent limits in its ambitions and actions in the region. Its activities in Latin America and the Caribbean, as elsewhere, have thus spawned important debates in US domestic politics regarding issues such as the protection of human rights and the rule of law, and a desire by different US actors to alleviate the suffering and protect the rights of others there. With respect to state-led development policies, while the United States has considered and sometimes tentatively sought to apply its own versions of industrial policy, it has been on a far smaller scale. Similarly, other actors such as Japan, Korea, and Brazil have also used state-led development with greater or lesser success, including a focus on obtaining technology, using national champions, and leveraging regulatory and other tools available to

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the state. While there are similarities, the relative coherence of the PRC in its approach, and its ability to achieve unprecedented results, supported by the capabilities available in the modern technological oriented era, and the regulatory, espionage, coordination, and other tools available to the Chinese state distinguish PRC efforts from the others. Isn’t This Just Corruption? Chinese soft power, in part, leverages corruption in the government and business environments in which it operates. Indeed, it may sometimes include acts of corruption by Chinese personnel and the local elites with whom they engage. Yet the relationship between corruption, criminality, and the PRC pursuit of its interests is complex. In general, Chinese soft power only tangentially involves corruption. The disposition of both Chinese and local political and business elites to engage in corrupt act in advancing their mutual interests may lead to corruption, particularly in the conditions of weak institutional oversight and “government-to-government” deals through which many such engagements occur. Yet Chinese engagement with its partners is not inherently corrupt. Similarly, trips to China for Latin American students, journalists, and even government bureaucrats may raise ethical questions, but are only occasionally explicit violations of the rules governing the individuals who accept the favors. At a broader level, the pursuit of interests by the Chinese Communist Party and the Chinese State is best understood as amoral (as distinct from immoral). In general, the PRC government has historically not demonstrated the same level of zeal as its Western counterparts in policing the bad practices of its companies abroad, particularly when activities such as engagement in bribery advance the position of those companies in strategic sectors, to the benefit of the Chinese state. While there are anticorruption laws in the PRC, there are few cases where they have been enforced to a degree that prejudices the interests of a major Chinese SOE in its advance there. On the other hand, the Chinese have clamped down on individual Chinese businessmen, such as the 2013 imprisonment of Bo Xilai.57 It has similarly used indirect mechanisms to shut down undesirable or unauthorized activities by Chinese companies, such as increasing takes on heavy petroleum, in an apparent effort to end profiteering by Chinese companies who were surreptitiously acquiring sanctioned Venezuelan oil in violation

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of international sanctions (at a steep discount), then shipping it to Malaysia to blend it with other petroleum products and sell it on the Chinese market.58 The Chinese government has similarly exercised its oversight mechanisms against PRC-based companies with important operations abroad.59 Such individual cases, however, often are actually oriented principally toward supporting the affirmation of control by the Chinese leadership and Communist Party over commercial entities (particularly those that had become too big or independent) or putting an end to unauthorized activity that could do harm to the reputation of the Chinese state. More broadly, the question of corruption also creates opportunities for the PRC government. Foreign “requests” for the help of the PRC government to rein in its companies’ bad behavior in the partner nation territory, or its exclusive economic zones may involve negotiated “quid pro quos” in which the PRC receives something in return. At the very least, it creates an opportunity for the PRC to gain insight into the functioning of partner nation institutions, through cooperating with it, with respect to its companies.

Notes 1. Kirk A.  Denton, “China Dreams and the ‘Road to Revival,’” Origins, Volume 8, Issue 3, December 2014, https://origins.osu.edu/article/ china-­dreams-­and-­road-­revival. 2. See, for example, Raquel Isamara Leon de la Rosa, “Política exterior china: reconceptualizando el sistema Tianxia,” in Política Exterior China: relaciones regionales y cooperación, Raquel Isamara Leon de la Rosa and Juan Carlos Gachuz Maya (Puebla, Mexico: Benemérita Universidad Autónoma de Puebla, 2015). Política Exterior China: relaciones regionales y cooperación, Raquel Isamara Leon de la Rosa and Juan Carlos Gachuz Maya (Puebla, Mexico: Benemérita Universidad Autónoma de Puebla, 2015), pp.  19–62. Política Exterior China: relaciones regionales y cooperación, Raquel Isamara Leon de la Rosa and Juan Carlos Gachuz Maya (Puebla, Mexico: Benemérita Universidad Autónoma de Puebla, 2015). 3. China scholar Jorge Malena argues that China sees the US attempt to maintain its global domination making the United States its principal international threat. See Jorge E. Malena, China: La Construcion de un “Pais Grande” (Buenos Aires: Editorial Cefiro: 2010) Jorge E. Malena, China: La Construcion de un “Pais Grande” (Buenos Aires: Editorial Cefiro: 2010), pp. 125–135.

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4. Raul Bernal-Meza, “Conclusion: China and Latin America in the Global Political Economy: The Development of a new Core-Periphery Axis,” in China–Latin America Relations in the 21st Century: The Dual Complexities of Opportunities and Challenges, Raúl Bernal-Meza and Li Xing, eds. (London: Palgrave Macmillan, 2020), p. 209. 5. “‘Made in China 2025’ Industrial Policies: Issues for Congress” Congressional Research Service, August 11, 2020, https://crsreports.congress.gov/product/pdf/IF/IF10964. 6. For a good analysis of China’s historically rooted self-concept, see Jorge E.  Malena, China: La Construcion de un “Pais Grande” (Buenos Aires: Editorial Cefiro: 2010), pp. 45–97. 7. Wooley, 2021. 8. See, for example, Ricardo Sanchez, “The shipping carrier monopoly threat,” Mundo Maritimo, August 8, 2016, https://mundomaritimo.net/ noticias/the-­shipping-­carrier-­monopoly-­threat. 9. For a good discusión of China’s contemporary bid for control of global ports and shipping, see “Así avanza en América Latina la estratégica red de puertos que controla China,” BBC News, October 16, 2021, https:// www.lanacion.com.ar/el-­m undo/como-­a vanza-­e n-­a merica-­l atina-­l a-­ estrategica-­red-­de-­puertos-­que-­controla-­china-­nid16102021/. 10. See, for example, Richard L. Bernal, Dragon in the Caribbean (Kingston: Ian Randle, 2014), p. 22. 11. Evelyn Cheng, “Chinese foreign minister takes firm tone, calls for ‘non-­ interference’ between China and the U.S.,” CNBC, March 7, 2021, https://www.cnbc.com/2021/03/07/chinese-­foreign-­minister-­calls-­ for-­non-­interference-­between-­china-­us.html. 12. See, for example, Danielle Pletka, “Why China is targeting Australia with sanctions—and insults,” AEI, June 25, 2020, https://www.aei.org/op-­ eds/why-­china-­is-­targeting-­australia-­with-­sanctions-­and-­insults/. 13. Shannon Tiezzi, “Do the Anchorage Talks Represent a New Normal for US-China Relations?” The Diplomat, March 19, 2021, https://thediplomat.com/2021/03/do-­the-­anchorage-­talks-­r epresent-­a-­new-­normal­for-­us-­china-­relations/. 14. See “Other developing nations can adopt China's growth model: President Xi Jinping,” The Economic Times, October 18, 2017, https://economictimes. indiatimes.com/news/international/world-­n ews/other-­d eveloping-­ nations-­c an-­a dopt-­c hinas-­g rowth-­m odel-­p resident-­x i-­j inping/ articleshow/61134034.cms?utm_source=contentofinterest&utm_ medium=text&utm_campaign=cppst 15. David Mahon, “Opinion: China in the New Multipolar World,” Caixin, April 19, 2019, https://www.caixinglobal.com/2019-­04-­19/opinion-­ china-­in-­the-­new-­multipolar-­world-­101406388.html.

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16. “Xi Jinping’s Fiery, Populist Speech,” World Affairs, July 2, 2021, https:// worldaffairs.blog/2021/07/02/xi-­jinpings-­fiery-­populist-­speech/. 17. Katherine Fung, “China Is Suppressing Research on COVID Origins on Xi Jinping’s Orders, Documents Show,” Newsweek, December 30, 2020, https://www.newsweek.com/china-­suppressing-­research-­covid-­origins-­ xi-­jinpings-­orders-­documents-­show-­1558068. 18. See, for example, “China and ECLAC Strengthen their Cooperation to Foster Trade and Investment with Latin America and the Caribbean,” Economic Commission on Latin America and the Caribbean, November 9, 2017, https://www.cepal.org/en/news/china-­and-­eclac-­strengthen-­ their-­cooperation-­foster-­trade-­and-­investment-­latin-­america-­and. 19. See Zhang Yong, “Analysis of the Cooperation Patterns of China and Latin America in the Response to the International Financial Crisis,” Xu Shicheng. “Analysis of Chinese Scholars on Latin American Left-Wing Government’s Policies,” in China-Latin America Relations: Review and Analysis (Volume 1), He Shuangrong, Ed. (Beijing: Paths International, Ltd., 2011), p. 81. 20. “CHINA-CELAC JOINT ACTION PLAN FOR COOPERATION IN KEY AREAS (2022-2024),” Ministry of Foreign Affairs of the People’s Republic of China, December 7, 2021, https://www.fmprc. gov.cn/mfa_eng/wjb_663304/zzjg_663340/ldmzs_664952/ xwlb_664954/202112/t20211207_10463459.html. 21. “Who we are,” Asia Infrastructure Investment Bank, official website, Accessed October 2, 2021, https://www.aiib.org/en/about-­aiib/ index.html. 22. Daniel Mendez Moran, El plan de China en America Latina (2018), pp. 208–215. 23. Alon Levkowitz, “Will RCEP Change the Game in Asia?”, Begin-Sadat Center for Strategic Studies, Paper No. 1, 857, December 27, 2020, https://besacenter.org/perspectives-­papers/asia-­rcep-­free-­trade/. 24. Stuart Lau, “All EU member states back China investment deal, sources say,” South China Morning Post, December 28, 2020, https://www.scmp. com/news/china/diplomacy/article/3115588/all-­eu-­member-­states-­ back-­c hina-­i nvestment-­d eal-­s ources-­s ay?utm_medium=email&utm_ source=mailchimp&utm_campaign=enlz-­b reaking_news&utm_ content=20201228&tpcc=enlz-­breaking_news&MCUID=d31969439b &MCCampaignID=604299dce5&MCAccountID=3775521f5 f542047246d9c827&tc=2. 25. “China officially applies to join CPTPP trade pact,” Nikkei Asia, September 16, 2021, https://asia.nikkei.com/Economy/Trade/China-­officially-­ applies-­to-­join-­CPTPP-­trade-­pact#:~:text=BEIJING%20%2D%2D%20 China%20has%20formally%20moved%20to%20join,Trans-­P acific%20

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Partnership%20%28CPTPP%29%2C%20formerly%20called%20the%20 Trans-­Pacific%20Partnership. 26. Shannon Tiezzi, “A Boycott of the 2022 Beijing Olympics Would Work,” The Diplomat, October 7, 2020, https://thediplomat. com/2020/10/a-­b oycott-­o f-­t he-­2 022-­b eijing-­o lympics-­w ould-­ work/#:~:text=Beijing%20leveraged%20the%202008%20Games%20 to%20showcase%20itself,shoring%20up%20its%20legitimacy%20at%20 home%20and%20abroad. 27. Jill Disis, “China is rehearsing for when it overtakes America,” CNN, January 26, 2021, https://www.cnn.com/2021/01/26/economy/ china-­xi-­economy-­intl-­hnk/index.html. 28. Dion Rabouin, Bethany Allen-Ebrahimian, “China's political power grows with its capital markets,” Axios, February 16, 2021, https://www.axios.com/ c h i n a s -­c a p i t a l -­m a r k e t s -­p o l i t i c a l -­p o w e r -­8 a e b a 2 0 6 -­0 2 a 5 -­4 8 9 3 -­ bd47-­16099f1eb5e0.html. 29. “IMF Survey: Chinese Renminbi to Be Included in IMF’s Special Drawing Right Basket,” International Monetary Fund, December 1, 2015, https:// www.imf.org/en/News/Articles/2015/09/28/04/53/sonew120115a 30. “Chinese stock market tops US$10 trillion,” The Straits Times, October 14, 2020, https://www.straitstimes.com/business/companies-­markets/ chinese-­stock-­market-­tops-­us10-­trillion. 31. “Military and Security Developments Involving the People’s Republic of China, 2020,” 2020. 32. See, for example, Doshi, 2021. 33. “China’s Military Strategy (full text),” State Council, People’s Republic of China, Official Website, May 27, 2015, http://english.www.gov.cn/ archive/white_.paper/2015/05/27/content_281475115610833.htm. 34. “Full Text: China’s National Defense in the New Era,” 2019. 35. See, for example, John S.  Van Oudenaren, “2020 People’s Liberation Army Conference Enabling a More Externally Focused and Operational PLA,” National Bureau for Asian Research, official website, Accessed October 2, 2021, https://www.nbr.org/ event/2020-­peoples-­liberation-­army-­conference/. 36. James C. Bussert, “China's Fleet Joins the World's Navies Off Somalia,” Signal Magazine, October 2010, https://www.afcea.org/ content/?q=chinas-­fleet-­joins-­worlds-­navies-­somalia. 37. “Chinese peacekeepers in Sudan’s Darfur awarded UN peace medals,” Ministry of Defense of the People’s Republic of China, October 3, 2010, http://eng.mod.gov.cn/news/2020-­10/03/content_4872216.htm. 38. Damon and Swails, 2019.

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39. See “Transcript: NPR’s Full Conversation with CIA Director William Burns,” NPR, July 22, 2021, https://www.npr. org/2021/07/22/1017900583/transcript-­n prs-­f ullconversation-­ with-­cia-­director-­william-­burns. 40. For an official PRC statement on the importance it ascribes to achieving secure access to sources of supply for foodstuffs and raw materials needed for its economy, see Orange Wang, “Xi Jinping says China must be ‘self-­sufficient’ in energy, food and minerals amid global challenges,” South China Morning Post, December 13, 2021, https://www. scmp.com/economy/china-­economy/article/3159522/xi-­jinping-­says-­ china-­must-­be-­self-­sufficient-­energy-­food-­and?utm_source=email&utm_ medium=share_widget&utm_campaign=3159522. 41. Yanran Xu, China’s Strategic Partnerships in Latin America: Case Studies of China’s Oil Diplomacy in Argentina, Brazil, Mexico, and Venezuela, 1991–2015 (Lanham, Maryland: Lexington Books, 2018). 42. Wy Cheng, “The Hidden Benefits of China’s Counterfeiting Habit,” The Diplomat, July 8, 2016, https://thediplomat.com/2016/07/ the-­hidden-­benefits-­of-­chinas-­counterfeiting-­habit/. 43. Asit K. Biswas and Cecilia Tortajada, “China's soft power is on the rise,” China Daily, February 23, 2018, http://www.chinadaily.com. cn/a/201802/23/WS5a8f59a9a3106e7dcc13d7b8.html. 44. Andrei Serbin and Luiza Duarte, “China in Latin America: Influential But Not Liked,” AULA Blog, September 17, 2021, https://aulablog. net/2021/09/17/china-­in-­latin-­america-­influential-­but-­not-­liked/. 45. See, for example, “Come Together: The confidence power of Chinese culture renaissance,” CGTN, May 24, 2020, https://news.cgtn.com/ news/2020-­05-­24/Come-­Together-­The-­confidence-­power-­of-­Chinese-­ culture-­renaissance-­QJBuJRqdRm/index.html. 46. Amy Zhao, “Examining China’s Soft Power and Cultural Influence,” China-US focus, Apr 6, 2018, https://www.chinausfocus.com/society-­ culture/examining-­chinas-­soft-­power-­and-­cultural-­influence. 47. Sha Hua, “China Falls Behind U.S. in Global Image, Survey Data Shows,” The Wall Street Journal, June 30, 2021, https://www.wsj.com/articles/ china-­falls-­behind-­u-­s-­in-­global-­image-­survey-­data-­shows-­11625061602. 48. Hal Brands and Michael Beckley, “China Is a Declining Power—and That’s the Problem,” Foreign Affairs, September 24, 2021, https://foreignpolicy.com/2021/09/24/china-­great-­power-­united-­states/. 49. Graham Allison, Kevin Klyman, Karina Barbesino, and Hugo Ye, The Great Tech Rivalry: China vs the U.S., Harvard University, December 2021, https://www.belfercenter.org/publication/great-­r ivalr y-­c hina­vs-­us-­21st-­century.

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50. Joshua Goodman, “Chinese loans to Latin America plunge as virus strains ties,” AP News, February 22, 2021, https://apnews.com/article/ business-­global-­trade-­coronavirus-­pandemic-­asia-­china-­bc3c896d89842f 8a50a601963899af57. 51. R. Evan Ellis, “China’s Advance in Panama: An Update,” Global Americans, April 14, 2021, https://theglobalamericans.org/2021/04/chinas­advance-­in-­panama-­an-­update/. 52. R. Evan Ellis, “Chinese Engagement with the Dominican Republic – An Update,” Global Americans, May 7, 2021, https://theglobalamericans. o r g / 2 0 2 1 / 0 5 / c h i n e s e -­e n g a g e m e n t -­i n -­t h e -­d o m i n i c a n ­republic-­an-­update/. 53. R. Evan Ellis, “Chinese Engagement in El Salvador: An Update,” Center for Strategic and International Studies, March 22, 2021, https://csis-­ website-­prod.s3.amazonaws.com/s3fs-­public/publication/210322_Ellis_ China_El_Salvador.pdf?ydyD0XuUPUIsxKHDFOces1VOU.kQVJ0j. 54. Marco Aquino, “Peru wants mining companies to help build railway to Pacific coast,” Yahoo.com, August 25, 2021, https://finance.yahoo.com/ news/peru-­wants-­mining-­companies-­help-­162159404.html. 55. Brands and Beckley, Foreign Affairs, 2021. 56. See, for example, I.  Clark, “Bringing Hegemony Back In: The United States and International Order,” International Affairs, 85(1), p. 24. See also G.  J. Ikenberry, Liberal Leviathan: The Origins, Crisis, and Transformation of the American World Order (Princeton, NJ: Princeton University Press, 2011). 57. “Bo Xilai scandal: Timeline,” BBC, November 11, 2013, https://www. bbc.com/news/world-­asia-­china-­17673505. 58. Chen Aizhu, Mei Mei Chu, and Marianna Parraga, “Analysis: Venezuelan oil, masked as Malaysian, rushes into China before fuel tax,” Reuters, June 3, 2021, https://www.reuters.com/business/energy/venezuelan-­oil­masked-­malaysian-­rushes-­into-­china-­before-­fuel-­tax-­2021-­06-­04/. 59. “China announces on-site DiDi cybersecurity investigation,” 2021.

CHAPTER 3

The Development of China’s Relationship with Latin America

Early Ties By contrast to China’s relationship with other parts of the world geographically closer to it, Latin America has been a relative stranger to China. Historians debate whether the treasure fleets of Chinese Admiral Zheng He reached Latin America and the Caribbean.1 Latin America was never a formal part of China’s Silk Road connecting the Middle Kingdom to Europe. Nonetheless, from the sixteenth through nineteenth century, the “Manilla Galleon” trade brought Chinese (and Philippine) porcelain, spices, and other products to Mexico, the Americas, and silver from Mexico and Peru to China.2

The Chinese Diaspora Although the Manilla Galleon trade helped to establish modest Chinese communities in Mexico and Peru as early as the seventeenth century,3 the weakening and ultimate collapse of China’s Manchu dynasty at the end of the nineteenth century and beginning of the twentieth century accelerated the flow of Chinese laborers to the Western Hemisphere. These generally originated in coastal provinces such as Fujian, migrating to established colonial centers in the New World. This migration helped create important Chinese communities in Peru, and to a lesser extent, Mexico Chile, Ecuador, and elsewhere. In a similar fashion, the importation of © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_3

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Chinese indentured laborers to work in the sugar plantations and other agricultural industries of the Caribbean, as well as on the railroads and other infrastructure, to later include the Panama Canal, contributed to the emergence of important, if still relatively small, Cantonese- and Hakka-­ speaking Chinese communities in the Caribbean and Central America, including in Panama. Those Chinese immigrant communities partially integrated with, but also maintained a degree of separation from the societies into which they moved, creating a complex legacy that shapes the relationship between China, Chinese communities, and their host countries to the present day. The formation of Mutual Beneficence societies, and other relatively closed social structures, became a vehicle by which established Chinese immigrants helped and shaped the incorporation of new immigrants into the community. Due to their desire for integration into the new culture, and concerns about negative perceptions from their new communities, many Chinese immigrants abandoned the languages of the provinces from which they came. Subsequent generations lost all or part of the mother tongues. As the nationalist and subsequent communist revolution played out in China in the first half of the twentieth century, Chinese in Latin America and the Caribbean maintained ties to the mainland, and often raised funds to help family and support the cause, or other needs, in their Chinese communities of origin. These networks, in part, became the prototypes for the infrastructures that later evolved into Chinese organized crime groups in the region. Today, those networks concentrate on activities like smuggling people, as well as so-called upstairs businesses such as gambling and associated money laundering. Such Chinese crime groups also involved themselves in the operations of the small Chinese restaurants and shops, helping with credit, supply, and running “protection rackets” for them, among other activities. The contemporary PRC relationship with the overseas ethnic Chinese diaspora has evolved significantly and is complex. During the early years of Communist rule in China, members of its diaspora in Latin America and the Caribbean were regarded by the Chinese Communist Party government as having fled and thus betrayed the fatherland. In more recent years, however, as PRC wealth and global engagement has grown, overseas Chinese in Latin America, as elsewhere, have come to be seen as a resource of the Chinese state supporting its foreign engagement. Correspondingly, the PRC government has reached out to Chinese communities in the

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region to strengthen ties through activities such as “ancestor tourism,” providing subsidized travel and lodging for overseas Chinese in the region who wish to travel back to the mainland to visit the land of their ancestors. Indeed, the attention and resources spent by the PRC government on such “ancestor tourism” highlights how the PRC incorporates all with Chinese ancestry, no matter how distant, into a broad concept of the Chinese “civilization,” and the Chinese people to be courted, and whose interests are of increasing concern to the Chinese state as PRC power grows. In recent decades, PRC-based companies doing business in the region have come to be regarded by some ethnic Chinese as a source of opportunity. For many overseas ethnic Chinese as well, China’s growing wealth and power was a source of pride. On the other hand, the continuing struggle for diplomatic recognition between Taiwan and the PRC in Latin America meant that the organization and loyalties of the Chinese diaspora community continued to be a function of whether the government had relations with the PRC or Taiwan. Switches in relations, such as Panama’s 2017 recognition of the PRC, were followed by outreach efforts from the incoming PRC embassy team to make contact with and reorient the loyalties of the local Chinese community.4

Evolution of the China–Latin America Political Relationship In the first years following the establishment of the Communist Chinese government in 1949, PRC political and economic engagement with Latin America was limited. In the political sphere, the new revolutionary regime of Mao Zedong was focused on the survival of the party-led government, including positioning the PRC vis-à-vis both the United States and China’s communist rival the Soviet Union. Although, in those years, the PRC sought a leading role among developing nations, including the Non-­ Aligned Movement, China’s contacts with and perceptions of Latin American politics, culture, and economies were very limited. Map representations of Latin America in China’s Foreign Ministry during the period, for example, depicted very little detail of Latin America. During the Mao era, the engagement pursued by the PRC with the region was often anti-establishment in nature. Chinese agents, for example, sought to export revolution among the indigenous people of the Andean Highlands, broadcasting messages in  local languages such as Quechua, for example, although to little effect.5

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In the diplomatic arena, no Latin American or Caribbean state recognized the PRC until the new Communist regime in Cuba did so in September 1960. The PRC did not secure a second diplomatic advance for more than a decade, when the Chilean socialist regime of Salvador Allende recognized the PRC in December 1970. The US diplomatic outreach to the PRC in the early 1970s, spearheaded by Secretary of State Henry Kissinger, paved the way for the Communist government to be given China’s seat at the United Nations in November 1971, Richard Nixon’s official visit to the PRC in February 1972, and eventual US recognition of the PRC in January 1979. Such US and international signals paved the way for the majority of Latin American states, particularly in South America, to establish diplomatic relations with the PRC during the 1970s and 1980s. By the 1990s, only a small number of nations in the region continued to recognize the Republic of China (ROC) government on Taiwan rather than the PRC, as the legitimate government of China. These included Paraguay in South America, as well as a cluster of states in Central America and the Caribbean. During the years of struggle for diplomatic recognition between the PRC and Taiwan in the region, a key PRC vehicle for advancing relations was “party-to-party diplomacy” through the International Liaison Department of the Chinese Communist Party, as well as a range of “United Front” activities across the region. These included an important role for “friendship committees,” of influential business and political elites in each country, often working behind the scenes to advocate for a change in their government’s diplomatic posture. “Friendship committees” thus functioned as a kind of “fifth column” in the societies in which they operated.6 In turn, their ties to mainland China positioned them to reap the economic benefits of interacting with China once relations were formally established, including leveraging their business connections there to help others find Chinese factories and partners, and sometimes leading tours of local businessmen to China to make contacts there. China’s very limited, diplomatic engagement with Latin America contrasted with its more active involvement with insurgent groups in wars of National Liberation against colonial governments in Africa, as well as in Asia during the same period.7 China’s diplomatic advance continued through the 1990s, although overall levels of economic and other interaction with the region remained relatively limited. The war for diplomatic recognition proceeded slowly

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across the Caribbean through the early 2000s, with the PRC and Taiwan often struggling to outbid each other offering economic benefits, the construction of stadiums, and clinics.8 Both sides also sometimes provided monetary benefits to key politicians and other elites to advance their cause. The island nation of Saint Lucia,9 as well as Nicaragua,10 changed diplomatic recognition multiple times during this period, as their governments changed. Costa Rica was the last country to switch relations to the PRC during this period, doing so in May 2007. Months later, in January 2008, the Kuomintang (KMT) party was elected in Taiwan, with an orientation more receptive to working with the PRC than the outgoing Democratic People’s Party (DPP). In mid-2008, KMT leader Ma Jing-yeou established an informal “truce” with his PRC counterpart Hu Jintao, putting an end to the struggle for diplomatic recognition between the two, including in Latin America and the Caribbean. The truce held during the two terms of KMT government, until the return to power of the DPP in January 2016, under Tsai Ing-wen. During this time, a number of Latin American governments reportedly approached the PRC regarding their interest in establishing diplomatic relations but were turned down by the PRC, which preferred to honor its truce while pursuing rapprochement with Taiwan.11 With the return of the DPP, the PRC sought to intimidate Taiwan. The leading to a renewed next struggle, beginning first in Africa with switches to the PRC by Gambia,12 followed by São Tome and Principe, then extending to Latin America with diplomatic flips by Panama in 2017, and by the Dominican Republic and subsequently El Salvador in 2018.13

The Expansion of Chinese Trade with Latin America Prior to China’s opening to the world under Deng Xiaoping in 1978, PRC commercial interactions with Latin America were minimal. Although two-way trade grew exponentially during the 1990s, the volume of that trade, relative to the region’s commercial exchange with the United States and other parts of the world, was low. China was often, during that period, only the 10th or 20th largest trading partner for most Latin America and Caribbean nations. China–Latin America trade most notably began to take off following acceptance of the PRC into the WTO in December 2001.14 An important milestone for China’s commercial relationship with Latin America during

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this period that set the stage for its transformation was China’s adoption of the “go out” plan at the 10th Five-Year Congress of the Chinese Communist Party in 2001, as mentioned previously. In Latin America, as elsewhere, the policy signaled the permission and support of the Chinese government for Chinese SOEs and other actors to do what they had long understood they needed to do: expand their commercial ties with and presence in the region, and with the rest of the world. During the period of exponentially growing Chinese trade with the region following PRC acceptance into the WTO, that growth, the increasingly evident possibilities of the Chinese market, and partnering with Chinese firms interested in expanding their presence in Latin America attracted the attention of politicians and businessmen from across the region. That growing attention was highlighted during the November 2004 APEC Leaders’ Summit in Santiago Chile, when the then Chinese President Hu Jintao made headlines through his presentations to the summit, as to the Brazilian Congress, where he talked about the possibility of $100 billion in Chinese trade or investment in the region within a decade.15 For Latin America and the Caribbean, whose receipt of foreign investment from traditional Western sources had hit a low during the previous year, 2003 (as much of that capital ironically moved toward Asia), the Chinese promise was a welcome gesture.16 Despite such growing attention to Chinese engagement in the region, during the years leading up to the 2007–2008 financial crisis, Chinese activities there involved very little presence on the ground by PRC-based companies. Most interactions involved large Chinese SOEs purchasing raw materials in other commodities through established international mechanisms, or reciprocally, large US, European, or Latin American companies acquiring goods from factories in the PRC to import them into the region to sell within their own distribution networks. As a consequence, during this early period, the PRC government had relatively little difficulty in reconciling its assertions, espoused as one of China’s five principles of peaceful coexistence, which the PRC respected and would not interfere in the internal governance of its partners. At that time, there were very few Chinese companies with personnel and operations on the ground in the region, directly affected by the security and other conditions of the region or the decisions of its governments. Despite this situation, multiple dynamics were unfolding behind the scenes between the PRC and the countries of the region that were laying the groundwork for a dramatic expansion of the physical presence of

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Chinese companies there. On one hand, with their increasing recognition of the opportunities involved in the Chinese market and the resources of Chinese companies as partners, Latin American business and government figures were working hard to learn about China, including building ties and even representative offices there. Efforts by Latin American governments included establishing or reorienting trade-promotion organizations, generally tied to Ministries of Commerce, to better promote business with the PRC. Chile’s export promotion organization, ProChile, in this regard, was the first of these, and served as a model for a generation of others, including Costa Rica’s Procomer, Colombia’s Proexport, Brazil’s Apex, and even PROESA, in El Salvador. At the same time, Latin American governments were sending trade and other government delegations to the PRC, signing memorandums of understanding (MOUs) and investment protection agreements, and otherwise working to establish the logistics, financial, legal, and intellectual frameworks to do more business in the PRC. In the process, however, such efforts would ultimately also enable an expanded presence by PRC-based companies in the region.

The Expanding Presence of Chinese Companies on the Ground Even before China’s acceptance into the WTO in 2001, PRC-based companies had made a limited number of pioneering investments in Latin America and the Caribbean. These included the 1992 purchase by the Chinese company Shougang of an iron mine near Marcona Peru,17 the 1993 establishment by CNPC subsidiary Sapet of oil operations in Peru,18 and CNPC entry into Venezuela’s Maracaibo basin in 1997.19 In 2000, the Chinese appliance manufacturer Gree established itself in the Manaus special economic zone, and in 2005, Haier set up operations there. In Colombia, two small Chinese motorcycle manufacturers, Jialing and Jincheng set up modest assembly operations in the country in 1997 and 1998, respectively.20 In 2005, China’s presence in the region made a major leap when a CNPC-led consortium called Andes petroleum acquired Canadian firm EnCana, giving the latter a significant presence in Ecuador’s oil sector. Similarly, in 2006, a Chinese and an Indian oil company teamed up in a joint venture, Omimex, to develop oil fields in the interior of Colombia. Other Chinese investments during this early period, however, including

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those by Shengli and Hunanji in the oil sector of Bolivia,21 or interest in Bridas, with its oil holdings in Argentina, did not prosper. In general, China’s advance in Africa through government-to-­ government negotiations, which yielded it petroleum and oilfields and infrastructure projects financed by PRC-based policy banks, created false expectation among Chinese and others that a similar strategy could be applied in Latin America. Indeed, the previously noted investment promises made by President Hu Jintao during his 2004 trip to South America presumed that what had worked in less strongly institutionalized governments in Africa would also work in Brazil, Argentina, and Chile. Ironically, almost none of the projects contemplated in the 400 agreements made during President Hu’s 2004 trip to the region22 came to fruition. Where the PRC ultimately made the greatest progress, however, was in the smaller countries of the Caribbean and in leftist populist states such as Ecuador, Venezuela, and, to a lesser extent, Bolivia, as discussed in Chap. 7. The 2008 financial crisis created a perfect storm for the expansion of China’s companies on the ground in Latin America.23 The combination of the increased need in the region for export markets and investments; the expanded resources and experience of Chinese companies; the strengthened commercial, financial, and intellectual infrastructure for doing business across the Pacific; and the liquidity crisis of Western investors, all created unique opportunities for PRC-based companies to expand in the region. Meanwhile, the lingering poor economic performance of the region and the temporary fall in commodity prices created many bargains for Chinese companies and investor groups looking to expand their access to resources or markets through acquisitions. This unique combination of conditions set the stage for a significant expansion of China’s presence in the region starting in approximately 2010, through acquisitions and other investments, in a broad range of sectors including mining, petroleum, and even electricity distribution. In the logistics arena, the Chinese firm Hutchison Whampoa expanded its presence in the port sector from the early 2000s. Huawei and ZTE similarly built up a position in the Latin American telecommunications sector from the late 1990s, yet China’s physical presence in the ground in the region did not become notably significant until the mid-2000s. In construction, Chinese companies such as China Harbor, Sinohydro, China Railway Road, and China Metallurgical Engineering Corporation gradually expanded their presence through projects mostly in the Caribbean, but also in politically sympathetic leftist populist states.

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Changes in diplomatic relations to the PRC, both prior to the 2008 diplomatic truce and after its collapse, created special opportunities for the Chinese to advance through infrastructure projects, enabled by the signing of non-transparent MOUs between the PRC and the newly recognizing country, as detailed further in Chap. 6. The expanding presence by PRC-based companies in the post-2010 period created new forms of conflict, as large PRC-based SOEs, relatively new to the region, struggled to reconcile the demands of local governments, laborers, and communities with the policies, preferences, and control impulses of their Chinese headquarters operations; they discovered that the companies’ prior experiences with projects in Africa did not always perfectly translate into the new environment. The result of the new Chinese presence on the ground was thus often conflicts with local governments, communities and laborers, as exemplified by the large number of strikes besetting the operations of the Chinese firm Shougang in Marcona, Peru,24 the takeover by protesters of oilfields in Tarapoa and Orellana Ecuador in 2006–2007,25 or the multiple difficulties Chinese road and hydroelectric projects in Bolivia with local workers and communities.26 That same presence, however, also created opportunities for accelerated learning. Through experience on the ground, those same Chinese companies gradually becoming more adept at integrating local workers, technical personnel, and customer representatives, and acting effectively as local companies. They gradually began making smarter decisions about the employment of local partners and consultants. The electric infrastructure State Grid, for example, as it expanded in Brazil, began to develop its own training programs for preparing its managerial and technical personnel, in order to help them to operate effectively in the Latin American environment. With such adaptations, Chinese companies began to attain levels of influence which approximated their growing economic weight. In addition to the growing presence and influence of Chinese companies on the ground across the region, the first decade of the 2000s paved the way for the PRC’s new relationship with populist countries. Venezuela was the first leftist populist government in the region to significantly expand economic relations with the PRC, followed by Ecuador under Rafael Correa, then later Bolivia under Evo Morales and Argentina under Christina Fernandez. In the case of Venezuela, the expansion initially came in the form of a series of loans from China Development Bank. The relationship reflected a confluence of need and opportunity. Then President

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Hugo Chavez needed the funds and an alternative market for Venezuela’s oil as Western investors pulled out of the country in response to his increasingly anti-free market policies. On the other hand, in China, then head of China Development Bank Chen Yuan was sitting on significant amounts of funds looking for a profitable destination, and the Chinese Ministry of Commerce had recognized the PRC as a “Strategic Partner,” suggesting to the PRC credit underwriting organization Sinosure that Venezuela was a politically acceptable destination for commercial engagement. One of the most important innovations of Chinese engagement with Venezuela was linking the products and infrastructure work of PRC-based companies, funded by Chinese banks, to repayment through Chinese companies extracting oil from the recipient countries (the famous “loans-­ for-­ oil” contracts). The Chinese had first employed such contracts in African countries such as Angola and Mozambique but took them to a new level through their application in multiple, large deals over time in Venezuela. The first Venezuelan Heavy Investment Fund, established in November 2007,27 included the infusion of $4 billion of credit from the PRC. The fund was designed to be used as a line of credit for paying Chinese companies doing work in or providing products to Venezuela. The arrangement involved an account by the Venezuelan government in a Chinese bank. When Chinese companies in Venezuela performed work for the Venezuelan government, those companies were directly paid by the Chinese bank Yuan for work performed against Venezuela’s line of credit. At the same time, through a second set of contracts, a consortium between the Venezuelan national oil company PDVSA and its Chinese counterpart extracted petroleum from Venezuelan oilfields. When the Chinese took delivery of that oil at a Venezuelan port, money corresponding to the market price for the oil delivered, less commission fee, was credited to Venezuela’s account in the Chinese bank to pay down its line of credit. For the PRC, part of the attractiveness of this arrangement was that the money loaned to Venezuela never really left China, the Chinese companies were assured of being paid for their work done, and Chinese oil companies were effectively pumping the oil out of the ground in Venezuela that they used to repay themselves. It was very difficult for Venezuela under this arrangement not to repay its debt, even while the Maduro regime was defaulting on virtually all of its other creditors and bonds. Its only options would be to get the Chinese to agree to allow it to cease payments for a

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while (which it ultimately did in 2020), or physically intervene in its own oilfields to stop the Chinese from pumping the oil out. The first Venezuelan loans-for-oil contract was publicly discussed in 2004, although the first funds were not released until 2008. Multiple, tranches of the Heavy Investment Fund were ultimately created, with slightly different terms, as well as the Long Term, Broad Reach fund. Together, from 2008 until disbursements largely stopped in 2016, the Chinese provided a total of more than $62 billion to Venezuela.28 In theory, the money was used for infrastructure products such as thermoelectric facilities, work on the Guri Dam hydroelectric facility, rail infrastructure, and later, the construction of telephone and auto factories that were never fully employed, and consumer appliances sold at discount to the group of poor Venezuelans who were the populist government’s core support base. In reality, many of the projects were only partially completed or the facilities built with Chinese money were never fully able to function. Nonetheless, Venezuela’s populist regime, for its part, was obliged over time to repay almost all of the Chinese money, even though the country was left with almost nothing enduring to show for the spending. China’s expanding presence in Ecuador under leftist populist Rafael Correa paralleled that of Venezuela, but with important differences. Ecuador under Correa borrowed at least $17.4 billion from Chinese banks.29 It spent the money on infrastructure projects, repaying the loans through parallel contracts for the delivery of Ecuadoran oil. The Correa government did a better job in realizing some value for the country from the Chinese loans. It built six hydroelectric facilities with the money, although virtually all had significant problems or were not completed. Chinese firms in Ecuador also were used to build roads, wind farms, and other infrastructure, as discussed in greater detail in Chap. 5. By contrast to Venezuela and Ecuador, Bolivia lagged behind the other two in expanding loan-based projects with the PRC.  Although it never created a commodities-based loan fund like Ecuador and Venezuela did, it contracted a substantial number of road and other loan-funded infrastructure projects to the Chinese. By 2016, the Bolivian government of Evo Morales had created a $10 billion line of credit,30 with three hydroelectric projects in the works, the construction of countless roads, as well as factories, mining facilities, and other activities. Nonetheless, numerous Chinese projects were delayed by strikes, community protests, and other forms of resistance.

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A More Realistic Attitude Toward China The combination of China’s slowing GDP growth in 2014, and the fall of international commodities prices, coincided with the progress that both Latin American and Chinese firms had made in working with each other since Chinese presence began taking off in approximately 2010.31 Although it is difficult to establish a precise time or event, toward the end of the decade, a more nuanced, realistic attitude was manifesting itself among government and business persons on both the Latin American and Chinese sides. In general, this evolution reflected a “maturation” of the relationship from the bifurcated reaction to China’s initial expansion in the region. During the earlier period, particularly before China’s growth began to slow, Latin American businesspersons, academics, and politicians often viewed Chinese engagement in simplistic terms, either positive or negative. Some saw the Chinese expansion through the lens of hope for economic opportunity, personal profit, or liberation from dependence on the West. There were often unrealistic expectations regarding the degree to which Chinese projects would actually occur, and how they would rescue the region or enrich China’s local partners. On the other hand, others viewed China’s advance in the region through an equally unrealistic lens of danger and threat, fearing that it would displace their businesses, or political liberties. Those seeking to resist engagement and projects used a sometimes-racist discourse that combined references to everything from supposed Chinese employment of slave labor, to inherent corruption, to an imputed Chinese penchant for eating dogs. The maturation of the discourse about the PRC on the Latin American side included the evolution of more complex understandings, viewing the Chinese as unique partners, who could provide certain benefits over Western ones, but with corresponding risks and limitations. Some in the region, for example, recognized that the Chinese could sometimes provide significant resources relatively quickly, without some of the conditions imposed by Western policy banks, such as regarding the transparency of the transaction, or the Latin American partner’s fiscal and institutional practices. On the other hand, there was also a growing recognition that working with the Chinese posed particular challenges not as common in other partners, including sometimes predatory business practices, problems with product and service quality if the details of what was desired were not carefully specified, a higher disposition to corrupt practices in the absence

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of oversight, and types of conditionality alternative to those seen with Western firms and governments, including cross-default clauses and other abusive contractual details.32 Chinese firms more than their Western counterparts also often displayed a strong preference to use Chinese subcontractors known to them, as well as Chinese labor and equipment where possible. Although reliable data on Chinese real investments in Latin America is hard to come by, the best estimates are that by 2019, in the two decades following the PRC’s acceptance into the WTO in 2001, Chinese entities had invested over $160 billion in the region,33 of which all but $16 billion arrived after 2010.34 In addition, the PRC also lent approximately $136 billion through its two major policy banks, China Development Bank and China Export-Import Bank,35 not counting other loans channeled through Chinese investment partners by Chinese commercial banks such as China Construction Bank and Industrial and Commercial Bank of China (ICBC). On the trade front, by 2019, just before the Covid-19 pandemic hit, China–Latin America bilateral trade had reached $330 billion.36 While in some parts of Latin America, the US bilateral trade volume exceeded that of China, the most impactful aspect of trade with China driving for the region’s politicians and businesspersons was their expectations of the future, rather than the current reality. In that regard, it is important that, absent a significant change in direction of the Chinese economy, a substantial number expect China to surpass the United States as Latin America’s overall largest trading partner in the coming years.37

Patterns of Chinese Engagement As suggested in earlier sections, the sophistication, style, and engagement approach by Chinese companies in Latin America and the Caribbean differs significantly as a function of company type, economic sector, and other characteristics. Chinese national-level SOEs have had traditionally more resources for engaging in the region, although some have been more sophisticated than others. Similarly, large, technically privately owned entities like the construction equipment manufacturer Sany have brought significant resources, knowledge, and agility in operating in the region. The form of the PRC advance has generally varied across sectors. In extractive industries such as petroleum and mining, as well as in electricity generation and transmission, Chinese firms have often made significant advances by purchasing companies with existing holdings in the region,

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then injecting capital and using the newly acquired company as a base to expand their position in the region and bring in trusted Chinese subcontractors. In other areas, such as agrologistics, Chinese firms have similarly leveraged acquisitions. A primary example was the purchase of Noble and Nidera by China National Cereals, Oils and Foodstuffs Co. (COFCO), beginning in 2014. Even where the Chinese have used mergers and acquisitions as a tool to expand their presence, they have not always immediately acquired control of companies of interest. In many cases, they have initially acquired a minority share, and used the position to learn and have a seat at the table with respect to the company’s decisions, approach to operations in the local environment, and technical data regarding the resources it controls. Significant examples include Sinochem’s 2012 acquisition of a 10% interest in Perenco in the petroleum sector,38 Sinopec’s acquisition of a 30% stake in the Brazilian energy company Galp,39 and the CITIC-led consortium’s 2011 acquisition of a 15% stake in the rare-earth element focused mining firm CBMM.40 More recently, China Communications Construction Corporation’s acquired a 30% stake in the Portuguese firm Mota-Engil.41 In some, but not all, cases, the Chinese have subsequently leveraged their position as preferred stockholder to acquire the rest of the company when the time was right. Examples include the transition from a minority stake to complete control of the Bacanora lithium operations in Mexico’s Sonora desert,42 as well as COFCO’s complete acquisition of Noble in 2016,43 as well as State Grid’s acquisition of CPFL in the energy sector.44 With respect to differences between Chinese firm behavior across sectors, PRC-based entities in the telecommunications sector, and to a degree, vehicle and other product manufacturers, have expanded in a more incremental fashion than have firms in commodity sectors such as mining and petroleum. This more gradual advance has helped companies in those sectors to more easily integrate Chinese managers and local customer service and technical personnel with local staffs. The sophistication of Huawei, with two decades of expansion in the region, in managing local staff and community relations is a prime example. Such sophistication is evidenced by actions such as its sponsorship of local Latin American soccer teams in the countries in which it operates.45 In a similar fashion, Chinese companies in the automotive industry have benefited from ongoing working relationships with local distributors, which have helped them to integrate into local economies.

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In sectors such as mining and petroleum, where Chinese companies have rapidly acquired significant operations, and then been forced to manage community and government relations, and local labor forces under difficult circumstances, problems have cropped up regularly, although some Chinese companies have performed better than others with their new acquisition. On one hand, for example, China Aluminum Corporation, which acquired the massive Toromocho mine in Peru, was relatively successful in working with local partners and consultants, to manage the difficult challenges associated with preparing and opening the mine site.46 Perhaps most impressive was their securing of agreements to relocate a community of approximately 5000 people from the town of Morococha, inconveniently located on top of the site to be mined, to a completely new city some distance away.47 By contrast, China Minmetals, which spent $5.8 billion to acquire the massive Las Bambas mine, also in Peru, has had significant, recurring difficulties with the local population on issues from labor to pollution48 to water rights.49 It is important to note that Chinese activities even in commodities and foodstuffs commonly include a technology component. Its global petroleum operations, for example, involve deep water oil exploration technologies. Its agricultural operations involve access to technologies such as genetic seeds. A common if uneven attribute of China’s advancing presence has been sustained learning by its companies on the ground through a combination of training and local engagement. Such learning opportunities have often also included informal collaboration networks between Chinese managers and technicians from different companies doing business in the same country or city. As Chinese companies have operated for an extended time in Latin America and the Caribbean, both the sophistication of their products and their means of doing business in the local markets have evolved. With respect to the product, in Latin America, as elsewhere, PRC-based companies have generally moved up the value chain from supplying relatively low-quality goods, competing on a price basis to advance their position in the region, to selling increasingly more sophisticated, higher value-added goods, such as motorcycles, cars, and cell phones, eventually establishing final assembly, and later more integrated production operations in Latin America itself., involving both Chinese and local suppliers.

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Notes 1. Gavin Menzies, 1421: The Year China Discovered America (City, Publisher, 2008). 2. Peter Gordon and Juan José Morales, “Long View: The 16thCentury Trade Route That Brought China to Mexico,” America’s Quarterly, April 15, 2019, https://www.americasquarterly.org/article/ long-­view-­the-­16th-­century-­trade-­route-­that-­brought-­china-­to-­mexico/. 3. Gordon and Morales, 2019. 4. See, for example, Ellis, “The evolution of Panama-PRC relations,” 2018. 5. R.  Evan Ellis, “Chinese Engagement with Bolivia—Resources, Business Opportunities, and Strategic Location,” Air & Space Power Journal en Español, 2nd Semester 2016, http://www.airpower.au.af.mil/apjinternational/apj-­s/2016/2016-­2/2016_2_03_ellis_s_eng.pdf. pp. 3–19. 6. See “The Big Question: Understanding China’s Soft Power,” National Endowment for Democracy, June 2017, https://www.ned.org/wp-­ content/uploads/2017/06/Understanding-­Chinas-­Sharp-­Power.pdf. 7. See Steven F. Jackson, “China’s Third World Foreign Policy: The Case of Angola and Mozambique, 1961–93,” The China Quarterly, No. 142 (Jun., 1995), pp. 388–422. 8. Rachael Will, “China’s Stadium Diplomacy,” World Policy, June 6, 2012, http://worldpolicy.org/2012/06/06/chinas-­stadium-­diplomacy/. 9. “China irked by St. Lucia’s new ties with Taiwan,” NBC News, May 1, 2007, https://www.nbcnews.com/id/wbna18425879. 10. Lawrence Chung, “Will Nicaragua be next to break ties with Taiwan?” South China Morning Post, January 8, 2017, https://www.scmp.com/ news/china/policies-­politics/article/2060218/will-­nicaragua-­be-­next­break-­ties-­taiwan. 11. R. Evan Ellis, “The PRC Advance in Central America in the Context of Covid-19,” Taiwan’s Relations with Latin America: A Strategic Rivalry between the United States, China and Taiwan, He Li and Antonio Hsiang, Eds. (Lanham, MD: Lexington Books, 2021). 12. Shannon Tiezzi, “Did China Just Break Its ‘Diplomatic Truce’ With Taiwan?” The Diplomat, March 17, 2016, https://thediplomat. com/2016/03/did-­china-­just-­break-­its-­diplomatic-­truce-­with-­taiwan/. 13. Ellis, “Taiwan’s Struggle for Partners and Survival,” 2018. 14. See Edgar Viera Posada, “La política comercial de la Republica Popular China y su Impacto en las Relaciones con Colombia,” in La transformación de China y su impacto para Colombia, Edgar Viera Posada, Ed. Bogota, Colombia: Grupo de Investigación y Gestion Empresarial, 2013), pp. 177–216.

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15. Alvaro Vargas Llosa, “China’s Latin American Motives,” The Globalist, November 4, 2005, https://www.theglobalist.com/ chinas-­latin-­american-­motives/. 16. For a more detailed discussion, see also Ellis, 2014. 17. Nathaniel C. Nash, “Peruvian State Iron Company Finds a ‘Private’ Buyer: China,” The New York Times, December 31, 1992, https://www.nytimes. com/1992/12/31/business/peruvian-­s tate-­i ron-­c ompany-­f inds-­a -­ private-­buyer-­china.html. 18. “Who We Are,” CNPC official website, Accessed August 30, 2021, https://www.cnpc.com.pe/Quienes%20Somos/Pages/Historia-­en.aspx? ord=1&lang=en&mord=1. 19. “Sincor heavy oil project on stream in Venezuela,” Oil and Gas Journal, December 20th, 2000, https://www.ogj.com/pipelines-­transportation/ article/17253287/sincor-­heavy-­oil-­project-­on-­stream-­in-­venezuela. 20. See Ellis, 2014. 21. Ellis, “Chinese Engagement with Bolivia,” 2016. 22. “China’s Influence in the Western Hemisphere,” Hearing Before the Subcommittee on the Western Hemisphere of the Committee on International Relations, House of Representatives, One Hundred Ninth Congress, First Session, Serial No. 109–63, April 6, 2005, http://commdocs.house.gov/committees/intlrel/hfa20404.000/ hfa20404_0.HTM. 23. See Lu Guozheng, “Post-Financial Crisis Trade Relations: A New Phase of China-Latin American Cooperation,” in China-Latin America Relations: Review and Analysis (Volume 1), He Shuangrong, Ed. (Beijing: Paths International, Ltd., 2011), pp. 57–71. 24. “Violent protests underline challenges for China-Peru mining cooperation,” Dialogo Chino, June 9, 2015, https://dialogochino.net/en/ extractive-­i ndustries/2558-­v iolent-­p rotests-­u nderline-­c hallenges-­f or-­ china-­peru-­mining-­cooperation/. 25. See, for example, R.  Evan Ellis, “El impacto de China en Ecuador y América Latina,” Relaciones Internacionales: Los Nuevos Horizontes, Ed. Grace Jaramillo (Quito, Ecuador: FLACSO, 2009), pp. 101–122. 26. Ellis, “Chinese Engagement with Bolivia,” 2016. 27. “China-Venezuela Joint Fund Tranche A [Linked to #58677,#37838, #38380],” AIDData, Accessed October 4, 2017, https://china.aiddata. org/projects/35985/?iframe=y. 28. “China-Latin America Finance Database,” 2021. 29. “China-Latin America Finance Database,” 2021. 30. “Chinese FDI in Bolivia: Help or Hindrance to National Development?” Council on Hemispheric Affairs, August 31, 2017, https://www.coha. org/chinese-­fdi-­in-­bolivia-­help-­or-­hindrance-­to-­national-­development/.

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31. See David B. H. Denoon, “China’s Arrival in Latin America,” in China, The United States, and the Future of Latin America: U.S.-China Relations, Volume III, David B. H. Denoon, ed. (New York: NYU Press, 2017). 32. Gelpern, et al., 2021. 33. Enrique Dussel Peters, “Monitor of Chinese OFDI in Latin America and the Caribbean 2021,” Red China-ALC, March 31, 2021, https://www. redalcchina.org/monitor/images/pdfs/menuprincipal/DusselPeters_ MonitorOFDI_2021_Eng.pdf 34. Dussel Peters, 2021. See also Rolando Avendano, Angel Melguizo, and Sean Miner, “Chinese FDI in Latin America: New Trends with Global Implications,” Atlantic Council, June 2017, https://publications.atlanticcouncil.org/china-­fdi-­latinamerica/AC_CHINA_FDI.pdf. 35. “China-Latin America Finance Database,” 2021. 36. “Direction of Trade Statistics,” International Monetary Fund, accessed August 31, 2021, https://data.imf.org/regular.aspx?key=61013712. 37. Felipe Larraín and Pepe Zhang, “How Latin America Can Navigate the China-US Trade Wars,” Americas Quarterly, September 8, 2021, https:// americasquarterly.org/article/how-­l atin-­a merica-­c an-­n avigate-­t he-­ china-­us-­trade-­wars/. 38. Jeff Fick, “Perenco’s Brazil Unit to Sell 10% Stake in Offshore Blocks to Sinochem,” The Wall Street Journal, January 8, 2012, https://www.wsj. com/articles/SB10001424052970204257504577148443070091790. 39. Wayne Ma, “Sinopec in Brazil Deal,” The Wall Street Journal, November 12, 2011, “https://www.wsj.com/articles/ SB10001424052970204358004577031003277540834. 40. “Chinese consortium acquires 15% of world’s largest niobium producer in Brazil,” Mercopress, September 6, 2011, https://en.mercopress. com/2011/09/06/chinese-­consortium-­acquires-­15-­of-­world-­s-­largest-­ niobium-­producer-­in-­brazil. 41. “CHINA’S CCCC BUYS STAKE IN PORTUGAL’S MOTA-ENGIL,” Macau Daily Times, August 28, 2020, https://macaudailytimes.com.mo/ chinas-­cccc-­buys-­stake-­in-­portugals-­mota-­engil.html. 42. Cecilia Jamasmie, “Bacanora Lithium accepts Ganfeng’s $391 million takeover offer,” Mining.com, August 27, 2021, https://www.mining. com/bacanora-­lithium-­accepts-­ganfengs-­391-­million-­takeover-­offer/. 43. “COFCO acquires remaining shares,” COFCO, official website, September 23, 2016, https://www.cofcointernational.com/newsroom/ cofco-­acquires-­remaining-­shares/. 44. “Brazil power firm CPFL sees Chinese investment boosting expansion,” Yahoo Finance, January 24, 2017, https://finance.yahoo.com/news/ brazil-­power-­firm-­cpfl-­sees-­153351804.html.

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45. “Fútbol: Colombiano Santa Fe anuncia firma china Huawei como principal patrocinador,” Xinhua, January 5, 2015, http://www.spanish.xinhuanet.com/chinaiber/2015-­01/05/c_133897637.htm. 46. See Gervase Poulden, “Morococha: the Peruvian town the Chinese relocated,” Dialogo Chino, April 15, 2013, https://chinadialogue.net/en/ business/5898-­morococha-­the-­peruvian-­town-­the-­chinese-­relocated/. 47. Daniel Mendez Moran, El plan de China en America Latina (2018), pp. 87–90. 48. Esteban Salazar, Elizabeth Prado, and Zaida Tecsi, “Peligra producción cuprífera de Las Bambas debido a bloqueos,” La Republica, December 4, 2021, https://larepublica.pe/economia/2021/12/04/mmg-­las-­ bambas-­peligra-­produccion-­cuprifera-­debido-­a-­bloqueos-­chumbivilcas-­ minem-­pedro-­castillo/. 49. “China’s MMG says protests to affect Las Bambas copper operations,” Reuters, October 9, 2019, https://www.reuters.com/article/ us-­peru-­copper-­mmg-­ltd-­idUSKBN1WP07T.

CHAPTER 4

China’s Economic Struggle for Position in Latin America

Overview As noted in Chap. 2, the PRC advances in Latin America and the Caribbean, through its government and state-owned enterprises in other companies, are a subset of its global advance. The specifics of China’s activities and approach in Latin America and the Caribbean reflect the particular economic opportunities, political structures and orientations, geographies, and other characteristics of the region, as well as the legacy of China’s relatively weak relationship with it compared to other parts of the world. Related considerations include China’s sensitivity over the proximity of Mexico, Central America, and the Caribbean to the United States, as well as the relative distance of the region from the PRC. Similarly, the details of China’s approach to the region are conditioned by the limited political ties it has had with the region in the contemporary era, by contrast to its interactions with Asian partners, or its collaboration with African national liberation movements, as noted previously. Consistent with the framework advanced in Chap. 2, China’s pursuit of its economic goals may be understood in terms of three overlapping areas: (1) activities to acquire secure access to and value added from the region’s resources and foodstuffs; (2) those focused on obtaining secure access to markets for Chinese goods and services, particularly in high value-added strategic sectors; and (3) activities focused on dominating the transportation, electrical, digital, financial, and other infrastructures that connect the © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_4

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region, in support of advancing PRC goals for secure access and value added in the two other previously mentioned domains. As also discussed in Chap. 2, in Latin America, as in other parts of the world, Chinese activities with respect to institutions, political relationships, and in the security sector (examined in detail in Chap. 9) can be understood as driven by the imperatives of these economic-oriented pursuits, including responding to the consequences anticipated by them. As depicted in the diagram in Fig. 4.1, China’s economically focused activities in the domains of securing access to commodities and foodstuffs, markets, and connectivity, including the influence from Chinese commercial activities, loans, investment, and presence in the region, may be understood as collectively producing influence for the PRC. By contrast to the Soviet Union during the Cold War, however, the PRC does not seek to use this influence in Latin America and the Caribbean to further advance a political model or group of alliances. Rather, its primary objective is to use this influence to further its economic advance and capture of value-­ added in other countries and sectors impacted or complemented by that presence.

Fig. 4.1  The relationship between China’s pursuit of resources, markets, connectivity, and other goals

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Pursuit of Secure Access to Resources and Associated Value Added PRC activities in the commodity and agricultural sectors in Latin America and the Caribbean can be understood as an effort by China, principally through its state-owned enterprises,1 but also other companies, to obtain access to materials required as inputs to the Chinese economy,2 including supporting ongoing industrial processes, capital formation, urbanization, as well as the strategically vital task of ensuring enough food for the Chinese people.3 The approach reflects, in part, a particularly Chinese belief about the importance of ownership and control, as a mechanism more reliable than the market, to ensure secure access. In light of the continuing and growing need for such factor inputs, the Chinese have sought control over the mines, oilfields, land, and other necessary elements of resource extraction. Often this has involved buying the companies with rights to the asset, and increasingly, winning the concession and developing the asset themselves. Indeed, in 2011, an analysis by Chinese scholar Zhao Xuemei recognized that Chinese activities in the extractive sector comprised a very significant part of all Chinese investment in Latin America at that time.4 In all such cases, ownership promises the Chinese not only desired security of supply but also realizing for themselves the value added from the extraction activity. Chinese acquisition of the companies, operations, and technologies involved in securely extracting Latin America’s resources has occurred increasingly across multiple sectors in the region. These include, but are not limited, to petroleum, mining, agriculture timber, and fishing. As noted previously, China’s transition from purchasing the needed commodities through established international entities, to building China’s own position in the region to obtain them, has both created opportunities for learning, as well as conflict, as Chinese companies in the sector have interacted with local labor forces, communities’ governments, and challenges flowing from the often insecure conditions in remote areas of the region. Petroleum Chinese companies have progressively built up a significant position in the petroleum sector across Latin America since the late 1990s, and have become increasingly sophisticated in their operations and associated

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technologies, although in very few cases are Chinese petroleum companies the dominant player in a particular country. As noted in the previous chapter, the CNPC subsidiary Sapet won operations in the Talara oil fields in Peru in 1993.5 Its initiation of operations in Talara Block 7 in 1994, and Block 6 in 1995 represented the “international debut” of CNPC in global oil operations.6 Similarly, CNPC established a presence in Venezuela’s Maracaibo basin in1997.7 Beyond these early limited ventures, the first significant advance in the region by Chinese petroleum companies occurred in 2005 with the $1.45 billion acquisition of assets in Ecuador of EnCana by the CNPC-led Andes consortium.8 That was followed by smaller acquisitions, including the joint purchase of Omimex in Colombia by China’s Sinopec and India’s ONGC in September 2006.9 Another notable advance was Sinochem’s acquisition of Emerald Energy, also in Colombia, in 2009.10 Beyond traditional acquisitions, the most significant early advances by China in the sector came in politically sympathetic leftist populist countries, including the previously mentioned loans-for-oil deals in Venezuela, allowing the PRC to expand its presence in the Sinovensa joint venture controlling Venezuela’s MPE-3 block,11 as well as the Petrozumano, PetroUrica, Petrolera Paria, Petrolera Sinovenezolana, and other joint ventures in the country. Similarly, China leveraged its oil presence in Ecuador to extend more than $17 billion in loan projects to the Ecuadoran state, following on that nations default on loans to the IMF in 2008. In Bolivia, the Chinese companies explored gas projects with Bolivia’s national petroleum company YPFB in 2004,12 but no substantial project came out of this. China’s most significant advances came through the acquisitions of petroleum companies with certain holdings in the region, beginning in 2010. These included CNOOC’s March 2010 $3.1 billion acquisition of Bridas, with substantial holdings in Argentina, for $3.1 billion.13 It further included Sinopec’s December 2010 purchase of Occidental Petroleum for $2.45 billion in December of that year. In Brazil, the PRC set the stage for a substantial advance in the oil sector in May 2009 by providing a $10 billion loan to Brazil’s national oil company Petrobras during the administration of center-left leader Luiz Inácio Lula da Silva,14 giving the Chinese the opportunity to gain insights into company and Brazil’s oilfields through the financial cooperation. As in Argentina, PRC-based companies followed up with a series of acquisitions expanding their physical presence in Brazil’s petroleum sector. These

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included Sinochem’s May 2010 $3.1 billion purchase of a 40% stake in Statoil operations in the country,15 and Sinopec’s $7.1 billion acquisition Repsol’s operations in the country that October.16 As Chinese companies gained more experience in Brazil’s oil sector, particularly in the specialized area of deep-water oil drilling, Chinese companies made a major transition from investing in exploiting substantially developed oilfields, to exploring and developing fields themselves. China’s major foray in this regard occurred in 2013 with the acquisition by both CNPC and CNODC to 10% stakes the massive Libra oilfield offshore Brazil.17 In February 2016, China followed up with another $10 billion loan to Petrobras.18 Reflecting both its substantial oil reserves, and the interest of Brazil to China due to its size, the country has become China’s principal focus of oil related investment. PRC-based oil companies have invested $38.9 billion in Brazil’s oil sector, representing an impressive 80.5% of China’s investments in the sector in the region.19 Reflecting these investments, with the difficulties in Venezuelan oil production, by 2019, Brazil had become China’s major oil supplier, shipping more than 800,000 barrels per day to the PRC, with Colombia in second place, followed by Venezuela.20 In June 2021, CNOOC and CNODC committed to pay $2.94 billion to explore the 5% stake that each had acquired in Buzios, Brazil’s largest offshore oilfield.21 In September of the same year, CNOOC indicated its intention to acquire an additional 5% stake in Buzios from Petrobras for $2.08 billion.22 Despite the focus on Brazil and Venezuela, Chinese companies have acquired or developed a range of upstream and downstream petroleum operations throughout the region. The biggest single advance occurred in February 2013, when CNOOC acquired the Canadian oil company Nexen, with substantial Latin American holdings, for $15.1 billion.23 In November of the same year, CNPC capitalized on the financial distress of Brazil’s Petrobras to acquire its oil holdings in Peru for $2.6 billion.24 In Mexico, in December 2016, China’s CNOOC took advantage of the opening of the sector by the center-right Enrique Peña Nieto government in 2016, paying a substantial premium to obtain a stake in Mexico’s offshore Perdido Basin, adjacent to US oilfields in the Gulf of Mexico.25 As suggested by the preceding discussion of China’s operations in the Libra field, the cumulative acquisitions in the region by its companies over time, also began to create opportunities for expanding its position through winning contracts for exploring and developing new blocks. The 2013

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CNODC acquisition of Nexen, for example, gave it a 25% stake in the Exxon-led venture developing the Stabroek block in the waters off Guyana. The consortium ultimately discovered more than 9  billion barrels of recoverable oil there.26 Although CNOOC was initially a relatively silent partner in the Exxon-led consortium, in September 2021, CNODC announced its intentions to raise $5.1 billion to take a more active role in developing some of the fields in which the consortium had found significant recoverable petroleum deposits.27 Mining As in petroleum, the PRC has had a stake in the mining sector in Latin America since the 1990s, including its previously noted 1992 acquisition of the Marcona mine in Peru. In Chile, where national laws prevented Chinese or other companies from directly investing in copper mines, China’s effort to secure sources of supply of copper at a favorable price took the form of the $500 million advance purchase deal that the Chilean national copper organization CODELCO signed with China Minmetals in 2005.28 The arrangement committed Chile to export copper to the PRC for multiple years at a set price, in exchange for Chinese financing to help the Chilean government to increase its production capacity. The deal was subsequently criticized within Chile because it locked CODELCO into losing billions of dollars when international copper prices rose, and Chile had to supply its copper to the PRC at the submarket price agreed upon.29 As with petroleum, China’s most significant expansion in mining activities in the region has principally occurred over the past decade.30 In Peru, China has, through a combination of acquisitions and development of mines, invested $15 billion into the sector. As of late 2021, that cumulative effort gave it control of 100% of the country’s iron exports, and 25% of its copper shipments abroad.31 Major Chinese holdings in Peru include China Aluminum Corporation’s control of the Toromocho mine,32 China Minmetals acquisition of Las Bambas for $5.8 billion, and the Rio Blanco mine near Piura, postponed then restarted in 2016.33 In the context of that expanded presence, PRC-based companies have run into a range of difficulties in their attempt to operate mines in Peru. These include regular significant protests against Las Bambas by the surrounding community,34 as well as local resistance to Zijin’s development of Rio Blanco.35

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In Argentina, China Metallurgical Corporation (CMC) has acquired two major mines: the Campana Mahuida copper mine and the Sierra Grande iron mine, although neither were in production as of late 2021. Other major Chinese holdings there include a 50% interest by Shandong Gold in Veladero, Argentina’s most important gold and silver mine, and a gold mine in the province of La Rioja, acquired in February 2020 through the acquisition of Ochre mining by the Chinese firm Hanaq.36 In Brazil, the PRC has become both a key customer and a partner and a competitor with the Brazilian mining giant CVRD. In 2010, for example, Hong Kong–based Honbridge Holdings acquired Sul Americana de Metais, with operations in the country in effect competing against CVRD, and prior to the Covid-19 pandemic, was considering a new $2.2 billion mining complex investment in the state of Minas Gerais.37 In Ecuador, under the leftist populist government of Rafael Correa, PRC-based companies began developing mines in the copper-rich south,38 including El Mirador and San Carlos Panantza in the Condor mountain range. Their attempts to secure approvals and develop these mines led to significant pushback by both local communities and environmental and indigenous groups nationwide. One of the most noteworthy conflicts occurred in December 2016, leading to multiple deaths and deployment of the Ecuadoran military to the zone.39 In mineral rich Bolivia, a Chinese company initially lost to an Indian competitor, Jindal, for the development of the massive iron deposits in the east of the country, El Mutún. After Jindal ran into conflict with the Bolivian government and ultimately was forced out of the project, the leftist populist government of Evo Morales brought in the Chinese company Sinosteel. As of the time this book went to press, however, Sinosteel was significantly behind schedule in developing the project.40 In Venezuela, although the principal focus of Chinese activities in the country was petroleum, PRC-based companies also exploited the populist government’s need for capital to obtain access to its mineral resources at steeply discounted prices. In December 2009, China Development Bank loaned the populist Hugo Chavez regime $1 billion for it to expand its iron production capabilities, with the loan to be repaid by future iron deliveries to China’s Wuhan Iron and Steel Corporation (WISCO). The deal was superficially similar to China’s advance purchase agreement for Chilean copper. The specific terms of the loan, however, were so disadvantageous to Venezuela that the effective price that the country’s leftist populist regime would receive for delivering its iron to China was only 25% of

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the market price. In the end, however, the deal caused problems for WISCO as well, when the Venezuelan government failed to use the Chinese money to actually increase iron production, and it fell far behind schedule in delivering the promised iron.41 China has also acquired stakes in mining ventures in countries less known for their mineral resources. In January 2007, the Chinese firm Bosai acquired the Omai bauxite mine near Linden Guyana. Bosai later became caught up in a dispute with the local population that became violent, about the mine’s supply of electrical power to surrounding residents.42 In Jamaica, in November 2016, the PRC-based firm JISCO similarly acquired the Alpart bauxite facility from the Russian company Rusal, with promises to develop it into an industrial hub.43 In Panama, in December 2018, the Chinese mining firm Jiangxi acquired an 18% stake in the company First Quantum, making it a stakeholder in the country’s major new mining project Cobre Panama.44 In July 2020, however, it sold its stake and withdrew from the venture.45 In the increasingly strategically important lithium sector, key to the new technology batteries needed for cell phones, electric vehicles, and other items, PRC-based companies have established a significant position in all four of the Latin American countries where the mineral is found in commercially usable quantities: Chile, Argentina, Bolivia, and Mexico. Chinese companies are currently estimated to dominate 80% of the value chain involved in the production of Lithium-ion batteries.46 In Chile in 2018, the Chinese company Tianqi committed $4.1 billion for the purchase of a 24% stake in the Sociedad Quimica y Minera (SQM) project in the Atacama desert in the north of the country.47 Following initial resistance by SQM’s principal stakeholder the Pampa Group of Chilean billionaire Juan Ponce Lerou, Tianqi secured SQM’s acquiescence and eventually a favorable ruling by the Chilean government to allow the venture to proceed.48 In neighboring Argentina, the Chinese company Gangfeng acquired a stake in the Cauchari Olaroz lithium project in Jujuy province in the North of the country,49 eventually expanding its interest to a majority position. In Bolivia, the Xinjian-based company TBEA has pursued a joint venture with the Bolivian government to develop lithium in the Uyuni salt flats. In 2019, a Chinese consortium also involving TBEA won a bid for a 49% stake in a $2.4 billion project with the Bolivian state entity Yacimientos de Litio Bolivianos (YLB) to produce the metal.50 In 2021, the Bolivian

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government was actively soliciting offers for a project to develop its lithium reserves, with both TBEA and Gangfeng expressing interest.51 The Chinese company Ganfeng is also active in the newest and what could be the largest lithium operation in the region, in the Sonora desert of Mexico, the Bacanora project.52 Gangfeng acquired a 22.5% stake in the project in 2019 and then increased it to a majority position in 2020.53 Highlighting its effort to integrate its production of lithium into its supply chain for electric cars, in December 2020, Gangfeng announced it would build a lithium-ion battery recycling plant in Mexico for Tesla and its busses.54 With respect to rare earth elements used in clean energy and defense products, an important part of the commercially marketable deposits of such materials, including niobium, found outside of China, are located in Brazil. There, China has a 15% stake in CBMM consortium, which dominates niobium and other rare earth element extraction in Brazil.55 Agriculture, Wood, and Fishing In agriculture, Chinese investors initially made fleeting attempts to acquire land in key food-producing countries such as Argentina and Brazil but were restricted by local laws and regulations.56 In the same countries, PRC-based companies also attempted to establish agrologistics operations in competition with the major internationally dominant agrologistics firms such as Arthur Daniels Midlands, BungeBunge, Dreyfus, and Cargill. Chinese projects of note included a major proposal in 2012 by Sanhe Hopeful to develop a $7.5  billion agricultural complex in the South of Argentina57 and by Chongqing grain to establish a grain crushing and storage operation in Bahia, Brazil. In the end, the most successful advances for PRC-based companies came through mergers and acquisitions. In 2014, the giant Chinese agriculture purchaser China National Cereals, Oils and Foodstuffs Co (COFCO), acquired interest in two mid-size agricultural firms in the region, HK Noble and Nidera, ultimately expanding its minority positions to majority ones in 2017.58 As in other sectors, COFCO has used its purchasing power to channel benefits through its companies Nidera and Noble, to their benefit in international markets.59 Chinese agricultural purchases from the region have increased in recent years as a function of multiple factors, including the US-China trade war, which lead the PRC to substitute agricultural purchase from Brazil for those previously made from the United States. In the case of Argentina,

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“swine flu” which obliged the PRC to cull a substantial portion of its pig herd led to a significant increase in pork purchases from Argentina. Indeed, so great was the Chinese demand, that PRC-based companies began working with the Argentine state and local governments to invest in doubling Argentina’s national pork production capability to meet the demand. The project was met with resistance, however, by environmental groups affiliated with the nation’s current left-oriented government.60 In the timber sector, the PRC-based company China Greenheart has long had a presence in Suriname, while Bai Shan Lin has a significant operation in Guyana,61 despite ongoing conflicts with the Guyanese government over its business practices.62 PRC-based companies have also orchestrated smaller-scale timber purchases from other countries to pursue the enormous demand for wood, among other products, produced by rapid PRC urbanization. In fishing, China has turned to Latin American waters in multiple ways for the fish, fish meal, and other maritime-based inputs needed to feed its people. The Hong Kong–based company China Fisheries Group, for example, acquired significant holdings, in Peru, becoming the largest fishing company in the country through a series of acquisitions63 before going bankrupt in April 2021.64 Due to recurring incidents involving unreported and illegal Chinese fishing in maritime protected areas (MPAs) and in the sovereign exclusive economic zones (EEZs) of countries in the region, the activities of the Chinese deep-water fishing fleet have increasingly come under scrutiny by the international community.65 Major examples include cases in which the Chinese fleet has been found illegally fishing in the waters off of Ecuador’s Galapagos islands, in Chile’s Nazca-Desventuradas Maritime Protected Area, in Argentina’s economic zone, among other areas.66 The Chinese deep water fleet has also sought to use control of ports in the region to support the efforts of fishing fleets beyond international scrutiny. The PRC-based company Shandong BaoMa, for example, long sought access to build a major fishing port that many in the region worried would put supported activities for resupplying and offloading Chinese fishing vessels beyond the observation of Uruguayan port authorities. The project was blocked, however, by the incoming conservative Uruguayan government of Luis Lacalle Pou.67

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Pursuit of Secure Access to Markets, Technology, and Connectivity The complement to Chinese efforts to gain secure access to commodities and foodstuffs, and to capture the value added associated with its extraction, is its work to access to Latin America and Caribbean markets for its goods and services in strategic sectors. This is particularly the case for sectors and associated supply chains involving significant value added, or those seen by the Chinese state as key to type of value-producing, diversified economic activity it seeks to build. As noted previously, there is a significant overlap between the high-­ value-­added strategic markets that China is pursuing in Latin America, and its effort to build and operate the “connective tissue”68 of Latin American economies in areas from roads and ports to electricity, telecommunications, space, and e-commerce, among others. The Chinese government has been relatively open in policy documents and the discourse of its leaders with respect to focus areas with respect to technologies and sectors that it prioritizes. The most high-profile overall Chinese expression of such priorities for Chinese investment and government attention has been “Made in China 2025,” which highlights ten sectors: information technology; energy and energy-saving vehicles; high-­ end computing and computing machines and robots; energy equipment; aerospace; agricultural machines; maritime equipment and high-tech ships; new materials; advanced railroad transportation equipment; and biopharmaceutical and high-tech medical devices.69 For China, Latin America is one among many regions where it seeks to advance its technologies and achieve a dominant market position, in support of making them more competitive. It also seeks to use its dominant position in the sector to set associated standards, as suggested by the China Standards 2035 plan.70 To the extent it succeeds in doing so, setting the international standards to correspond to existing and coming Chinese products would have the feedback effect of further locking in China’s dominant position in the market. With respect to Latin America specifically, the PRC has signaled the focus areas for the markets (as well as other sectors) it wishes to pursue in documents such as the 1 + 3 + 6 concept for defining China’s commercial engagement in Latin America, as proclaimed by Chinese President Xi Jinping in a speech in Fortaleza Brazil in 2014. “1” stressed the intended unity of Chinese efforts. “3” referred to the complementary efforts of

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engagement through commerce, loans, and investment. “6” referring to the six areas in which PRC signaled that it planned to prioritize in its engagements abroad in the years that followed: energy and resources, infrastructure construction, agriculture, manufacturing, scientific and technological innovation, and information technologies.71 The Chinese government has been very open and self-conscious about assisting its companies advance in these leading-edge sectors, often including support through favorable financing. Chinese companies have sought to develop their positions in Latin America and elsewhere by initially offering products and services, which are competitive for their low cost, then expanding their position in the market while simultaneously gaining and using experience and improving the quality of their product or services. Land Transportation Projects As suggested in Chap. 2, China’s focus on the construction or improvement of land transportation routes, in support of its access to an area’s commodities, foodstuffs, and consumer markets, has been a hallmark of its global engagement, as reflected in the attention and resources it has placed on its 2013 Belt and Road Initiative. In Latin America, however, the PRC and its companies got off to a much slower start than in Africa with respect to building road, bridge, and railroad projects. This reflected, in part, relatively strong institutions in many of the key countries of the region, diversified economies, and mobilized community and interest groups, which often resisted Chinese government-to-government infrastructure deals in the region. Indeed, the early successes of Chinese transportation infrastructure projects in Latin America were principally achieved in politically sympathetic populist countries, including Venezuela, Ecuador, Bolivia, and Argentina, as well as in small Caribbean countries, which had a significant need for the resources,72 combined with bureaucracies whose small size and limited resources restricted their ability to effectively evaluate the Chinese proposals against competing bids, or to effectively assess the risks inherent in the “fine print” of the contracts. Relatively early Chinese land transportation projects that at least partially went forward include the proposed $7.5 billion railroad line from Tinoco to Anaco in Venezuela’s interior.73 In Bolivia, they included road and bridge projects by multiple PRC-based companies, including CMEC, Vicstar, and Sinohydro.74 These early projects, however, were also associated with delays, and often impaired by strikes, and community resistance.

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They nonetheless represented an important opportunity for the Chinese companies involved in to expand their foothold in the region in the sector. In the Caribbean, the Chinese commonly used umbrella financing vehicles, setting up a Chinese loan fund against which the Caribbean government could propose projects, rather than the government establishing projects and evaluating the offer of multiple commercial suitors to build them. Examples include the Jamaica Development Infrastructure Program (JDIP), and the follow-on Multiple Infrastructure Development Program (MDIP). The two initiatives collectively financed almost $2  billion in Chinese road and bridge construction in Jamaica alone over multiple years.75 Chinese companies worked multiple road projects in the Bahamas,76 Suriname, and even in the tiny island nation of Dominica, where they constructed an important highway from Portsmouth on the northwest coast, to the capital Rousseau.77 In addition to populist and small Caribbean states, prior to the 2008 PRC-Taiwan “diplomatic truce,” the concentration of countries recognizing Taiwan in the Caribbean and Central America, and the PRC government’s dedication of resources to help “flip” that recognition to the PRC in part through gifts of infrastructure, gave Chinese companies the opportunity to get a foothold in states that switched diplomatic recognition, through working the projects gifted by the PRC government as a reward for the change in diplomatic posture. Costa Rica’s Route 32 is a key example in the land transportation sector.78 Although Chinese proposals for large, transnational infrastructure projects have attracted much more international attention than its steady stream of work on smaller contracts, almost none of the more grandiose projects have gone forward. Examples of high-profile Chinese infrastructure mega-projects in Latin America that have not happened include the $40 billion Nicaragua canal, a proposed bi-oceanic highway and railroad linkage from the Atlantic to Pacific coasts of Colombia,79 a similar Atlantic-­ to-­Pacific linkage from Veracruz to Port Salinas Cruz in Mexico, and an interoceanic link across Honduras from Tigre Island on the Pacific to its northwestern Pacific coast near Ceibo.80 High-profile non-starters also include the proposed “twin oceans railway” connecting the southeast of Brazil to the ports of Bayovar or, alternatively, Ilo, in Peru.81 China’s most significant land transportation infrastructure projects that have occurred have mainly been in populist Argentina, including a multi-­ billion-­dollar modernization of the Belgrano Cargas rail system, work on

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the Buenos Aires metro, the Cordoba metro, and various light rail train projects.82 The scope of PRC work on Belgrano Cargas was expanded in 2020, shortly after the return to power of the left-oriented Peronist government of President Alberto Fernandez and Vice President Christina Fernandez, with their signing of a $4.7  billion commitment for further work on the lines, as well as new train cars and other components.83 As of the time this book went to press, the Peronist government was looking to take forward the Argentine portion of multiple highway and tunnel routes connecting the country to the Pacific over the Andean mountains and through Chile. They included linkages to the northern Chile ports such as Iquique, the near north Chilean ports, a central linkage from Buenos Aires through Mendoza Argentina, to Santiago and Valparaiso Chile, a linkage from the South of Argentina to Chile’s Biobio region and the Arauco gulf, and a linkage from Argentina’s Patagonia to the port of Aysen in Chile’s Patagonia region. The most concrete of such projects has been a 2017 Chinese proposal for the construction of a $1.5 billion highway tunnel key to the Buenos Aires to Valparaiso route over the Andes.84 China’s advance has been slower in winning public infrastructure projects in countries with capable bureaucracies committed to formal, transparent competitive bidding processes rather than government-to-government deals. In recent years, however, Chinese companies have begun to make headway through the expanded use of public-private partnership contracts (PPP).85 In such projects, the builders’ investment of its own resources allows for contracting processes and requirements that are somewhat easier to meet for Chinese companies and allow them to leverage their competitive advantage of access to resources. Recent Chinese PPP projects in the region include the North-South highway in Jamaica, and an award to China Harbour of a $900  million, 254-kilometer highway from Medellin, Colombia, to Necoclí, in the Gulf of Urabá.86 It also includes the Colombian government’s award to a China Railway Road–led consortium of a $3.9 billion project to construct the Bogota metro.87 In Chile, PPP projects have also been helpful to Chinese infrastructure builders. PRC-based companies initially lost multiple projects, including a contract for construction of the $740 million 2.6 kilometer Chacao suspension bridge linking the mainland to the island of Chiloe.88 More recently, however, through PPP, Chinese companies have been successful in projects, including improvements to a segment of Chile’s

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central Highway 5 from Talca to Chillán,89 and possible work on line seven of the Santiago metro.90 In Peru, in late 2021, the country’s new leftist government was in talks with the Chinese, seeking their investment in a $2.6  billion train from the Peruvian Andes to the Pacific coast near Marcona to support mining exports.91 In Mexico, China Communication Construction Corporation (CCCC) is the key builder of the Maya Train, the signature project of the AMLO administration for developing the south of the country.92 CCCC acquisition of a 30% stake in its partner in the project, the Portugal-based firm Mota-Engil, will likely give the Chinese an expanded capacity for doing PPP projects, given Mota-Engil’s substantial experience with such projects, and its presence in the hemisphere.93 In addition, the increasing use of public-private partnerships by Chinese companies in the sector shifts their emphasis from simply building roads and railroads to operating them, a more long-standing relationship, with greater opportunities both for learning and influence and for becoming involved in conflicts with workers, governments, and communities, and the risk of being impacted by criminal violence and other local conditions. Ports Chinese companies have made gradual but important advances in their operation and expansion of Latin American port complexes. As of late 2021, China’s Hutchison Port Holdings (HPH) had a total of six operations in Mexico, three in Panama, one in Argentina, and three in Freeport, Bahamas, in close proximity to the United States, among others.94 Beyond HPH, Chinese companies have leveraged Brazil’s financial crisis, which was unleashed in 2014 by the “Car Wash” corruption scandal, in order to acquire positions in multiple Brazilian ports, including a possible significant expansion of an agriculture-oriented megaport in São Luis.95 In the later, the focus of Chinese activities is not only on the port operation but also on the construction of road in rail infrastructure to support the port. On the Pacific Coast of Peru, the Chinese shipping giant COSCO is leading a consortium to build a $3  billion 11-berth minerals-focused megaport, capable of receiving some of the world’s biggest cargo ships, the EEE class. The port will support Chinese mining operations in the country, although it is also expected to transform logistics for other mine operators across the region.96

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In Ecuador, the government seeks to build the port of Posorja into a hub for the country’s maritime connection with China and the Pacific. As noted previously, the company given the concession for the port, DP World, has subcontracted China Harbor for the $1.2  billion of work required to expand the deep water port. In addition, the work itself will be supported by the “China Co-financing Fund for Latin America and Caribbean Region.”97 In Panama, as a complement to the three Hutchison port operations, the China-based Landbridge consortium sought to build a new facility at the Atlantic entrance to the Canal, the Panama Colon Container Port (PCCP). Although it appeared for a time that the new consortium was positioned to establish a formidable logistics presence in Colon through PCCP, a series of financial problems and criminal charges, involving the key organization behind the project, the Shanghai Gorgeous Group,98 led to the freezing of the project, along with associated investments, including the $900 million 441 MW liquid natural gas–fueled Martano power plant. The freezing of PCCP similarly contributed to the termination of a Chinese project to build a fourth trans-Panama power line, which in the absence of PCCP was reviewed and canceled for lack of economic justification.99 In El Salvador, a Chinese investment group has proposed the construction of an enormous port complex at La Union,100 supported by a special economic zone in which Chinese companies operating there would receive special tax treatment, and possibly special regulatory treatment. La Union is strategically located within Central America, at the intersection between El Salvador, Honduras, and Nicaragua in the Gulf of Fonseca. Beyond supporting the small El Salvador market, its operation as a major port, in conjunction with improved land transportation routes, would potentially facilitate greater commercial access to Honduras and Nicaragua. Such a project would thus generate synergies with the completion of the previously mentioned “dry canal” connecting Tigre Island Honduras, through San Pedro Sula, to the Atlantic Coast near Ceibo,101 on which some work has already been done by non-Chinese firms. In Jamaica, in April 2020, China Merchants Port Holdings (CMPort) assumed full ownership of the Port of Kingston after its minority partner, CMA-CGM, sold its holdings.102 CMPort has possible plans to expand Kingston as a Caribbean logistics hub in the coming years. In the Dominican Republic, the Chinese have expressed an interest in transforming Manzanillo, on the north side of the country, into a

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megaport. As of late 2021, the project was stalled and the Dominican Republic’s current US-friendly President Luis Abinader has publicly promised not to allow the Chinese to participate in critical infrastructure such as ports. Nonetheless, Abinader’s reversal on a similar public promise not to allow Huawei to participate in 5G raises questions on whether he might also reverse himself and allow Chinese participation in the port as well.103 In Guyana, China Harbor has long had a presence in the country, and there has been some discussion of a deep-water agriculture and petroleum port at Berbice. In 2015, China State Construction Engineering (CSCE) performed a self-funded study on the economic feasibility of such a port.104 In February 2021, another company, CGX Energy, announced plans to develop its own deep-water port facility in the area to support the petroleum industry.105 This step suggested that a Chinese project with supporting infrastructure, focused on the same area, could also go forward. Riverine Infrastructure Beyond land infrastructure and ports, Chinese companies are making important advances in the construction and potential operation of riverine infrastructure. The most significant such project is riverine toll route at the Atlantic exit of the Paraguay and Parana River corridor. The rivers play a key role in transporting the agricultural exports of five South American countries: Argentina, Uruguay, Brazil, Paraguay, and Bolivia. The need to dredge the mouth of the river to keep it navigable for large transport ships has led the Argentine government to let a contract for the dredging of the mouth of the waterway and its effective operation as a riverine toll route. Until August 2021, when the China-friendly Peronist government in Argentina indicted an intention to award the concession to the Belgian company Jan De Nul,106 it appeared that they would give it to the Chinese firm Shanghai Dredging, which had performed extensive work under contract in the area.107 In Peru, China Harbor is working to win its own contract for a “hydrovia,” this one to dredge the Amazon River, providing access for large commercial ships through a substantial part of Peru’s jungle interior leading to Iquitos. Currently, however, the project is delayed by pushback from local communities impacted by the corridor.108

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Clean Energy Generation, Transmission, and Distribution China has made a major push into South America in the realm of “green” forms of energy generation, transmission, and distribution. It has done so through leveraging a combination of low-cost components, low-cost construction and assembly often employing its own workers, and extended low-cost financing to capture work with respect to hydroelectric facilities, solar, and photovoltaic, among others. The PRC has also taken important steps to break into the small but expandable nuclear sector in the region as well. With respect to “green energy,” between 2000 and 2019, Chinese companies invested $58.4 billion in the energy sector in the region,109 with 15% of that focused on renewable power.110 From an infrastructure standpoint, PRC-based companies have become dominant players in green energy generation111 across Latin America, using a combination of low-cost components, financing to make projects possible that previously would not have been. With respect to hydroelectric generation, PRC-based firms have been involved in the construction of six facilities in Ecuador, three in Bolivia,112 two in Peru, two in Honduras where the PRC does not even have diplomatic relations and currently is working on two recently resurrected projects in Argentina along the Santa Cruz River.113 Chinese firms are also expanding in the sector by investing in hydroelectric facilities previously acquired by mergers and acquisitions of electricity companies with holdings in the region. In July 2021, for example, China Three Gorges announced that it was investing $573  million to upgrade hydroelectric facilities that it had previously acquired in São Paulo and Mato Grosso do Sul states, in Brazil.114 In wind power, where Chinese companies have acquired significant technologies and capabilities from their close work with European partners, they are now building wind farms across Latin America, including in Argentina, Ecuador, and other locations. China Goldwind has a total of five projects in Argentina, including Loma Blanca VI, completed in the summer of 2021.115 In Brazil, Goldwind has some 500 MW of installed wind capacity.116 Sinovel, while not as advanced in the region, signed a contract in 2018 to supply turbines to the 34.5  MW Loma facility in Brazil.117 It is important to note, however, that a portion of the technology that China is applying in the region on a large scale, supported by the financing

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of its banks, has been improperly obtained from the United States and European partners. In 2018, for example, the Chinese company Sinovel was found guilty in US courts of stealing the software used in its turbines from a US partner.118 In the solar power sector, Chinese firms have built multiple facilities across the region, including the Cauchari project in Argentina, currently the biggest such facility in Latin America. China’s export-import bank financed Cauchari, in return for terms that obligate the province of Jujuy to buy 80% of the resulting electricity from Chinese suppliers.119 In Brazil, in October 2021, the company EDP Portugal, in which China Three Gorges is a key stakeholder, opened a 252 MW solar facility in Sao Paulo state, the biggest in the region.120 In May 2021, China Development Integration Limited (CDIL) and China Machinery Engineering Corporation (CMEC), in conjunction with Brazilian billionaire Eike Batista, announced a planned $1 billion investment in 1.1 Gigawatts of photovoltaic capacity in a two-phase project near the port of Açu.121 When its phase two is completed, it will replace Cauchari as the largest solar facility in Latin America. Smaller Chinese projects in the area include the Los Llanos solar plant in Colombia, opened in January 2021, by Chinese firm Triana.122 In Mexico, in 2020, China Southern Power Industry Corporation (SPIC), one of the PRC’s largest electricity firms, acquired ownership of Zuma Energy,123 a key owner of wind and solar energy in the country.124 The acquisition of Zuma by SPIC is particularly significant because it suggests optimistic Chinese expectations to do business in Mexico’s power sector, despite strong favoritism by the AMLO government in Mexico of the public sector, over private producers.125 In nuclear energy, China has agreed with the politically sympathetic Argentine government of Fernandez to construct a Chinese Hualong-1 nuclear reactor in Argentina’s Atucha complex, with construction beginning as soon as 2022. The project when completed will double Argentina’s nuclear energy output.126 The PRC has also expressed interest in building a nuclear reactor in the Angra complex in Brazil,127 a possibility which could become more likely if, as some anticipate, the Brazilian Workers Party (PT) and Lula returns to power in that nation’s October 2022 elections.128 With respect to electricity transmission, it began in June 2008 when Spanish company Isolux Corsan hired China National Electric Engineering Corporation for a major project.129 Chinese firms began obtaining

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infrastructure in Brazil through mergers and acquisitions130 in May 2012 with State Grid’s purchase of seven properties from the Spanish company ACS.131 In the decade that followed, three Chinese firms, State Grid, China Three Gorges (C3G), and State Power Industry Corporation (SPIC), made a series of purchases in Brazil and later in Peru and Chile. Indeed, during the period, 60% of State Grid investments outside China went to Brazil. By 2018, 46% of all Chinese investments in Brazil were going to the energy sector.132 As of late 2021, State Grid’s investments in Brazil totaled $12.4 billion, including the acquisition of the nation’s largest private energy company, CPFL Energia S.A., completed in 2018.133 In July 2021, it signaled its continued advance in the country with the $525 million acquisition of CEEE-T, the power transmission company for Sao Paolo do Sul state, being privatized by the government.134 By 2023, State Grid’s investments in Brazil alone were expected to reach $38 billion.135 While China’s first major steps leveraging its capital and transmission cable technologies were in Brazil, it has also made significant investments and advances in Peru, Chile, and most recently Uruguay. In Peru, Yangtze power’s acquisition of the assets of Sempra Energy, completed in January 2021,136 gave the Chinese firm control over almost half of the electricity distribution in the greater Lima area. During the same period, through five major acquisitions, PRC-based firms captured a substantial portion of Chile’s electricity transmission and generation infrastructure. In 2019, China’s Southern Power Grid purchased a 27.7% stake in Chile’s largest transmission company, Transelec.137 In June 2020, State Grid acquired Chilquinta Energía, the third-largest distributor of electricity in Chile, from Sempra Energy.138 In the most recent transaction, State Grid paid $3  billion for a controlling stake in Compañia General de Electricidad SA (CGE) from the Spanish company Naturgy. The deal’s approval by Chilean authorities in March 2021139 collectively gave Chinese companies control over 57% of electricity distribution in the country.140 In Uruguay, in 2021, China Machinery Engineering Corporation (CMEC) won a $191  million contract with that nation’s electric utility UTE for the construction of a high-voltage transmission line connecting Tacuarembó and Salta, two cities in the north of the country, completing the country’s northern ring for distributing electricity.141

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Even in Cuba, in an October 2021 BRI forum in Qingdao, China, the PRC and Cuba agreed to allow Chinese companies to help Cuba modernize its electricity grid.142 Telecommunications In telecommunications, Chinese companies such as Huawei, and to a lesser extent ZTE, have positioned themselves as significant providers of equipment to commercial companies and infrastructure providers across the region, such as Claro, Telefonica, and Digicel among others. Smaller Chinese players are also present in the region. The Chinese companies Xiaomi and, in Mexico, according to a study by Enrique Dussel Peters, for example, Huawei, were the principal suppliers to Mexico’s main commercial operators Telcel, Telmex, and Lusacell.143 Similarly, the provider Oppo sells Huawei telephones in Peru.144 Huawei and ZTE have won contracts providing services for telecommunication coverage in rural areas in Bolivia, Peru, and other countries. In Peru, in July 2019, a consortium led by Yangtze Fiber Optic Cable (YOFC) won a $411 million contract to provide 7500 kilometers of fiber optic cable connections across the country. The contract complemented previous wins by a YOFC-led consortium to install broadband to the Amazonas and Ica regions, La Libertad, Ancash, Arequipa, and San Martin.145 In Bolivia, ZTE has the principal contract for building out broadband in the country.146 In Guyana, in November 2021, Huawei was donating 1000 4G internet boxes to the country.147 As Latin American states auction bandwidth and prepare contracts for rolling out 5G infrastructure, Huawei is positioned as a low-cost provider with leading edge technology to potentially beat out non-Chinese rivals such as Nokia and Ericsson, to win a significant role in 5G. As of November 2021, Latin American countries had conducted approximately 30 5G demonstration projects with Huawei present in a third of these.148 While Huawei itself may not be awarded specific contracts, the companies who are winning those auctions, by using and relying heavily on Huawei equipment,149 introduce Chinese components into national telecommunications infrastructures, except where specifically banned by national policies. Already, Colombia and other countries have gone forward with 5G commitments that permit Huawei components.150 Brazil and the Dominican Republic recently reversed prohibitions on Huawei

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components in their 5G infrastructures. Uruguay also appears likely to approve Huawei participation.151 Beyond 5G, Huawei has also established a series of six data centers in the region: two in Mexico, two in Brazil, and two in Chile.152 Chinese companies have also played an important role in the construction of the fiber optic, backbone for telecommunications in the region, as well as for connecting the region to other parts of the world. For example, Huawei played a role in building the offshore fiber optic cable linking Suriname and Guyana.153 Similarly, ZTE built the fiber optic cable linking Cuba and Jamaica to Venezuela,154 as well as the one connecting Georgetown, Guyana, to Brazil at Lethem.155 Huawei was further a leading contender for a proposed cable connecting Chile to Asia through Hong Kong, until the project was restructured because of data security concerns. An alternative route was selected, going through Australia, and with the cable being built by the Japanese, and not Huawei.156 Surveillance Technologies Beyond telecommunications, Chinese companies such as Huawei have increasingly exported their surveillance and associated “smart cities” capabilities, originally developed for the Chinese market. Indeed, there are estimated to be more than 500 smart cities architectures constructed in China itself.157 Key technologies being exported include cameras with facial recognition capabilities, other biometric systems for recognizing individuals, linkages through communication architectures, remote processing of data including artificial intelligence algorithms, and the integration of information on the identity and location of persons with financial and other data on them. With respect to smart cities, such Chinese offerings are attractive in Latin America, where authorities struggle to combat high levels of public insecurity and crime, as well as inefficiencies in public infrastructures.158 Latin American corruption also makes such systems potentially useful, since digitized systems can provide both an increased level of transparency and efficiency in the interface between governments and their publics. Examples of major Chinese surveillance and integrated response architectures include ECU-911,159 BOL-110, cameras for Uruguay’s border with Brazil, a system in the Argentine province of Jujuy, and cameras in the Panama free-trade zone, among others.160

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The cutting edge of the application of these multidimensional technologies is social credit systems linked to smart cities. Such technologies link the aforementioned surveillance capabilities with others such as emergency services, payment systems, public registries, public transportation systems, and utilities just to name a few. In Latin America, such technologies are inherently attractive, due to high levels of insecurity and often questionably capable police forces. Such systems can help to address such insecurity challenges while taking corruptible individuals out of the loop. They can also help to identify and limit spaces for corruption input services through their digitization. Simply, through the digitation of financial activities, they can support the identification of individuals receiving improper income, a significant problem in the high-corruption environment of Latin America, including in government, police forces, and other places. To date, PRC-based companies such as Huawei have deployed integrated surveillance systems, particularly in friendly authoritarian populist countries. Examples include the deployment of the ECU-911 national monitoring and emergency response system in Ecuador,161 the analogous BOL-110 system in Bolivia, Chinese surveillance systems in the free-trade zone of Colon Panama, border surveillance camera systems on Uruguay’s border with Brazil, and smart cities solutions in Jujuy, Argentina, and proposed systems in cities throughout northeast Brazil, among others.162 Chinese companies also took advantage of the Covid-19 pandemic to further their surveillance architectures, donating thermal cameras, assembly for the identification of sick persons, in sensitive locations such as public ministry buildings, airports, and bus terminals throughout the region. For example, in May 2020, China donated a system of heat-sensing Hikvision cameras and other electronic equipment, for the official purpose of detecting persons potentially sick with Covid-19.163 China installed the cameras, however, in sensitive areas such as the Tocumen International Airport, the Ministry of Public Security, the Health Ministry, and the Office of the First Lady.164 Space In recent years, in support of its broader space and infrastructure objectives, the PRC has made significant advances in constructing and launching satellites for multiple Latin American countries, generally through its space services company China Great Wall Industry Corporation (CGWIC).165

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It also includes building supporting ground control infrastructure in the countries involved, as well as training their space-oriented administrative and support personnel. It has notably built and manned a facility in Argentina to support PRC beyond-earth space operations. Such activities have intelligence value for the PRC through the infrastructure they have supplied and personnel in the region they have trained. More indirectly, they also support the PRC’s own space operations, the development of PRC space technologies, the advance of PRC space support infrastructure with military implications, and also support China’s access to information through those Latin American space architectures, while giving it greater commercial leverage. With Brazil, the Chinese have codeveloped and launched a total of six earth-sensing satellites, within the framework of the China-Brazil Earth Resources Satellite (CBERS) program.166 The CBERS program was initially a product of Brazil’s attempt to circumvent US refusal to help the country obtain launch vehicle technology, out of fear that it would develop a nuclear missile.167 The most recent such launch occurred in December 2019,168 under the pro-US Brazilian government of Jair Bolsonaro. Over two decades, cooperation under the CBERS program has helped the PRC improve its digital imaging and communication technology, as well as giving it insight and access to Brazil’s space program, architectures, and personnel. Also in Brazil, the PRC is interested in the equatorial launch facility at Alcântara. Such equatorial facilities are attractive for the launch of satellites into certain types of orbits, because they leverage to the maximum degree the momentum of the earth’s rotation, minimizing the amount of propellant needed by a rocket to achieve the targeted orbit. Although the Bolsonaro government signed commercial agreements with the United States that for the moment preclude the PRC from using Alcântara,169 a return of a left-oriented government to Brazil after that nation’s October 2022 elections could reopen the possibility of PRC access to Alcântara. With respect to Venezuela, in October 2008, as noted previously, the PRC developed and launched the populist leftist regime’s first satellite, Venesat-1, a communications relay satellite.170 It subsequently launched two earth-imaging satellites for the regime: VRSS-1 and VRSS-2. The second was launched, and probably also paid for, in October 2017171 as the Maduro regime in Venezuela was in a state of political and economic crisis, defaulting on its other creditors.

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The Chinese construction of satellite architectures in Venezuela however includes not only the satellites themselves but also the electronic outfitting and data and communications integration of ground control facilities. In the case of Venezuela, this included the principal ground control facility at the Manuel Rios base (BAMARI) near Caracas, and the remote secondary facility Luepa, in southeast Bolivar state.172 Bolivia’s space cooperation with China under the leftist populist MAS government of Evo Morales resembled China-Venezuela cooperation, albeit on a smaller scale. In December 2013, the PRC developed and launched Bolivia’s first communications relay satellite, Tupac Katari, for a total cost of $295.4 million.173 The Morales regime also contracted for the development and launch of a second satellite, Bartolina Sisa, although as of late 2021, the project had not gone forward. As with Venezuela, Bolivia’s first China-developed satellite was primarily a communication relay satellite, while the second was to be a remote earth-sensing satellite.174 As with Venezuela, the Chinese not only developed and launched the Tupac Katari for Bolivia but also outfitted and connected its two principal ground control facilities, at Amachuma in La Paz and at La Guardia in the lowland Department of Santa Cruz, in the east of the country. As in Venezuela, China also helped to train Bolivia’s space-oriented personnel and helped it to set up the new Bolivian Space Agency (ABE).175 In both Bolivia and Venezuela thus, the combination of the Chinese having built the satellites, the facilities for controlling and communicating with them, and potential ongoing contact through the training of space personnel positions the PRC to have access to the communications, images, and other data being captured by those space systems, including images, signals data, and other material potentially involving the United States or other actors of interest. Beyond these examples, China also developed and launched a microsat for Ecuador, Pegasus, under the administration of Rafael Correa. Unfortunately for the program, the satellite was destroyed by space debris shortly after launch.176 In Chile, Chinese personnel have a presence, shared with European and other scientists, in a space observatory in the Atacama Desert.177 The PRC was interested in a second, stand-alone facility near the location, but after having proposed and discussed the facility publicly, was ultimately not given permission to build it by the Chilean government. In addition, when Chile’s US-built FASAT-C satellite constellation had to be replaced, senior Chileans proposed replacing the system with China’s Beidou, although

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the center-right Chilean government of Sebastian Pinera ultimately chose an Israeli system as a replacement.178 China’s space activities in Argentina have probably received the greatest amount of attention in the Western media, and have been the most controversial. In 2014, as noted previously, the PRC built a deep-space communication antenna at Bajada de Agrio, a remote part of Argentina’s Neuquén province.179 The facility was particularly controversial because the Argentine government had only limited access to the facility, which was operated by PLA personnel on Argentine soil.180 The observable characteristics of the collector dish appear consistent with the stated purpose and need for continuous communication with Chinese assets in space. Nonetheless, the facility may also have the ability to sweep up signals from passing US and other satellites. In addition to Bajada de Agrio, the PRC has operated out of Argentina’s San Juan observatory since 1989. In recent years, the Chinese presence has been significantly expanded to include the four-meter China Argentina Radio Telescope (CART).181 In 2021, the Chinese company Beijing Aerospace Satelliteherd proposed a project to the provincial government of Santa Cruz for a space radar facility in the southern extreme of the country, in the Rio Gallegos industrial park, to support satellites in polar orbits.182 The importance that China gives to space cooperation with Latin America was highlighted by its inclusion of a special section on the topic in the 2022–2024 China-CELAC cooperation plan, which included promotion of the use of China’s Beidou satellite constellation, and interest in Chinese support for a new Latin American and Caribbean Space Agency.183 Financial Services, E-commerce, and Data In yet another domain of information technology-enabled infrastructure, Chinese firms are playing an increasing role in both traditional and leading-­ edge financial services and e-commerce across Latin America and the Caribbean. PRC-based banks have moved from providing loans to Latin American governments, and representational services to Chinese firms operating in Latin America, to providing branch banking services to both Chinese and non-Chinese clients. Prominent examples include the acquisition of Standard Bank by Industrial and Commercial Bank of China (ICBC), approved by Argentine regulators in 2012,184 giving ICBC a presence in

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branch banking in the country. In Brazil, by 2021, five of China’s largest lenders, including ICBC, China Commercial Bank, Bank of China, Haitong, and China Communications Bank, had established a presence in the country.185 The PRC is further integrating itself into the financial architectures of the region through the establishment of currency clearing arrangements and bank swaps, designed to facilitate the use of the Chinese currency, the RMB (Yuan) in transactions in the region.186 That advance supports the PRC’s long-run goal of advancing the international use of the RMB, as a global currency on par with the US dollar and the euro.187 Key examples include establishing $18.7 billion in currency swap facilities with Argentina, renewed for three years in August 2021.188 It also includes a $30 billion swap arrangement with Brazil, through the Bank of China.189 Chinese penetration of Latin American financial architectures further includes nontraditional activities. In December 2021, Brazilian credit card and digital payments company NuBank, in which the Chinese firm Tencent is a significant minority stockholder, was preparing for an initial public offering that would make it the largest publicly listed bank in the region.190 Similarly, the Chinese financial services firm Fosun has made significant advances in Brazil in recent years.191 This has included acquiring the assets of Brazilian financial firms Guide and Rio Bravo and establishing itself in a new skyscraper in Brazil’s financial center Sao Paulo, although in recent years, Fosun has also moved to divest itself of some of its Brazilian holdings.192 In e-commerce, Alibaba, of Chinese billionaire Jack Ma, competes against Amazon and local firms in the region such as Mercado Libre for a role in e-commerce. Some of the most significant Chinese advances in nontraditional e-­commerce have been achieved by the ridesharing firm DiDi Chuxing, a competitor to Uber.193 By late 2021, the firm had captured approximately half of the rideshare market in Latin America, with over a billion rides given.194 Although Didi’s expansion in the region was slowed temporarily by the Covid-19 pandemic, by the time this book went to press, the company was operating in 11 Latin American countries: Argentina, Chile, Panama, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Panama, Peru, and Brazil.195 In Brazil, Didi significantly expanded its presence through the acquisition of local rideshare company “99” and, by late 2021, had over 600,000 registered drivers in the country.196

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Beyond e-commerce, China also has a presence in the region in data management services more broadly. In Chile, in August 2021, participation by a Chinese company in a contract to manage the country’s civil registry data unleashed strong public debate due to concerns that having a PRC-based firm in such a role could put the country’s most sensitive personal data at risk, creating a national security threat.197 China’s ambitions to maintain a presence in Latin America and coordinate with its partners in the digital space in general are reflected in the 2022–2024 China-CELAC plan. In that document, signed in December 2021, China indicates its interest in promoting a dialogue for cooperation in cyberspace and eventually developing norms and rules for its cooperation with its Latin American partners in cyberspace, including collaboration in cybersecurity and against cybercrime.198 China’s Export of Digital Authoritarianism to the Region As noted in Chap. 2, and as explored further in Chap. 7, China’s pursuit of its commercial and other strategic objectives in Latin America has facilitated not only the incubation of authoritarian populist regimes but also its support of information and control architectures to friendly regimes that help them to control their own populations and political opposition and thus continue in power as entrenched and dependable friends of China. Leading examples in the region, to date, include Chinese economic and other support to populist regimes in Venezuela, Ecuador, Bolivia, and Cuba. While the implementation of such systems in democratic societies is really restricted by individual privacy rights and liberties, China’s populist authoritarian friends in Latin America and elsewhere have proven willing to contract with Chinese companies for such systems, with the support of the Chinese state in implementing them. The flagship example for such cooperation is ZTE’s implementation of the “fatherland identity card” in Venezuela. This system was originally used for voter registration, then made obligatory for obtaining increasingly scarce food from the Venezuelan state, in the form of the famous “Local Committees for Production and Supply” (CLAP) boxes.199 Most recently, the system has been used to control the distribution of scarce Chinese and Russian Covid-19 vaccines.200 Effectively, it ensures that only those registering with the Venezuelan state, with their other activities such as voting tracked, can obtain access to scarce and badly needed goods such

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as food and vaccines. While the state does not explicitly say that voting against the regime or engaging in anti-regime activities such as protests will result in the denial of food and vaccines, the fear that the regime knows who votes against the regime acts to dissuade Venezuelans from doing so, for fear of losing access to other needed resources, while also ensuring that the identity and potentially the activities of those who do receive those resources are known to the regime. In Cuba, the role of China’s Huawei, and other telecommunication firms in building the internet architecture for the Cuban telecommunications organization ETECSA,201 and the role of ZTE in constructing Cuba’s fiber optic data connection to the world through Venezuela,202 helped the Cuban regime monitor and restrict the data flowing through those architectures in response to nationwide protests on July 9, 2021, cutting off individual protests from each other, and preventing them from telling the world what was happening on the Island as the Cuban regime cracked down,203 with the Communist government ultimately arresting over 800 Cubans.204 Beyond such examples, as noted previously, Chinese companies have also played a key role in implementing national security and surveillance architectures in Ecuador with ECU-911,205 and in Bolivia with BOL-110. Although implemented in the name of public security and improving emergency and public services, they provide opportunities for the authoritarian populist regimes that receive them to monitor the activities of their populations, from their participation in protests, contacts with the police and other parts of the government, to their movement. Such systems have the potential, as is the case in China, to also be extended to the financial and commercial activities of subject populations, as well as their interactions in social media and other public speech. As in China, the export of such tools thus gives authoritarian regimes friendly to the PRC in Latin America and elsewhere powerful tools for identifying, intimidating, and suppressing dissent.

Notes 1. The concentration of Chinese foreign direct investment in state-owned companies was documented by Enrique Dussel Peters, “Characteristics de la inversion extranjera directa esparza en America Latina (2000–2011),” in America Latina y El Caribe – China: Economa, Comercio e Inversiones,

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Enrique Dussel Peters, Ed., (Mexico City: Red China-ALC, 2013), pp. 195–198. 2. See Li Xing, “Revisiting Chinese and Latin American Economic Development: An Unintended Consequence of Different Industrialization Strategies,” in China–Latin America Relations in the 21st Century: The Dual Complexities of Opportunities and Challenges, Raúl Bernal-Meza and Li Xing, eds. (London: Palgrave Macmillan, 2020), pp. 275–277. 3. For a good contemporary discussion of this, see Ryan C. Berg and Thaigo de Aragão, “Is Latin America Important to China’s Foreign Policy?” Center for Strategic and International Studies, June 9, 2021, https:// www.csis.org/analysis/latin-­america-­important-­chinas-­foreign-­policy. 4. Zhao Xuemei, “Chinese Investments in Latin America: An Analysis of the Distribution of Industries,” in China-Latin America Relations: Review and Analysis (Volume 1), He Shuangrong, Ed. (Beijing: Paths International, Ltd., 2011), pp. 85–95. 5. “Who We Are,” 2021. 6. “Winning trust with technology,” CNPC official website, Accessed August 31, 2021, http://www.cnpc.com.cn/en/xhtml/images/features/CNPC_Latin_America/7-­W inning%20Tr ust%20with%20 Technology.pdf. 7. “Sincor heavy oil project on stream in Venezuela,” 2000. 8. Ben Dummett, “Chinese Firms to Pay $1.42  Billion for EnCana Oil Assets in Ecuador,” The Wall Street Journal, September 14, 2005, https://www.wsj.com/articles/SB112660924522839142. 9. “ONGC and Sinopec acquires Colombian Oil Assets,” OneIndia, September 21, 2006, https://www.oneindia.com/2006/09/21/ongc-­ and-­sinopec-­acquires-­colombian-­oil-­assets-­1158844055.html. 10. Maverick Chen, “Sinochem to buy UK-based Emerald Energy,” China.org, August 14, 2009, http://www.china.org.cn/business/ highlights/2009-­08/14/content_18338532.htm. 11. “Venezuela to boost Sinovensa oil project output,” Reuters, May 8, 2008, https://www.reuters.com/article/venezuela-­sinovensa­idUSN0841462520080508. 12. “Shengli to invest in Bolivia,” Alexander’s Gas and Oil Journal, September 3, 2004, http://www.gasandoil.com/news/ms_america/b80c6f3a138e db83d8b72eca60e52950?month:int=5&orig_query=. 13. Yvonne Lee and Nisha Gopalan, “Cnooc Acquires Argentina Oil Assets,” The Wall Street Journal, March 14, 2010, https://www.wsj.com/articles/SB10001424052748704416904575121130528712408. 14. “China signs $10  bln loan-for-oil Petrobras deal,” Reuters, May 19, 2009, https://www.reuters.com/article/china-­brazil-­oil-­ idUSPEK26621320090519.

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15. “Sinochem to become 40% partner of Statoil in Peregrino oil field in Brazil,” Eqinor, May 21, 2010, https://www.equinor.com/en/news/ archive/2010/05/21/12MayPeregrino.html. 16. Santiago Perez, Simon Hall and Bernd Radowitz, “Repsol to Sell Brazil Stake to Sinopec for $7.1  Billion,” The Wall Street Journal, October 1, 2010, https://www.wsj.com/articles/ SB10001424052748703859204575525292369142622. 17. “CNPC in Brazil,” CNPC official website, Accessed September 2, 2021, https://www.cnpc.com.cn/en/Brazil/country_index.shtml. 18. Paul Kiernan, “Brazil’s Petrobras Signs $10  Billion China Loan Pact,” The Wall Street Journal, February 26, 2016, https://www.wsj.com/ articles/brazils-­p etrobras-­s igns-­p act-­f or-­1 0-­b illion-­i n-­l oans-­f rom-­ china-­1456529796. 19. “China Stakes Its Claim in Latin American Energy,” Institute of the Americas, February 2021, https://user-­9sjqssx.cld.bz/China-­Stakes-­Its-­ Claim-­in-­Latin-­American-­Energy/2/. p. 18. 20. “China Stakes Its Claim in Latin American Energy,” 2021, p. 18. 21. “Chinese Oil Majors to Pay USD2.94  billion for Brazilian Field Exploration,” China-Lusophone Brief, June 14, 2021, https://www. clbrief.com/chinese-­o il-­m ajors-­t o-­i nvest-­i n-­u sd2-­9 4-­b illion-­i n-­ brazilian-­field/. 22. “China’s CNOOC to Buy Brazil Oilfield Stake for USD 2.1  billion,” China-Lusophone brief, September 30, 2021, https://www.clbrief.com/ chinas-­cnooc-­to-­buy-­brazil-­oilfield-­stake-­for-­usd-­2-­1-­billion/. 23. Euan Rocha, “CNOOC closes $15.1  billion acquisition of Canada’s Nexen,” Reuters, February 25, 2013, https://www.reuters.com/article/ us-­nexen-­cnooc-­idUSBRE91O1A420130225. 24. “Petrobras sells Peru unit to PetroChina/CNPC for $2.6  billion,” Reuters, November 13, 2013, https://www.reuters.com/article/ us-­petrochina-­petrobras-­acquisition-­idUSBRE9AC0CU20131113. 25. Adriana Barrera and David Alire Garcia, “China stakes claim in Mexico oil opening at deep water auction,” Reuters, December 5, 2016, https://www.reuters.com/ar ticle/us-­m exico-­o il-­a uction-­f irst­idUSKBN13U2I2. 26. “ExxonMobil announces discovery at Uaru-2 offshore Guyana,” Exxon-­ Mobil, April 27, 2021, https://corporate.exxonmobil.com/News/ Newsroom/News-­r eleases/2021/0427_ExxonMobil-­a nnounces-­ discovery-­at-­Uaru-­2-­offshore-­Guyana. 27. “Exxon’s Chinese partner CNOOC raising US$5.1B for projects in Stabroek Block,” Guyana Times, September 29, 2021, https://guyanatimesgy.com/exxons-­chinese-­partner-­cnooc-­raising-­us5-­1b-­for-­projects-­ in-­stabroek-­block/.

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28. Chen Hua, “China, Chile sign joint copper venture deal,” China Daily, June 1, 2005, http://www.chinadaily.com.cn/english/doc/2005-­06/ 01/content_447522.htm. 29. “Las operaciones de Codelco en Bermudas que no gustaron a Impuestos Internos,” El Mostrador, December 15, 2013, https://www.elmostrador.cl/mercados/destacados-­mercado/2013/12/15/las-­operaciones­de-­codelco-­en-­bermudas-­que-­no-­gustaron-­a-­impuestos-­internos/. 30. For a detailed, although now somewhat dated, analysis, see La economia Esparza y las industrias extractivas: desafíos para el Peru, Cynthia A.  Sanborn and Victor Torres C., eds. (Lima, Peru: Universidad del Pacifico, 2009). 31. Maria Isabela Osterloh, “Recuento de las inversiones chinas en Perú en el sector infraestructura 2016–2019,” Alerta Económica, November 13, 2019, https://alertaeconomica.com/recuento-­de-­las-­inversiones-­ chinas-­en-­peru-­en-­el-­sector-­infraestructura-­2016-­2019/. 32. Sanborn, 2009, pp. 305–320. 33. “Renace proyecto de Río Blanco en Piura por más de US$ 2,500 millones,” Gestion, November 21, 2016, https://gestion.pe/economia/empresas/ renace-­proyecto-­rio-­blanco-­piura-­us-­2-­500-­millones-­121233-­noticia/. 34. Marco Aquino “Peruvian protesters lift blockade of La Bambas mine after new PM pledges to resolve impasse,” Reuters, August 2, 2021, https:// www.reuters.com/article/peru-­copper-­mmg-­ltd-­idUSL1N2P92LZ. 35. Cynthia A. Sanborn, “China Inc., las industrias extractivas y el Peru: Un estudio exploratorio,” in La economia Esparza y las industrias extractivas: desafíos para el Peru, Cynthia A.  Sanborn and Victor Torres C., eds. (Lima, Peru: Universidad del Pacifico, 2009), pp. 305–320. 36. R.  Evan Ellis, “New Directions in the Deepening of China-Argentine Engagement,” Global Americans, February 11, 2021, https://theglobalamericans.org/2021/02/new-­d irections-­i n-­t he-­d eepening-­c hinese­argentine-­engagement/. 37. “Chinese mining group plans to build an US$ 2.2bn complex in Brazil,” Mercopress, September 17, 2019. 38. “Ecuador comienza explotación minera a gran escala con el proyecto Mirador en Zamora Chinchipe,” El Universo, July 18, 2019, https:// www.eluniverso.com/noticias/2019/07/18/nota/7430958/ ecuador-­comienza-­explotacion-­minera-­gran-­escala-­proyecto-­mirador/. 39. Cintia Quiliconi and Pablo Rodríguez Vasco, “Chinese Mining and Indigenous Resistance in Ecuador,” The Carnegie Endowment for International Peace, September 2021, https://carnegieendowment. org/files/202109-­Quiliconi_Vasco_China_and_Ecuador_final.pdf. 40. “Sinosteel Equipment begins construction at Bolivia’s Mutun steelworks,” S&P Global, July 19, 2018, https://www.spglobal.com/platts/

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en/market-­insights/latest-­news/metals/071918-­sinosteel-­equipment­begins-­construction-­at-­bolivias-­mutun-­steelworks. 41. Maria Antonieta Segovia, “A dream deal for China that ended in nightmarish debt for Venezuela,” Dialogo Chino, February 14, 2021, https:// dialogochino.net/en/trade-­i nvestment/40016-­a -­d ream-­d eal­with-­china-­that-­ended-­in-­nightmarish-­debt-­for-­venezuela/. 42. Carol Chan, “Bosai wins bidding for Guyana bauxite mines,” South China Morning Post, January 23, 2007, https://www.scmp.com/article/579301/bosai-­wins-­bidding-­guyana-­bauxite-­mines. 43. “Chinese company takes charge of Alpart,” Jamaica Information Service, November 16, 2016, https://jis.gov.jm/chinese-­company­takes-­charge-­alpart/. 44. “First Quantum shares jump after China’s Jiangxi Copper takes 18% stake,” Reuters, December 9, 2019, https://www.reuters.com/article/ us-­m ining-­c anada-­f irst-­q uantum/first-­q uantum-­s hares-­j ump-­a fter-­ chinas-­jiangxi-­copper-­takes-­18-­stake-­idUSKBN1YD2B3. 45. “Jiangxi Copper sells shares in First Quantum,” Mining.com. July 20, 2020, https://www.mining.com/jiangxi-­copper-­sells-­shares-­in­first-­quantum/. 46. “China Stakes Its Claim in Latin American Energy,” 2021, p. 8. 47. “China Stakes Its Claim in Latin American Energy,” 2021, p. 8. 48. “China Stakes Its Claim in Latin American Energy,” 2021, p. 12. 49. “China Stakes Its Claim in Latin American Energy,” 2021, p. 12. 50. “China Stakes Its Claim in Latin American Energy,” 2021, p. 12. 51. Pilar Sanchez Molina, “Bolivia launches call for lithium extraction,” PV Magazine, May 4, 2021, https://www.pv-­magazine.com/2021/05/04/ bolivia-­launches-­call-­for-­lithium-­extraction/. 52. Alex Hamer, “Bacanora announces takeover approach from Chinese lithium major,” Investors Chronicle, May 6, 2021, https://www.investorschronicle.co.uk/news/2021/05/06/bacanora-­announces-­takeover­approach-­from-­chinese-­lithium-­major/. 53. “China Stakes Its Claim in Latin American Energy,” 2021, p. 8. 54. “China Stakes Its Claim in Latin American Energy,” 2021, p. 8. 55. Ruby Lian and Denny Thomas “China Baosteel group buys $1.95 bln stake in Brazil CBMM,” Reuters, September 2, 2011, https://www. reuters.com/ar ticle/us-­c bmm-­n iobium/china-­b aosteel-­g roup-­ buys-­1-­95-­bln-­stake-­in-­brazil-­cbmm-­idUSTRE7811UB20110902. 56. Daniel Mendez Moran, El plan de China en America Latina, (2018), pp. 264–269. 57. Kelly Hearn, “China plants bitter seeds in South American farmland,” Washington Times, February 1, 2012, https://www.washingtontimes. com/news/2012/feb/1/china-­plants-­bitter-­seeds-­in-­south-­american­farmla/.

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58. “Acquisition of Nidera completed,” COFCO official website, February 28, 2017. 59. Daniel Mendez Moran, El plan de China en America Latina, (2018), pp. 269–275. 60. Maximilian Heath, “Argentina delays China pork export deal amid environmental protests,” Reuters, September 1, 2020, https://www.reuters. com/article/us-­argentina-­china-­pork-­idUSKBN25S661. 61. John C.  Cannon, “Chinese logging company takes over Guyana’s forests,” Monogabay, November 26, 2014, https://news.mongabay. com/2014/11/chinese-­logging-­company-­takes-­over-­guyanas-­forests/. 62. “Harmon issues statement on Bai Shan Lin controversy,” iNews Guyana, April 14, 2016, https://www.inewsguyana.com/harmon­issues-­statement-­on-­bai-­shan-­lin-­controversy/. 63. Alan Fairlie, “La inversion extrajera directa de China en Peru. Los csos de China Fishery Group y Chinalco,” in China en America Latina: 10 casos de estudio, Enrique Dussel Peters, ed. (Mexico City: Red China-ALC, 2014), pp. 148–178. 64. “China Fishery settlement; Foley Fish sold; Indian shrimp harvest,” Undercurrent News, April 27, 2021, https://www.undercurrentnews. com/2021/04/27/daily-­recap-­april-­26-­china-­fishery-­settlement-­foley-­ fish-­sold-­indian-­shrimp-­harvest/. 65. “Hundreds of fishing fleets that go ‘dark’ suspected of illegal hunting, study finds,” The Guardian, June 2, 2021, https://www.theguardian. c o m / e n v i r o n m e n t / 2 0 2 1 / j u n / 0 2 / f i s h i n g -­f l e e t s -­g o -­d a r k ­suspected-­illegal-­hunting-­study. 66. R.  Evan Ellis, “Do Latin American Waters Continue to Fall Prey to China’s Fishing?” Newsmax, October 16, 2020, https://www.newsmax.com/evanellis/chile-­d eepwater-­e ez-­g alapagos/2020/10/16/ id/992375/. 67. R.  Evan Ellis, “Uruguay exemplifies how to deal with China,” Global Americans, June 22, 2021, https://theglobalamericans.org/2021/06/ uruguay-­exemplifies-­how-­to-­deal-­with-­china/?_thumbnail_id=24819. 68. See Danielly Ramos Becard, Antonio Carlos Lessa, and Laura Urrejola Silveira, “One Step Closer: The Politics and the Economics of China’s Strategy in Brazil and the Case of the Electric Power Sector,” in China– Latin America Relations in the 21st Century: The Dual Complexities of Opportunities and Challenges, Raúl Bernal-Meza and Li Xing, eds. (London: Palgrave Macmillan, 2020). 69. “‘Made in China 2025’ Industrial Policies: Issues for Congress,” 2020. 70. Arjun Kharpal, “Power is ‘up for grabs’: Behind China’s plan to shape the future of next-generation tech,” CNBC, April 27, 2020, https://www. cnbc.com/2020/04/27/china-­standards-­2035-­explained.html.

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71. “China & LAC: Doing the Math,” Interamerican Dialogue, July 20, 2015, https://www.thedialogue.org/blogs/2015/07/china-­lac-­doing­the-­math/. 72. See, for example, Richard L. Bernal, Dragon in the Caribbean, (Kingston: Ian Randle, 2014) Richard L. Bernal, Dragon in the Caribbean, (Kingston: Ian Randle, 2014), p. 22. 73. Maria Antonieta Segovia, “The Chinese train derailed on Venezuela’s plains,” ArmandoInfo, March 3, 2021, https://armando.info/en/ the-­chinese-­train-­derailed-­on-­venezuelas-­plains/. 74. Ellis, “Chinese Engagement with Bolivia,” 2016. 75. R. Evan Ellis, “China’s Advance in the Caribbean,” The Wilson Center, October 2020, https://www.wilsoncenter.org/sites/default/files/ media/uploads/documents/China%E2%80%99s%20Advance%20in%20 the%20Caribbean.pdf. 76. “Bahamas, Chinese Firm Agree on Infrastructure Projects in Abaco, Exuma,” Caribbean Journal, March 10, 2011, https://www.caribjournal.com/2011/03/10/bahamas-­chinese-­firm-­agree-­on-­infrastructure-­ projects-­in-­abaco-­exuma/. 77. “Roseau to Portsmouth Highway – ‘a significant landmark’,” Da Vibes, April 3, 2012, https://www.dominicavibes.dm/news-­51981/. 78. “China Conditions US$400  Million Loan for Expansion of Ruta 32,” QCostaRica, June 1, 2013, https://qcostarica.com/china-­conditions­us400-­million-­loan-­for-­expansion-­of-­ruta-­32/. 79. “Is Colombian ‘dry canal’ plan real?” Washington Times, March 14, 2021, https://www.washingtontimes.com/news/2011/mar/14/ is-­colombian-­dry-­canal-­plan-­real/. 80. Simon Romero, “China’s Ambitious Rail Projects Crash into Harsh Realities in Latin America,” The New  York Times, October 3, 2015, https://www.nytimes.com/2015/10/04/world/americas/chinas-­ ambitious-­rail-­projects-­crash-­into-­harsh-­realities-­in-­latin-­america.html. 81. “The Twin Ocean Project: South America’s Transcontinental Railroad,” Council on Hemispheric Affairs, June 11, 2015, https://www.coha.org/ the-­twin-­ocean-­project-­south-­americas-­transcontinental-­railroad/. 82. R.  Evan Ellis, “Chinese ‘Face’ and Soft Power in Argentina,” The Manzella Report, January 1, 2014, http://www.manzellareport.com/ index.php/world/792-­chinese-­face-­and-­soft-­power-­in-­argentina. 83. Oliver Cuenca, “Argentina selects Chinese companies to restore freight lines and supply trains,” International Rail Journal, https://www.railjournal.com/financial/argentina-­selects-­chinese-­companies-­to-­restore-­ freight-­lines-­and-­supply-­trains/.

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84. Joel Richards, “Chinese firms put bid in for Argentina and Chile tunnel construction,” CGTN, https://america.cgtn.com/2017/05/11/ chinese-­firms-­put-­bid-­in-­for-­argentina-­and-­chile-­tunnel-­construction. 85. See, for example, Carolina Urrego-Sandoval, “New Horizons for Chinese Investment in Colombia: Public-Private Partnerships,” September 1, 2021, Dialogo Chino, https://dialogochino.net/en/comercio-­ y-­i nversiones-­e s/45831-­n ew-­h orizons-­f or-­c hinese-­i nvestment-­i n-­ colombia-­public-­private-­partnerships/. 86. “US$900  million road project in Colombia reaches financial close,” InfraPPP, July 30, 2018, https://www.infrapppworld.com/news/ megaproject-­1303-­us-­900-­million-­r oad-­project-­in-­colombia-­r eaches-­ financial-­close. 87. Jorge Valencia, “By building Bogotá metro, China makes a new breakthrough in Latin America,” PRI, November 5, 2020, https://www.pri. org/stories/2020-­1 1-­0 5/building-­b ogot-­m etro-­c hina-­m akes-­n ew­breakthrough-­latin-­america. 88. “Delays have hit Chile’s Chacao Bridge project,” World Highways, August 28, 2013, https://www.worldhighways.com/wh10/news/delays-­have­hit-­chiles-­chacao-­bridge-­project. 89. Juan Manuel Villagrán and Carolina Pizarro, “Inversión china alista 17 nuevos proyectos en Chile,” La Tercera, November 28, 2020, https:// www.latercera.com/pulso/noticia/inversion-­china-­alista-­17-­nuevos-­ proyectos-­en-­chile/2I7DRM6AIZANPEC3SAEUQ3G5NA/. 90. Tamara Rojas, “Metro de Santiago inicia licitación para los trenes de futura Línea 7,” BioBio.cl, January 29, 2021, https://www.biobiochile. cl/noticias/nacional/region-­metropolitana/2021/01/29/metro-­de-­ santiago-­inicia-­licitacion-­para-­los-­trenes-­de-­futura-­linea-­7.shtml. 91. Aquino, 2021. 92. Pablo Hernandez, “Chinese-backed Mayan train chugs ahead despite environmental fears,” Dialogo Chino, July 24, 2020, https://dialogochino.net/en/infrastructure/36609-­m ayan-­t rain-­a dvances­with-­chinese-­support/. 93. Patricia Vicente Rua, “UPDATE 2-Mota-Engil near deal to sell 30% stake to China’s CCCC,” Reuters, August 27, 2020, https://www.reuters. com/article/mota-­engil-­cccc-­stake-­idUSL8N2FT2LP. 94. See “Así avanza en América Latina la estratégica red de puertos que controla China,” BBC News, October 16, 2021, https://www.lanacion.com. ar/el-­m undo/como-­a vanza-­e n-­a merica-­l atina-­l a-­e strategica-­r ed-­d e-­ puertos-­que-­controla-­china-­nid16102021/. 95. R. Evan Ellis, “The Future of Brazil – China Relations in the Context of Covid-19” Global Americans, September 18, 2020, https://theglobal-

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americans.org/2020/09/the-­f uture-­o f-­b razil-­c hina-­r elations­in-­the-­context-­of-­covid-­19/. 96. “Cosco Shipping Ports inks deal to build $3bn port in Chancay, Peru,” Seatrade Maritime News, May 15, 2019, https://www.seatrade-­maritime. com/americas/cosco-­s hipping-­p or ts-­i nks-­d eal-­b uild-­3 bn-­p or t-­ chancay-­peru. 97. “DP World completes first stage of $1.2bn Ecuador megaport,” 2019. 98. “Big time Chinese investor in Panama under probe cloud,” Newsroom Panama, June 15, 2020, https://www.newsroompanama.com/business/big-­time-­chinese-­investor-­in-­panama-­under-­probe-­cloud. 99. Ellis, “China’s Advance in Panama: An Update,” 2021. 100. Ken Dilanian and Joel Seidman and Gabriel Sanchez, “A project in El Salvador shows how China is exerting its growing power in America’s backyard,” NBC News, September 4, 2021, https://news.yahoo.com/ project-­el-­salvador-­shows-­china-­083039233.html. 101. “Honduran ‘dry canal’ nears completion,” The Economist, September 24, 2018, http://country.eiu.com/article.aspx?articleid=1607173544. 102. “Chinese firm now has full control of Kingston Freeport management company,” NY CaribNews, April 25, 2020, https://www.nycaribnews. c o m / a r t i c l e s / c h i n e s e -­f i r m -­t a k e s -­o v e r-­k i n g s t o n -­f r e e p o r t -­ management-­company/. 103. Ellis, “Chinese Engagement with the Dominican Republic  – An Update,” 2021. 104. “China firm for preliminary study of Berbice River deep water port,” Stabroek News, March 19, 2015, https://www.stabroeknews. com/2015/03/19/news/guyana/china-­firm-­for-­preliminary-­study-­of-­ berbice-­river-­deep-­water-­port/. 105. “CGX pushes ahead with Berbice Deep Water Project; set to cost US$130M,” Kaieteur News, February 11, 2021, https://www.kaieteurnewsonline.com/2021/02/11/cgx-­pushes-­ahead-­with-­berbice-­ deep-­water-­project-­set-­to-­cost-­us130m/. 106. “El Estado volverá a administrar la Hidrovía desde la próxima semana,” El Teritorio, September 4, 2021, https://www.elterritorio.com.ar/ noticias/2021/09/04/718628-­e l-­e stado-­v olvera-­a -­a dministrar-­l a-­ hidrovia-­desde-­la-­proxima-­semana. 107. “China competes in the dredging of Paraguay/Parana Waterway which handles 90  million tons of grains,” MercoPress, November 25, 2020, https://en.mercopress.com/2020/11/25/china-­c ompetes-­i n-­t he-­ dredging-­of-­paraguay-­parana-­waterway-­which-­handles-­90-­million-­tons-­ of-­grains. 108. Dan Collyns, “Hidrovía Amazónica respaldada por China inmersa en información turbia,” Dialogo Chino, September 13, 2019, https://

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dialogochino.net/es/infraestructura-­es/30190-­hidrovia-­amazonica-­ respaldada-­por-­china-­inmersa-­en-­informacion-­turbia/. 109. “China Stakes Its Claim in Latin American Energy,” 2021. 110. “China Stakes Its Claim in Latin American Energy,” 2021, p. 5. 111. Graham Allison, Kevin Klyman, Karina Barbesino, and Hugo Ye, The Great Tech Rivalry: China vs the U.S., Harvard University, December 2021, https://www.belfercenter.org/publication/great­rivalry-­china-­vs-­us-­21st-­century. 112. Ellis, “Chinese Engagement with Bolivia,” 2016. 113. Ellis, “New Directions in the Deepening of China-Argentine Engagement,” 2021. 114. “China Three Gorges Brasil Invests USD 573  million in Hydro Plants Upgrade,” China-Lusophone Brief, July 8, 2021, https://www.clbrief. com/china-­three-­gorges-­brasil-­invests-­usd-­573-­million-­in-­hydro-­plants-­ upgrade/. 115. Sadhana Shenvekar, “The Project Cluster Invested by Goldwind in Argentina Has Fully Come into Commercial Operation,” Wind Insider, June 11, 2021, https://windinsider.com/2021/06/11/the-­ project-­cluster-­invested-­by-­goldwind-­in-­argentina-­has-­fully-­come-­into-­ commercial-­operation/. 116. “Goldwind Advances in Brazil’s Wind Power,” World Energy, November 2, 2020, https://www.world-­energy.org/article/13499.html. 117. Colin P, “Sinovel Wind Group to Build Turbine Factory in Brazil,” My Windpower System, November 3, 2011, https://www.mywindpowersystem.com/2011/11/03/sinovel-­w ind-­g roup-­t o-­b uild-­t urbine­factory-­in-­brazil/. 118. Eric Ailworth, “Chinese Firm Found Guilty of Stealing Wind Technology from U.S. Supplier,” The Wall Street Journal, June 24, 2018, https:// www.wsj.com/articles/chinese-­f irm-­f ound-­g uilty-­o f-­s tealing-­w ind-­ technology-­from-­u-­s-­supplier-­1516829326. 119. “China Stakes Its Claim in Latin American Energy,” 2021, p. 12. 120. “EDP Opens in Brazil its Largest Solar Park Worldwide,” China-­ Lusophone Brief, October 11, 2021, https://www.clbrief.com/edp­opens-­in-­brazil-­its-­largest-­solar-­park-­worldwide/. 121. “USD 1Bi Solar Energy Complex in Brazil to be Built by China’s CDIL and CMEC,” China-Lusophone Brief, May 4, 2021, https://www.clbrief. com/usd-­1bi-­solar-­energy-­complex-­in-­brazil-­to-­be-­built-­by-­chinas-­cdil-­ and-­cmec/. 122. “Colombian president Officially Opens Trina Solar Plant,” Trina Solar official press release, January 27, 2021, https://www.prnewswire.com/ news-­r eleases/colombian-­p resident-­o f ficially-­o pens-­t rina-­s olar-­ plant-­301215932.html.

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123. Muyu Xu and Florence Tan, “China’s SPIC buys Mexican renewable power firm Zuma Energia,” Reuters, November 19, 2020, https://www. nasdaq.com/articles/chinas-­spic-­buys-­mexican-­renewable-­power-­firm-­ zuma-­energia-­2020-­11-­19-­0. 124. “China Stakes Its Claim in Latin American Energy,” 2021, p. 6. 125. “Mexico plans crackdown on private electricity market,” Financial Times, December 21, 2019, https://www.ft.com/content/ c7e4d878-­21f4-­11ea-­b8a1-­584213ee7b2b. 126. “Argentina reveals its nuclear new build plans,” World Nuclear News, 24 August 2021, https://www.world-­nuclear-­news.org/Articles/ Argentina-­reveals-­its-­nuclear-­new-­build-­plans. 127. Anthony Boadle, “Brazil narrows field to China, Russia, France for Angra 3 nuclear partner,” Reuters, October 23, 2019, https://www.reuters. com/article/us-­brazil-­nuclear-­idUSKBN1X22EA. 128. “Lula Retains Solid Lead Over Bolsonaro for 2022 Brazil Race, Poll Shows,” US News, September 17, 2021, https://www.usnews. com/news/world/articles/2021-­09-­17/lula-­r etains-­solid-­lead-­over-­ bolsonaro-­for-­2022-­brazil-­race-­poll-­shows. 129. Becard et al., 2020, p. 96. 130. For a detailed account of early State Grid operations in Brazil, see Alexandre de Freitas Barbosa, Angela Cristina Tepasse and Marina Neves Biancalana, “Las relaciones economicas entre Brasil y China a partir del desempeno de las empresas State Grid y Lenovo,” in China en America Latina: 10 casos de estudio, Enrique Dussel Peters, ed. (Mexico City: Red China-­ALC, 2014), pp. 78–86. 131. Charlie Zhu and Michelle Chen, “China’s State Grid to buy Brazil assets from Spain’s ACS,” Reuters, May 29, 2012, https://www.reuters.com/ article/us-­state-­grid-­brazil-­idUSBRE84S0C520120529. 132. Becard et al., 2020, p. 94. 133. “State Grid wraps up CPFL Renováveis acquisition,” LatinFinance, November 28, 2018, https://www.latinfinance.com/ daily-­b riefs/2018/11/28/state-­g rid-­w raps-­u p-­c pfl-­r enov%C3% A1veis-­acquisition. 134. “China State Grid Brazilian Subsidiary Wins USD 525  million Privatization,” China-Lusophone Brief, July 20, 2021, https://www. clbrief.com/china-­state-­grid-­brazilian-­subsidiary-­wins-­usd-­525-­million-­ privatization/. 135. “China Stakes Its Claim in Latin American Energy,” 2021, p. 7. 136. “China Yangtze lanzó oferta pública por 13,68% de acciones de Luz del Sur,” Valora Analitik, January 26, 2021, https://www.valoraanalitik. com/2021/01/26/china-­yangtze-­lanzo-­oferta-­publica-­por-­13-­68-­de-­ acciones-­de-­luz-­del-­sur/.

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137. “China Stakes Its Claim in Latin American Energy,” 2021, p. 6. 138. “China Stakes Its Claim in Latin American Energy,” 2021, p. 6. 139. “Chile regulator approves $3  billion Chinese takeover of Naturgy unit,” Reuters, March 30, 2021, https://www.reuters.com/article/ us-­naturgy-­m-­a-­chile-­idUSKBN2BN3H2. 140. Valentina Fuentes “Chilean Lawmakers Push for Restrictions on Chinese Buying Spree,” Bloomberg, December 14, 2020, https://www.bloomberg.com/news/articles/2020-­1 2-­1 4/chilean-­l awmakers-­p ush-­f or­restrictions-­on-­chinese-­buying-­spree. 141. “UTE firmó contrato para el cierre del anillo de transmisión del norte, obra clave en el período,” El País, May 31, 2021, https://negocios. elpais.com.uy/ute-­firmo-­contrato-­cierre-­anillo-­transmision-­norte-­obra-­ clave-­periodo.html. See also Ellis, “Uruguay exemplifies how to deal with China,” 2021. 142. Stephen Gibbs, “Energy pact sees Cuba sign up to China’s Belt and Road Initiative,” The Times, October 19, 2021, https://www.thetimes.co.uk/ article/27902884-­3041-­11ec-­820f-­e2be9b2cb5fd?shareToken=713d ca073c96e4a275f20126bb55b8f0. 143. Enrique Dussel Peters, “La inversión extranjera directa de China en Mexico. Los casos de Huawei y Giant Motors de Latinoamérica,” China en America Latina: 10 casos de estudio, Enrique Dussel Peters, ed. (Mexico City: Red China-ALC, 2014), pp. 299–307. 144. R. Evan Ellis, “Peru’s Multidimensional Challenge – Part 3: engagement with China,” Global Americans, November 20, 2020, https://theglobalamericans.org/2020/11/per us-­m ultidimensional-­c hallenge­part-­3-­engagement-­with-­china/. 145. Ellis, “Peru’s Multidimensional Challenge – Part 3,” 2020. 146. Liu Yang, “Entel: Transforming Bolivia into a Nexus of Communication in South America,” ZTE official website, September 26, 2019, https:// www.zte.com.cn/global/about/magazine/zte-­technologies/2019/5-­en/ VIP-­Voices/2.html. 147. “Huawei donates 1000 internet devices to Guyana,” Stabroek News, November 23, 2021, https://www.stabroeknews.com/2021/11/23/ news/guyana/huawei-­donates-­1000-­internet-­devices-­to-­guyana/. 148. Luiza Duarte, “Latin America: China’s Huawei Maintains its Foothold,” AULA Blog, November 19, 2021, https://aulablog.net/2021/11/19/ latin-­america-­chinas-­huawei-­maintains-­its-­foothold/. 149. Lisandra Paraguassu, “Brazil looks for legal options to ban China’s Huawei from 5G: sources,” Reuters, December 8, 2020, https://www. reuters.com/article/brazil-­huawei-­tech/brazil-­looks-­for-­legal-­options-­ to-­ban-­chinas-­huawei-­from-­5g-­sources-­idUSKBN28I2F5, Brazil looks for legal options to ban China’s Huawei from 5G: sources | Reuters

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150. “Brazil’s Bolsonaro to allow China’s Huawei in 5G auctions: newspaper,” Reuters, January 16, 2021, https://www.reuters.com/article/us-­brazil-­ huawei-­tech/brazils-­bolsonaro-­to-­allow-­chinas-­huawei-­in-­5g-­auctions-­ newspaper-­idUSKBN29L0JM. 151. Ellis, “Uruguay exemplifies how to deal with China,” 2021. 152. Vaughan O’Grady, “Huawei continues data centre drive in Latin America,” Developing Telcoms, August 26, 2021, https://developingtelecoms.com/telecom-­technology/data-­centres-­networks/11778-­huawei-­ continues-­data-­centre-­drive-­in-­latin-­america.html. 153. Submarine Telecoms Forum website, Accessed September 3, 2021, https://subtelforum.com/98huawei-­m arine-­a nd-­g lobal-­m arine-­ systems-­c omplete-­c onstruction-­o f-­t he-­s uriname-­g uyana-­s ubmarine-­ cable-­system/. 154. Angus Berwick, “How ZTE helps Venezuela create China-style social control,” Reuters, November 14, 2018, https://www.reuters.com/ investigates/special-­report/venezuela-­zte/. 155. “Huawei Technologies to conduct new assessment of E-Government Unit,” DPI, November 17, 2016, https://dpi.gov.gy/huawei-­ technologies-­to-­conduct-­new-­assessment-­of-­e-­government-­unit/. 156. Sarah Zheng, “China’s Huawei loses out to Japan’s NEC on Chile-Asia trans-Pacific cable project,” South China Morning Post, July 30, 2020, https://www.scmp.com/news/china/diplomacy/article/3095367/ chinas-­huawei-­loses-­out-­japans-­nec-­chile-­asia-­trans-­pacific. 157. Atha, Katherine, Jason Callahan, John Chen, et al. “China’s Smart City Development”, U.S.-China Economic and Security Review Commission. Last Modified January 2020. China’s Smart Cities Development | U.S.-­ CHINA | ECONOMIC and SECURITY REVIEW COMMISSION (uscc.gov) 158. Jonathan Hillman and Maesea McCalpin, “Watching Huawei’s ‘Safe Cities’,” CSIS, November 4, 2019, https://www.csis.org/analysis/ watching-­huaweis-­safe-­cities. 159. Paul Mozur, Jonah M.  Kessel and Melissa Chan, “Made in China, Exported to the World: The Surveillance State,” The New  York Times, April 2019, https://www.nytimes.com/2019/04/24/technology/ ecuador-­surveillance-­cameras-­police-­government.html. 160. R.  Evan Ellis, “Chinese Surveillance Complex Advancing in Latin America,” Newsmax, April 12, 2019, https://www.newsmax.com/ evanellis/china-­s urveillance-­l atin-­a merica-­c ameras/2019/04/12/ id/911484/. 161. “Made in China, Exported to the World: The Surveillance State,” April 24, 2019, The New  York Times, https://www.nytimes. com/2019/04/24/technology/ecuador-­surveillance-­cameras-­police-­ government.html.

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162. For a more detailed discussion, see Ellis, “Chinese Surveillance Complex,” 2019. 163. Sergio Held, “Panama hails Chinese help in containing outbreak,” China Daily, April 14, 2020, https://www.chinadaily.com.cn/a/202004/14/ WS5e950b3aa3105d50a3d15ef7.html. 164. Ellis, “China’s Advance in Panama: An Update,” 2021. 165. See “About us,” China Great Wall Industry Corporation official website, accessed October 10, 2021, http://www.cgwic.com/about/index.html. 166. Daniel Mendez Moran, El plan de China en America Latina, (2018), pp. 216–226. 167. See R.  Evan Ellis, “New Frontiers? China-Latin America Space Cooperation,” Security and Defense Studies Review, Center for Hemispheric Defense Studies, Vol. 10. January–June 2010, pp. 123–130. 168. Hu Chao and Liu Yu, “China and Brazil launch new Earth resource satellite,” CGTN, December 24, 2019, https://news.cgtn.com/ news/2019-­12-­20/China-­successfully-­launches-­CBERS-­04A-­satellite-­ into-­orbit%2D%2DMzFeJmqaK4/index.html. 169. “Brazil and US Sign Agreement on Use of Alcântara Launch Center,” Dialogo, January 17, 2020, https://dialogo-­americas.com/articles/ brazil-­a nd-­u s-­s ign-­a greement-­o n-­u se-­o f-­a lcantara-­l aunch-­c enter/#. YWLppGLMKUk. 170. Rui C. Barbosa, “China launch VENESAT-1 – debut bird for Venezuela,” NASA Spaceflight, October 29, 2008, https://www.nasaspaceflight. com/2008/10/china-­l aunch-­v enesat/#:~:text=China%20has%20 launched%20Venezuelan%E2%80%99s%20first%20satellite%2C%20 Simon%20Bolivar,Launch%20Center%20in%20Sichuan%20Province%20 at%2016%3A53%20UTC. 171. Deyana Goh, “China launches Venezuelan remote sensing satellite VRSS-2,” SpaceTech, October 9, 2017, https://www.spacetechasia.com/ china-­launches-­venezuelan-­remote-­sensing-­satellite-­vrss-­2/. 172. “Venesat-1 program,” China Great Wall Industry Corporation, official website, accessed October 10, 2021, http://www.cgwic.com/ CommunicationsSatellite/project.html. 173. Peter B. de Selding, “China Launches Bolivia’s First Telecom Satellite,” SpaceNews, December 23, 2013, https://spacenews.com/38800china­launches-­bolivias-­first-­telecom-­satellite/. 174. J.  Alexis Andrade Romero, “Bolivia´s National Satellite Program Tupac Katari I,” PowerPoint presentation, Agencia Boliviana Espacial, accessed October 10, 2021, https://www.itu.int/en/ITU-­R/space/ workshops/2017-­B ariloche/Presentations/33%20-­% 20Alexis%20 Andrade%20Romero%20-­%20ABE%20Bolivia.pdf.

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175. “Darán beca a 74 técnicos para manejo de satélite,” Noticias de Universidades de Bolivia, July 26, 2012, https://www.universidadesbol. com/2012/07/daran-­beca-­74-­tecnicos-­para-­manejo-­de.html. 176. “Ecuador Pegasus satellite fears over space debris crash,” BBC, May 24, 2013, https://www.bbc.com/news/world-­latin-­america-­22635671. 177. Valentino Gonzalez, “Importantes Agencias Chinas de Noticias Visitan los Observatorio ALMA y Paranal,” Chinese Academy of Sciences South American Center for Astronomy, oficial website, August 4, 2015, http://www.cassaca.org/es/uncategorized-­es/2015/08/importantes-­ agencias-­chinas-­de-­noticias-­visitan-­los-­observatorio-­alma-­y-­paranal/. 178. Ellis, “China’s Diplomatic and Political Approach in Latin America and the Caribbean,” 2021. 179. Daniel Mendez Moran, El plan de China en America Latina, (2018), pp. 284–294. 180. Cassandra Garrison, “China’s military-run space station in Argentina is a ‘black box’,” Reuters, January 31, 2019, https://www.reuters.com/ article/us-­space-­argentina-­china-­insight-­idUSKCN1PP0I2. 181. “The China Argentina Observational Station (NAOC),” National Astronomical Observatories of China National Academy of Sciences, official website, January 2021, http://english.nao.cas.cn/Research2015/ Research_Divisions2015/radio/202101/t20210119_262001.html. 182. “Presentaron proyecto de tecnología aeroespacial a instalarse en Parque Industrial de Río Gallegos,” Government of the Province of Santa Cruz, Argentina, oficial website, May 19, 2021, https://noticias.santacruz. gob.ar/gestion/gobierno/item/19695-­p resentaron-­p royecto-­d e-­ tecnologia-­aeroespacial-­a-­instalarse-­en-­parque-­industrial-­de-­rio-­gallegos. 183. “China  – CELAC Joint Action Plan for Cooperation in Key Areas (2022–2024),” Ministry of Foreign Affairs of the People’s Republic of China, December 7, 2021, https://www.fmprc.gov.cn/mfa_eng/ wjb_663304/zzjg_663340/ldmzs_664952/xwlb_664954/202112/ t20211207_10463459.html. 184. “ICBC gets approval for Argentine Standard Bank takeover,” Reuters, November 11, 2012, https://www.reuters.com/article/ us-­standardbank-­argentina-­idUSBRE8A90IP20121111. 185. “Chinese Banks Expand in Brazil Eyeing Infrastructure,” Haitong, official website, Accessed September 5, 2021, http://www.haitongib.com. br/en/news/sao-­paulo/banco-­chines-­amplia-­atuacao-­no-­brasil. 186. See, for example, Zhang Yong, “Analysis of the Cooperation Patterns of China and Latin America in the Response to the International Financial Crisis,” Xu Shicheng. “Analysis of Chinese Scholars on Latin American Left-­Wing Government’s Policies,” in China-Latin America Relations:

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Review and Analysis (Volume 1), He Shuangrong, Ed. (Beijing: Paths International, Ltd., 2011), pp. 82–84. 187. See, for example, Leonardo E.  Stanley, “El proceso de internacionalización del RMB y el nuevo protagonismo del sistema financero chino,” in America Latina y El Caribe – China: Economa, Comercio e Inversiones, Enrique Dussel Peters, Ed., (Mexico City: Red China-ALC, 2013). 188. “Central Bank renews currency swap deal with China for another three years,” Buenos Aires Times, August 7, 2020, https://www.batimes.com. ar/news/economy/central-­b ank-­r enews-­c urrency-­s wap-­d eal-­w ith-­ china-­for-­another-­three-­years.phtml. 189. “Bank of China expands in Brazil following 30bn dollars swap agreement,” Mercopress, July 3, 2012, https://en.mercopress. com/2012/07/03/bank-­of-­china-­expands-­in-­brazil-­following-­30bn-­. 190. “Brazilian fintech backed by China’s Tencent Holdings on way to region’s largest listing,” China-Lusophone Brief, December 13, 2021, https:// www.clbrief.com/brazilian-­fintech-­backed-­by-­chinas-­tencent-­holdings-­ on-­way-­to-­regions-­largest-­listing/. 191. “China’s Fosun Group acquires Brazilian Asset Manager,” Paul Hastings, official website, March 2, 2018, https://www.paulhastings.com/news/ news-­chinas-­fosun-­group-­acquires-­brazilian-­asset-­manager. 192. “China’s Fosun to reduce stakes in two Brazilian financial firms: source,” Reuters, January 14, 2020, https://www.reuters.com/article/ us-­fosun-­divestiture-­brazil-­idUSKBN1ZE046. 193. R. Evan Ellis, “DiDi and the Risks of Expanding Chinese E-Commerce in Latin America,” Global Americans, September 2, 2021, https://theglobalamericans.org/2021/09/didi-­a nd-­t he-­r isks-­o f-­e xpanding-­ chinese-­e-­commerce-­in-­latin-­america/. 194. Phate Zheng, “Didi’s market share in Latin America approaches 50%,” CNTech, November 19, https://cntechpost.com/2020/11/19/ didis-­market-­share-­in-­latin-­america-­approaches-­50/. 195. Ellis, “DiDi and the Risks of Expanding Chinese E-Commerce in Latin America,” 2021. 196. Sergio Held, “How Didi is going places in Latin America,” China Daily, March 3, 2020, http://global.chinadaily.com.cn/a/202003/03/ WS5e5db5a0a31012821727bcf8.html. 197. “Chile: la plataforma que busca China para insertarse en América Latina,” El Mostrador, August 16, 2021, https://www.elmostrador.cl/ destacado/2021/08/16/chile-­l a-­p lataforma-­q ue-­b usca-­c hina­para-­insertarse-­en-­america-­latina/. 198. “China  – CELAC Joint Action Plan for Cooperation in Key Areas (2022–2024),” Ministry of Foreign Affairs of the People’s Republic of China, December 7, 2021, https://www.fmprc.gov.cn/mfa_eng/

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wjb_663304/zzjg_663340/ldmzs_664952/xwlb_664954/202112/ t20211207_10463459.html. 199. Isabel Matos, “CLAP: Venezuela’s Desperate Try to Feed Its Population,” Crowd H News, March 13, 2018, https://www.crowdh.com/ clap-­venezuela-­try-­feed-­population/. 200. Florantonia Singer, “‘Sistema Patria’: A new digital tool for social control in Venezuela,” El país, April 24, 2021, https://english.elpais.com/ usa/2021-­04-­24/sistema-­patria-­a-­new-­digital-­tool-­for-­social-­control-­in-­ venezuela.html. 201. Jack Dutton, “Is China Behind Cuba’s Protests Being Censored? How Beijing Could be Linked,” Newsweek, July 12, 2021, https://www.newsw e e k . c o m / c h i n a -­b e h i n d -­c u b a -­p r o t e s t s -­c e n s o r e d -­b e i j i n g ­linked-­1608771. 202. “Cuba welcomes new internet cable link with Venezuela,” BBC, February 10, 2011, https://www.bbc.com/news/world-­latin-­america-­ 12411845. 203. Leland Lazarus and Evan Ellis, “How China Helps the Cuban Regime Stay Afloat and Shut Down Protests,” The Diplomat, August 3, 2021, https://thediplomat.com/2021/08/how-­c hina-­h elps-­t he-­c uban-­ regime-­stay-­afloat-­and-­shut-­down-­protests/. 204. Samuel Chamberlain, “‘There is a terrible fear’: Inside Cuba’s crackdown after dramatic protests,” New  York Post, August 10, 2021, https:// n y p o s t . c o m / 2 0 2 1 / 0 8 / 1 0 / i n s i d e -­c u b a s -­c r a c k d o w n -­a f t e r­dramatic-­protests/. 205. Mozur, Kessel, and Chan, 2019.

CHAPTER 5

Chinese Soft Power

Overview The prevailing wisdom is that US soft power is far greater than Chinese soft power in Latin America. Yet depending on how it is measured, Chinese soft power in Latin America and the Caribbean is not necessarily less than US soft power.1 Consistent with the discussion in Chap. 2, the present chapter examines Chinese soft power in Latin America along three axes: cultural affinity, influence associated with the expectation of benefit, PRC educational outreach and other “people-to-people” diplomacy, engagement with ethnic Chinese communities in the region, and PRC attempts to influence through the Latin American media, both overtly and indirectly. This chapter further examines China’s efforts at Covid-19 medical diplomacy as a special case of an attempt to exercise “soft power.” Consistent with the thesis advanced in Chap. 2, its examination of Chinese soft power in Latin America and the Caribbean finds that expectation of benefit and the fear of its loss is the principal instrument of Chinese soft power in the region and is substantial in scope.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_5

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Cultural Affinity Toward the PRC in Latin America and the Issue of Trust In Latin America, as elsewhere in the world, substantial distrust exists toward the PRC, its contemporary leadership, its political system and policies, and the style and actions of its companies. That distrust connects to a historically rooted perception of the “otherness” of Chinese communities within Latin America and the Caribbean, the aggressive practices of Chinese businesses as they have engaged with the region, news accounts reaching the region regarding PRC activities to control domestic expression and dissent, and the Chinese government’s actions in Hong Kong, Xinjian, and the South and East China Sea, among other areas. It also has been deepened by reporting of the origins in Wuhan of the Covid-19 pandemic2 and Chinese attempts to suppress World Health Organization reports on and investigations into origins of the virus.3 In the 2018 Latinobarometer poll, for example, the region was divided in its opinions regarding the PRC, with only 56.1% of the population having a “good” or “very good” opinion toward the PRC.4 Similarly, in PEW research polls, for example, among the two Latin American countries included in the sample, 30% of Mexicans and 29% of Brazilians surveyed saw Chinese investment in their countries negatively, although a figure lower than in higher-income countries.5 With respect feelings about the United States, by comparison, a far greater number of persons in Latin America and the Caribbean have relatives in the country, than have relatives in China. Many more people in the region speak at least some English, than speak Mandarin Chinese or other dialects. Many people in Latin America have had some exposure to US culture through music, television shows, school, social media, and other sources. Similarly, a far greater portion of Latin American business and political elites have attended school or other programs in the United States, versus the number who have attended school in the PRC. Indeed, the miniscule number of Latin Americans who have lived or studied in the PRC, or who speak Mandarin or can read Chinese characters, gives an outsized amount of influence to the few businesses, academic and other elites who have, and who make public representations of what China is about to Latin American audiences. Within Latin America, as in other parts of the world, due to the lack of knowledge and historic lack of family and commercial ties with the region, China is largely perceived in the region through vaguely defined perceptions of mystery, threat, romance, and opportunity.

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While programs for studying Chinese and the Mandarin language have expanded in Latin America and the Caribbean in recent years, its 39 Confucius Institutes and 18 associated Confucius classrooms for the official teaching of Chinese language and culture (renamed “Centers for Language Education Cooperation” in June 2021) pales in comparison to the almost ubiquitous offering of English and US-related studies in both public and private institutions in the region, or reciprocally, the 103 Confucius Institutes in the United States, as of 2017,6 even though the position of Confucius institutes in the United States has come under attack in recent years.7 China’s historically rooted belief in the attractiveness and power of its culture in support of its engagement with others has led it to include cultural engagements and promotion as a cornerstone of its engagement in Latin America and the Caribbean, as reflected in the 2008 and 2016 China–Latin America policy white papers.8 Chinese cultural engagement events have been a regular part of PRC engagement in Latin America and the Caribbean in the past two decades and before.9 Indeed, culture promotion and awareness events are cited by both Chinese and PRC-oriented Latin American scholars as important vehicles for increasing cooperation in the region.10 The general familiarity with and goodwill toward the United States, its culture, democratic system, advocacy of human rights, and aid to the region that gave the United States certain soft power advantages was undercut to some degree by the language and style employed by President Trump toward Latin America and its people.11 The partial loss of warmth toward and faith in the United States during the Trump administration did not necessarily represent an abandonment by Latin Americans in the idea of democracy or the importance of human rights, but rather, a disappointment in or disillusionment with the “America First” posture of the administration and its transactional approach toward the region. The result was the expansion of mistrust toward the United States that, to some degree, offset the restraining influence of the region’s distrust toward the PRC, freeing up the region’s business and political leaders to more fully embrace the economic opportunities that the latter offered.

Expectations of Benefit as Chinese Soft Power in the Americas The power of the expectation of benefits is a vehicle for Chinese soft power in the region, although not all scholars regard such expectations as soft power. Aside from the dispute over how to categorize the impact of such expectations, their power centers around perceptions and expectations, as much as current realities. In addition, they involve hopes for personal

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benefits, as much as those to one’s company or the nation. For some scholars, one influence of China is as a development model. As one scholar put it, “China as a model of what a poor country can do in a few short decades.”12 Expanding PRC trade with, loans to, and investment in Latin America and the Caribbean is the driver for its expectations-based soft power.13 As noted previously, in the past 20 years, PRC-based companies have invested $160 billion in the region,14 although by the end of 2021, the insolvency of Chinese real estate giant Evergrande and problems in the Chinese electricity generation sector had raised serious questions about the country’s level of continuing investments abroad.15 With respect to loans, China’s two principal policy banks alone, China Development Bank and China Export-Import Bank, have together loaned over $136 billion.16 In the same time, Chinese bilateral trade with the region has reached $330 billion in 2019, before falling off to $312 billion in 2020 due to the Covid-19 pandemic.17 Although US bilateral trade with the region, by comparison, was $709 billion for 2020, and generally had bilateral trade balances more favorable with individual countries of the region, China was the number one or number two trading partner of virtually every country in the region south of Central America.18 Moreover, the power of China’s trade to motivate attention and cooperation by Latin American businesspersons and political leaders is based on perceptions about where those numbers are trending in the future, and ability of the PRC government to steer its purchases of Latin American commodities and other goods to partners aligned with its initiatives such as the Belt and Road Initiative, or not criticizing the PRC government on issues such as its behaviors in Xinjiang, Hong Kong, Tibet, or other matters. In 2004, when the then Chinese President Hu Jintao grabbed the attention of Latin American elites with his promise of $100 billion in trade or investment in the region over the following 10 years, the interest his words stirred arose from future possibilities, not levels of Chinese trade or investment, which were at the time relatively modest. China’s population of 1.4 billion naturally inspires dreams of the opportunities it could generate if only a small portion would buy the products of the Latin American country or vendor in question. Ecuadoran banana magnate Segundo Wong, for example, was known for his expression that if every person in China would eat just one Ecuadoran banana once a week, Ecuador would become an enormously wealthy nation.19 At the political level, respected Central American statesman Oscar Arias was reportedly so convinced that the future of Costa Rica depended on recognizing the PRC rather than Taiwan, that he engaged in a year of

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secret diplomacy leading up to Costa Rica’s May 2007 surprise diplomatic switch from Taiwan to the PRC.20 Similarly, Panamanian President Juan Carlos Varela, who had been exposed to China during his time in the Panamanian Foreign Ministry, highlighted the “great opportunity” he saw in the PRC as a driving factor in his move to switch Panama’s diplomatic relations from Taiwan to the PRC.21 In Mexico, the government of Andres Manuel Lopez Obrador, which had historically been relatively cautious toward China, surprised the country when it made an unprovoked public apology to China, during a speech in Torrejon,22 referring to a massacre of ethnic Chinese in Mexico that had occurred during the revolutionary era.23 Despite concerns about Chinese behavior in places like Xinjiang and Tibet, antidemocratic practices at home, cyberespionage,24 and other issues, the lure of Chinese markets and resources tempts Latin American elites to frame the question of China in terms of a struggle between two powers in which they are merely caught in the middle without moral imperative or consequences of their actions, thus freed to simply think of how the region can profit by selling the PRC more of its goods.25 Even the conservative, relatively pro-US government of Lacalle Pou was so enamored by the prospects of expanded trade with the PRC that in 2021, they pursued bilateral negotiations for a Free Trade Agreement with the PRC, even though doing so was superficially in violation of the commitments of their regional trade organization MERCOSUR, and threatened to create tensions with their closest trade partners and jeopardize the future of the organization.26 For Latin American politicians of a leftist populist orientation, the attraction of the PRC is not simply as an additional source of demand for the country’s products, or a source of loans and investments, but a vehicle for those governments to reduce their vulnerability to Western governments, institutions and investors which historically have withdrawn investment or imposed sanctions on them over policies which violate previous institutional, legal and constitutional frameworks, undermine democracy and human rights, repress opponents, or engage in corrupt or criminal behavior, as discussed in greater detail in Chap. 7. At times, those populist leaders have seen in China a political, as well as economic “ally.” When Bolivian leftist populist leader Evo Morales visited China for the first time, for example, he proclaimed himself to be a “great admirer” of Chinese revolutionary leader Mao Zedong,27 although among the group of pragmatic Chinese leaders in which he made the

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proclamation, Morales may have been the only person to feel that way. Similarly, Venezuelan populist leader Hugo Chavez, on signing an economic cooperation agreement with the PRC, proclaimed the act a “Great Wall against American hegemonism.”28 For a range of partners in the region beyond those strictly of an authoritarian populist bent, China’s proclaimed noninterference with the internal affairs of its partners is welcome for reasons that may involve both politics and opportunities for corruption that come from the absence of transparency and traditional oversight. In June 2021, for example, the left-oriented government of Keith Rowley in Trinidad and Tobago declared its intention to turn down a loan from the International Monetary Fund, going instead to China, accepting that it would consequently have to pay double the interest rate for the same loan, yet with the understanding that the Chinese loan would not be accompanied with the standard International Monetary Fund oversight requirements on how it was spent.29 As suggested by such example, at times, for Latin American leaders, the lure of benefit may also be personal. Ecuadoran journalist Fernando Villavicencio, in his book Ecuador Made in China, documents how contracts associated with Ecuador’s deals with China under the leftist populist administration of Rafael Correa benefited family members and friends associated with the president and his administration.30 In Panama, the government of Juan Carlos Varela was accused of taking $143 million in bribes to change relations from Taiwan to the PRC,31 although the allegations were never proven. Such benefits are often not limited merely to current officeholders, their families, and associates. Huawei, for example, hired former Brazilian President Michel Temer to represent PRC interests in its attempt to rollout 5G in Brazil,32 although such practices are not uncommon among Western businesses as well. In some cases, China’s use of economic carrots and sticks is overtly transactional. In its Covid-19 diplomacy, for example, the PRC used the desperation of Latin American governments for expedited access to vaccines to secure conditions from those countries. Major public examples include Brazil and the Dominican Republic, both of which reversed prior commitments to exclude the Chinese company Huawei from their telecommunications networks, as an apparent quid pro quo for obtaining vaccines.33 In Brazil, the Chinese also reportedly demanded the dismissal of publicly anti-Chinese foreign minister Araujo to facilitate vaccine access,34

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although it is not clear that Araujo’s subsequent dismissal35 was tied to such pressure. As with Latin American political leaders, its business elites have demonstrated a willingness to invest enormous amounts of personal time, and the resources of their companies, in learning about the PRC, establishing contacts there, and positioning their firms to sell to the Chinese market or make contact with partners in the PRC for deals with their own companies. At the grassroots level, PRC soft power is illustrated by the thousands of students in Latin America who increasingly choose to study Chinese politics, culture, business, and the enormously difficult Chinese character set and mandarin language based on the belief that doing so will yield important opportunities for the future,36 even if the number of students pales in consideration to those studying English, as previously noted, and even though not all who aspire to learn Mandarin and the Chinese character set succeed. If hope for benefits leads Latin American politicians, businesspersons, and others from the region to do certain things to realize those opportunities, it also induces them to refrain from saying or doing certain things, out of fear of losing such benefits. While it is difficult to identify specific things not done or said out of such fear, this author has personally heard from countless colleagues during the 18 years he has worked on this topic, confessing to such self-censorship or self-restraint to avoid offending the Chinese, sometimes on minor issues, and other times on items of greater importance. The collective result is that the relatively small groups of academic, business elites, and consultants in the region who are most knowledgeable about the PRC, out of fear of losing their future access, other benefits, or simply seeming ungrateful to their Chinese friends, colleagues, and benefactors, temper their speech and refrain from the contributions that could most help their societies understand the nature of the Chinese threat, or how groups in their countries and government can best work together to obtain what their countries they need from the PRC. While China historically has not often made overt threats of retribution for those who speak out or work against it, its de facto vindictive nature can be seen in multiple instances, which are understood in the region. One of the most clear-cut cases of Chinese retribution occurred in Argentina in April 2010. Responding to repeated actions by Argentina’s Congress in imposing anti-dumping measures and other actions against Chinese imports, the PRC-based agricultural purchasing giant COSCO, unilaterally suspended a $2 billion per year stream of purchases of

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Argentine soy oil, claiming that double impurities in the oil, which had long been known but had not previously been a problem, were now deemed unacceptable.37 Within weeks of the PRC suspension of purchases of Argentine grain, the country’s then Foreign Minister Hector Timmerman went to the PRC to try to solve the impasse, but was unsuccessful. Shortly thereafter Argentine President Cristina Fernandez, who had canceled her February 2010 to China, found time to reschedule it for July. She went to China without publicly reproaching the PRC either for the protectionism found by her own legislature, or the soy oil cutoff, and, while in China, made new commitments to award almost $10 billion in infrastructure work in Argentina to a range of Chinese companies.38 Within weeks of the trip and Cristina’s respectful and accommodating behavior, COFCO resumed its soy oil purchases from Argentina. In the noneconomic sphere, following the Mexican government’s receipt of the Dali Lama during the sexenio of Felipe Calderon, the PRC reportedly froze talks on economic matters with Mexico for years.39 In Guyana, in February 2021, the recently elected government of Irfaan Ali announced the opening of a Taiwan representative office in the country.40 Within hours, apparently under enormous behind-the-scenes pressure from the PRC, the Ali government reversed itself on the move.41

Educational Diplomacy As of late 2021, as noted previously, the PRC had 39 Confucius Institutes and 18 lower-level “Confucius classrooms” in Latin America and the Caribbean, with the regional headquarters for the Institutes (CRICAL) located in Santo Tomas University in Vina del Mar, Chile.42 Of note, of the 39 institutes, six are located in the Caribbean, a relatively modest percentage, but significant when the very small size of the Caribbean’s population vis-à-vis the rest of the region is taken into account. While such institutes in the region are ideally located in major public universities, some have also been established in leading private ones such as Jorge Tadeo Lozano University in Bogota, or the Technological Institute of Santo Domingo (INTEC), generally as a function of the particular opportunities, constraints, and politics of the host country. Although Confucius Institutes have received much attention and criticism over their potential role as a PRC cultural diplomacy and propaganda tool,43 the relatively small number of Latin Americans directly graduating

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from Confucius Institutes illustrates that their primary function in the region is not the indoctrination of significant numbers of people or large-­ scale impacts on the politics of the country. Rather, the institutions serve to identify and recruit the handful of students in the region who are sufficiently motivated and gifted to learn Mandarin Chinese and the Chinese character set, and sufficiently disciplined to sustain the multi-year program required to master them. Confucius Institutes in Latin America have become the principal vehicle through which these youth are initially screened and the most promising brought to the PRC to study in Chinese institutions, under Hanban scholarships. Indeed, the 2015–2019 China-­ CELAC plan identified a goal of bringing approximately 6000 of the best qualified students in the region, to be brought to study in the PRC, funded by scholarships from its government.44 In the 2022–2024 China-­ CELAC plan, the PRC committed to an additional 5000 scholarships for Latin Americans to study in China and 3000 “training opportunities” for them in the country.45 As noted previously, because the number of Latin Americans who dominate the Chinese language and are familiar with its politics, business, and culture are so limited, such programs bringing Latin America’s China-­ facing elite to the PRC to study play a key role in giving them the tools to dominate next generation of business and government technocrats in the region, who will work in their government’s Ministries of Foreign Relations, Commerce, and leading companies, shaping how their governments and private sectors interface with the PRC.46 Key members of the Panamanian government team negotiating that nation’s Free Trade Agreement with the PRC, for example, had been educated on Hanban scholarships in China’s Fudan University.47 The role of the Chinese government to have shaped the perceptions of Latin America’s future China-facing elite in a positive fashion, evaluated them, and left them with a debt of personal and professional gratitude for the scholarships that have enabled their careers represents an extraordinarily important source of influence for the PRC.

Other People-to-People Diplomacy China’s “People-to-People” diplomacy, beyond just student exchanges, is a particularly important element of its influence in Latin America and the Caribbean, complementing the expectation of benefits and discrete sources of leverage. Such “people-to-people” diplomacy is referred to regularly by

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the Chinese media.48 The term was also included as part of “Xi Jinping Thought on Diplomacy” at the 18th National Congress of the Communist Party of China in late 2012 and is enshrined as a matter of fact in virtually all major Chinese engagements with the region.49 Chinese “people-to-people” diplomacy and the vehicles of influence associated with it take on various forms. In the political domain, the International Liaison Department of the Chinese Communist Party regularly brings Latin American government and party officials to the PRC for goodwill-building trips.50 Indeed, authors Linda Zhang and Ryan Berg note that between 2002 and 2017, the ILD held 300 meetings with representatives of 74 parties in 26 Latin American countries, bringing many over to the PRC to do so.51 Examples include trips by a substantial number of members of the Chilean parliament who have traveled to the PRC for such trips.52 While not every Latin American politician that the PRC government wines and dines in China ends up occupying an important position, by investing in a broad range of such figures, for a relatively modest cost, the PRC increases its likelihood of experience with, and positive feelings of, a broad range of leaders who can come to power in the region. A key example was the PRC outreach to Ollanta Humala before his unexpected election as President of Peru in June 2011. Humala’s previous invitation to China through his then relatively unknown Peruvian Nationalist Party (PNP) played an important role in the ability of the PRC to start off the relationship with Humala’s new administration on a positive footing. Beyond “party-to-party” diplomacy, a special category of ILD activities in the region is “Friendship Committees.” Following the CCP seizure of power in Mainland China in 1949, the ILD organized groups of influential persons in individual Latin American countries. Initially, the primary objective of these groups was to support diplomatic recognition of the PRC by these countries and otherwise promote a “friendly” orientation by their governments toward the PRC. As the majority of Latin America recognized the PRC, the “friendship committees” gradually evolved into groups for leveraging their ties to China to benefit economically. This included exporting products to the PRC, providing consulting services, and organizing business trips to, and courses about conducting business in the PRC. With respect to consultants and academics, it is the personal observation of the author with over 18  years following China-Latin America issues, that the vast majority of the most respected experts on China in

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Latin America have been brought to the PRC at one time or another to participate in a “think tank forum” or other activity sponsored by universities and other Chinese institutions whose ties to the PRC state are unclear.53 As with businessmen, the providing of trips to China and other benefits directly or indirectly from the PRC government does not automatically transform the beneficiaries into malleable sources of pro-Chinese propaganda. Rather, such trips over time foster a sense of goodwill and partnership in the recipient, who may come to see himself or herself as a trusted and knowledgeable interlocutor of the Chinese, receiving the investment of resources and knowledge from the PRC government, with the reciprocal obligation to tell China’s story with precision and help correct erroneous negative impressions by less knowledgeable foreigners. Such trips thus may not “brainwash” the recipient, but they subtly coopt him or her, inculcating a sense of importance and responsibility for having been recognized as special and trustworthy enough to have been brought “in.” In the process, such Chinese generosity generates subtle incentives to choose one’s subsequent public words carefully, and if not to “lie,” at least to not speak in an unnecessarily critical fashion, or otherwise offending their Chinese hosts. In this subtle fashion, PRC people-to-people diplomacy fosters self-censorship and self-restraint among those in the region most knowledgeable and best positioned to call out bad Chinese behaviors and associated risks to their country, or to organize informed efforts to best achieve their country’s collective interests before the PRC.

Outreach to Chinese Communities in Latin America Chinese communities in Latin America and their ties to the PRC mainland are an important, if also limited and complex, element of PRC soft power in Latin America. As noted previously at the core of the Chinese self-concept is the idea of China as a civilization, rather than a geographically bound construct. Nonetheless, the idea of the PRC relationship with the Chinese diaspora beyond the geographic boundaries of the country has evolved since the Communist takeover of the mainland in 1949. Initially, Chinese communities, who had supported the political efforts of Chinese nationalist Sun Yat Sen, were regarded as traitors. With the growth and maturation of PRC power, however, they have come to be seen as both a resource in the

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increasingly global outreach and an extension of Chinese interests to be protected. In recent years, the PRC government has sought to build ties to, and in some cases organize, Chinese communities. Such efforts aim to connect these ethnic Chinese to the broader geopolitical project of a greater China. PRC ambassador to Suriname Yuan Nansheng, for example, sought to work to organize that country’s disparate ethnic Chinese familial groupings into a single cultural organization with which the PRC embassy could more effectively relate.54 The PRC government has also worked to win the loyalties of ethnic Chinese in countries previously recognizing Taiwan, such as Panama. For their part, ethnic Chinese in Latin America and other countries, sometimes view their Chinese identity and connections as providing business opportunities as PRC commercial engagement with their countries expand. The PRC government reaches out, through its local embassies and consulates, to prominent Chinese citizens across Latin America and the Caribbean, both through cultural events, such as Chinese New Year festivities,55 and by holding individual meetings with prominent Chinese citizens. Such outreach seeks to build on the cultural identification of the recipient as ethnic Chinese, even though the persons and communities targeted may be intermarried and have lost skills in the Chinese language or speak Cantonese or Hakka rather than Mandarin Chinese. Another part of such PRC efforts is seeking to reconnect the recipient with their roots in mainland China through “ancestor tourism,” which is promoted by the government through discounted options for traveling in China. Such connection, although continuing to involve a mixture of local and pan-Chinese identity, is further magnified by ethnic Chinese’ inherent pride in the PRC’s growing global wealth and power. For both ethnic Chinese residence in Latin America and Chinese students there, Chinese government efforts involve a degree of coercion, insofar as that they understand that their public behavior is being watched by the PRC government, and that activism in ways critical of the Chinese government and its interests may have repercussions for their professional future, or the economic and other interests of their family members back in China.

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Chinese Media and Public Diplomacy Activities With respect to journalism, Chinese vehicles for exercising “soft power” are multiple. On one hand, China’s media regularly buys advertising supplements in Latin American electronic and print media about the PRC. Such purchased supplements are sometimes presented in the region’s newspapers in a manner that can be mistaken for objective journalism.56 Similarly, Chinese news services such as CGTN often provide free images, video feeds, and other material about the PRC, its leadership, and official or other important events. Such material is often passed along uncritically by resource-poor Latin American media outlets, thus biasing the material that they provide to their audiences with positive images of the PRC, including leaders portrayed in dignified poses, and a country that is orderly, clean, modern, and free of visible protests. The PRC also occasionally invites foreign reporters to the PRC for journalism training or other orientation programs. As with paid visits to the PRC for academics, consultants, and political figures, the primary impact of such trips is not to turn the journalists into propagandists, but rather, to inculcate a sense of gratitude and mutual obligation that leads them to portray stories of China in the most beneficial possible fashion and to consider interpretations of information that they receive carefully before reporting it in a critical or seemingly ungrateful fashion. Beyond journalism, PRC diplomats in Latin America are increasingly active through their public diplomacy in representing their government’s point of view. Indeed, active, self-confident outreach efforts by the new generation of self-confident Chinese diplomats have grown in recent years. One example has been the expanded use of social media by Chinese embassy teams during the Covid-19 pandemic. A study by the Andres Bello foundation found that 11 of the 29 Chinese government Twitter accounts in the region that it identified and examined were created in 2020. It similarly found that the total number of tweets from PRC government accounts increased from 863 tweets per month in December 2019 to 5018 tweets in May 2020.57 The study further noted that for Chinese diplomats, the development and leveraging of networks was important for the communication of their message, with approximately half of the official Twitter accounts examined having between 1000 and 100,000 followers.58 China’s growing wealth and power in recent years has fueled an increasing self-confidence notable in the assertive style of its diplomats in Latin

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America and the Caribbean, as well as in other parts of the world. The Andres Bello study noted that a handful of Chinese diplomats in the region, including China’s ambassadors to Grenada, Suriname, Venezuela, and its Consul General in Santa Cruz, Bolivia, were notable for particularly aggressive, anti-US-oriented tweets,59 although it noted that most Chinese tweets were focused on promoting positive images of China and countering negative messages such as those on PRC activities in Hong Kong and Xinjiang. The study also identified an unevenness in the use of social media by different Chinese ambassadors. Three, PRC ambassador to Venezuela, Lı ̌ Bǎoróng; PRC Ambassador to Panama Wèi Qiáng; and PRC Ambassador to the Dominican Republic, Zhāng Rùn, were responsible for the vast number of tweets in the study.60 The assertive communication style of China’s so-called wolf warrior diplomats also reflects cues from the confident style of Chinese President Xi Jinping. That style also reflects the increasing capability of the PRC diplomatic corps with respect to Latin America and the Caribbean, with a growing group of diplomats possessing a combination of local knowledge, and language skills useful for conducting themselves in the local language, including Spanish, Portuguese, and Dutch, among others.61 Even Chinese diplomats who have not behaved in particularly aggressive ways have demonstrated a level of cultural understanding beyond that shown by the generations that proceeded them. China’s Ambassador to Uruguay, Wang Gang is an example in this regard, regarded by many Uruguayans as displaying an understanding of their culture, in combination with a non-pretentious style that has played well with Uruguayan sensibilities.62

PRC Covid-19 Medical Diplomacy as Soft Power The most significant contemporary example of PRC efforts to build and apply its soft power is its Covid-19 diplomacy in Latin America, discussed in more detail in Chap. 9. China’s Covid-19-related efforts initially centered on deflecting resentment and building goodwill in the states of Western Europe, to which the pandemic spread from its origins Wuhan. Nonetheless, as the pandemic worsened globally, even while the PRC government increasingly brought the virus under control in China itself, that government worked to provide assistance in combatting the virus across the globe, particularly in developing regions, including Latin America and the Caribbean.

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At first, PRC Covid-19 diplomacy concentrated principally on providing personal protective equipment, such as masks and gloves, thermometers, thermal imaging cameras, test kits, ventilators, and other medical supplies, to countries in the region. In some places, initial Chinese aid in this regard exceeded that of the United States.63 The majority of such assistance was actually provided not by the PRC government, but rather by Chinese companies such as Huawei and the Jack Ma Foundation, with strong business interests in the region and a strong stake in its recovery.64 Such aid was later channeled through the PRC embassy to give the appearance that it actually came from the Chinese government. In the latter stage of the pandemic, the PRC became an important provider of vaccines to the region. The conduct of Stage Three clinical trials for vaccines by Chinese firms in Brazil, Peru, and Argentina, among others, created an opening for the Sinovac, Sinopharm, and CanSino vaccines in major markets in the region, complemented by the ability of PRC-based companies to ramp up production for export in the context of relatively controlled levels of the virus in China itself.65 The public diplomacy benefit of China providing its vaccines early, and in greater quantities than its Western counterparts, was significant, particularly in the context of the difficulty of those countries in obtaining significant quantities of vaccine directly from Western pharmaceutical firms, or through the World Health Organization’s COVAX facility. The priority given by the United States to getting vaccines to its own people as the pandemic ravaged the United States helped to push direct vaccine shipments by Western pharmaceutical firms, and through the COVAX facility to the bottom of the list, adding to China’s relative advantage in getting needed vaccines to Latin American populations before those of the United States. China coordinated delivery of its vaccines with a significant public diplomacy campaign. The arrival of Chinese vaccines at airports in the region was often associated with a photo opportunity with the president or other key leader of the country, accompanied by the PRC ambassador, with the delegation receiving the Chinese vaccine as it rolled off aircraft in pallets of boxes emblazoned with PRC flags and other clearly Chinese markings.66 The relatively low efficacy of the Chinese vaccines, as little as 3% for the first dose of the two recommended doses of Sinovac vaccine,67 as well as the Chinese posture of charging for its vaccines rather than donating them, had relatively little negative effect in a region desperate to receive

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any vaccine from any source as the virus spread through populations with often lethal effect. About 46% of Latin Americans polled in late 2020 indicated at that time that they would not take a Chinese vaccine, a rate higher than distrust toward Russian vaccines.68 As noted previously, perhaps the greatest demonstration of PRC soft power with its vaccine diplomacy has been its ability to use the region’s need for its vaccines to advance its strategic agenda. The most notable two such cases involved convincing the pro-US governments of both Brazil and the Dominican Republic to reverse prior public commitments to Huawei from the nation’s 5G telecommunications networks, in exchange for Chinese vaccine. Other examples included China’s previously noted unsuccessful attempts to convince Paraguay to change diplomatic recognition from the ROC to the PRC in exchange for expedited access to PRC-­ produced vaccines. In Honduras, President Juan Orlando Hernandez went so far as to promise to open a trade office in the PRC, the first step to formal diplomatic relations, in the hope of obtaining expedited access for such vaccines.69

Notes 1. See, for example, R. Evan Ellis, “The Evolution of Chinese Soft Power in Latin America,” in Soft Power with Chinese Characteristics, Kingsley Edney, Stan Rosen, and Ying Zhu, Eds. (Milton Park, England: Routledge, 2020). 2. Rebecca Clapper, “China Tells WHO It’s Not Nation’s Fault Investigation Into COVID-19 Origins Has Stalled,” Newsweek, August 25, 2021, https://www.msn.com/en-­u s/news/world/china-­t ells-­w ho-­i ts-­n ot-­ nations-­f ault-­i nvestigation-­i nto-­c ovid-­1 9-­o rigins-­h as-­s talled/ ar-­AANJLSB?ocid=uxbndlbing. 3. See, for example, Terry Gross, “Did COVID-19 Leak from a Lab? A Reporter Investigates—And Finds Roadblocks,” NPR, June 17, 2021, https://www.npr.org/2021/06/17/1007539626/did-­covid-­19-­leak-­ from-­a-­lab-­a-­reporter-­investigates-­and-­finds-­roadblocks. 4. Latinobarometer 2018 online data, Accessed September 5, 2021, https:// www.latinobarometro.org/latOnline.jsp. 5. Laura Silver, Kat Devlin and Christine Huang, “China’s Economic Growth Mostly Welcomed in Emerging Markets, but Neighbors Wary of Its Influence,” Pew Research Center, December 5, 2019, https://www. pewresearch.org/global/2019/12/05/chinas-­economic-­growth-­mostly-­ welcomed-­in-­emerging-­markets-­but-­neighbors-­wary-­of-­its-­influence/.

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6. “How Many Confucius Institutes Are in the United States?” National Association of Scholars, August 31, 2021, https://www.nas.org/blogs/ article/how_many_confucius_institutes_are_in_the_united_states. 7. Lee Edwards, “Confucius Institutes: China’s Trojan Horse,” The Heritage Foundation, May 27, 2021, https://www.heritage.org/homeland-­ security/commentary/confucius-­institutes-­chinas-­trojan-­horse. 8. “Full text of China’s Policy Paper on Latin America and the Caribbean,” Xinhua, November 24, 2016, http://english.www.gov.cn/archive/ white_paper/2016/11/24/content_281475499069158. 9. Sun Hongbo, “Los intercambios culturales entre China y América Latina,” Xinhua, February 25, 2013, http://spanish.china.org.cn/china/ txt/2013-­02/25/content_28050220_3.htm. 10. “Cultura está uniendo a China y Latinoamérica,” Xinhua, December 18, 2018, https://asialink.americaeconomia.com/sociedad/ cultura-­esta-­uniendo-­china-­y-­latinoamerica. 11. Trevisan, 2021. 12. Off the record input from China-focused scholar, December 2021. 13. Trevisan, 2021. 14. Dussel Peters, 2021. 15. “Will Evergrande’s Crisis Spell Trouble for Latin America?” Latin American Advisor, October 20, 2021, https://www.thedialogue.org/ latin-­america-­advisor/. 16. “China-Latin America Finance Database,” 2021. 17. “Direction of Trade Statistics,” 2021. 18. “Direction of Trade Statistics,” 2021. 19. Abel Halpern, “Ecuador: Never a Banana Republic,” Latin Trade, May 29, 2012, https://latintrade.com/2012/05/29/ecuador-­never-­a­banana-­republic/. 20. Kevin Casas-Zamora, “Notes on Costa Rica’s Switch from Taipei to Beijing,” Brookings Institution, November 6, 2009, https://www.brookings.edu/ on-­the-­record/notes-­on-­costa-­ricas-­switch-­from-­taipei-­to-­beijing/. 21. “Presidente de Panamá elogia plan chino de infraestructura,” El Economista, April 2, 2019, https://www.eleconomista.net/actualidad/Presidente-­de-­ Panama-­elogia-­plan-­chino-­de-­infraestructura-­20190402-­0004.html. 22. “Versión estenográfica. Petición de perdón por agravios a la comunidad china en México,” Mexico Foreign Ministry, Official Website, Accessed May 21, 2021, https://www.gob.mx/presidencia/articulos/version-­ estenografica-­peticion-­de-­perdon-­por-­agravios-­a-­la-­comunidad-­china-­en-­ mexico?idiom=es. 23. “Brief: Why Mexico’s President Is Apologizing to China,” Geopolitical Futures, May 18, 2021, https://geopoliticalfutures.com/brief-­why-­ mexicos-­president-­is-­apologizing-­to-­china/?tpa=YzQyN2YxMzZjNWI1

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O T d k M W Q y Y j Q 1 N T E 2 M j I 1 N j E 4 N j Y 2 N TA 4 O T Y & u t m _ source=newsletter&utm_medium=email&utm_term=https%3A%2F%2Fge opoliticalfutures.com%2Fbrief-­why-­mexicos-­president-­is-­apologizing-­to-­ china%2F%3Ftpa%3DYzQyN2YxMzZjNWI1OTdkMWQyYjQ1NTE2M jI1NjE4NjY2NTA4OTY&utm_content&utm_campaign=PAID+-­+Everyt hing+as+it%27s+published. 24. Robert McMillan and Dustin Volz, “Hackers Backed by China Seen Exploiting Security Flaw in Internet Software,” The Wall Street Journal, December 15, 2021, https://www.msn.com/en-­us/news/world/ hackers-­b acked-­b y-­c hina-­s een-­e xploiting-­s ecurity-­f law-­i n-­i nternet-­ software/ar-­AARQ6T2?ocid=msedgdhp&pc=U531. 25. Larraín and Zhang, 2021. 26. “Lacalle Pou: Uruguay and China in talks over bilateral free-trade deal,” Buenos Aires Times, September 8, 2021, https://batimes.com.ar/news/ economy/lacalle-­p ou-­u ruguay-­a nd-­c hina-­i n-­t alks-­o ver-­b ilateral-­f ree-­ trade-­deal.phtml. 27. “Bolivian elected president woos China,” MercoPress, January 8, 2006, https://en.mercopress.com/2006/01/08/bolivian-­elected-­president­woos-­china. 28. Jonathan Watts, “Chávez says China deal ‘great wall’ against US,” The Guardian, August 25, 2006, https://www.theguardian.com/ world/2006/aug/25/venezuela.china. 29. Ryan Hamilton, “Trinidad and Tobago to take Chinese loan to buy Chinese vaccines,” Newsday, May 11, 2021. 30. Villavicencio, 2013. 31. “China pagó $143 millones a expresidente de Panamá para romper relaciones con Taiwán,” El Mundo, November 26, 2019, https://diario. elmundo.sv/china-­pago-­143-­millones-­a-­expresidente-­de-­panama-­para-­ romper-­relaciones-­con-­taiwan/. 32. Angelica Mari, “Huawei hires former Brazilian president to advise on 5G,” ZDNet, January 22, 2021, https://www.zdnet.com/article/huawei-­hires­former-­brazilian-­president-­to-­advise-­on-­5g/. 33. See R.  Evan Ellis, “A Race Against Time: Deploying Vaccines and Addressing the Disproportionate Impacts of Covid-19  in Latin America and the Caribbean,” Testimony before the U.S. House of Representatives Subcommittee on the Western Hemisphere, Civilian Security, Migration, and International Economic Policy, May 13, 2021, https://docs.house. gov/meetings/FA/FA07/20210513/112612/HHRG-­1 17-­F A07-­ Wstate-­EllisPhDR-­20210513.pdf. 34. Wilson Lima, “China pressiona por demissão de Ernesto Araújo para liberar insumos das vacinas,” Gazeta do Povo, January 21, 2021, https://

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www.gazetadopovo.com.br/republica/china-­p ressiona-­d emissao-­ ernesto-­araujo-­vacinas-­covid/. 35. “Brazil’s foreign minister, who bashed China and praised Trump, resigns,” The Guardian, March 29, 2021, https://www.theguardian.com/ world/2021/mar/29/brazil-­foreign-­minister-­ernesto-­araujo-­resigns. 36. “Mas personas están escogiendo estudiar en China,” Study In China, official website, Accessed September 5, 2021, https://studyinchinas.com/ es/por-­que-­mas-­personas-­estan-­escogiendo-­estudiar-­en-­china/. 37. “Brasil ya Habla de Aumentar Sus Exportaciones Al Gigante Asiatico,” Clarin, July 4, 2010, https://www.clarin.com/ediciones-­anteriores/ china-­suspendio-­compras-­aceite-­meses_0_HkygjpIR6tl.html. 38. “CHINA: Argentine President Christina Fernandez meets China’s Premier Wen Jiabao in Beijing on a state visit aimed at boosting ties and trade links,” Reuters, July 14, 2010, https://reuters.screenocean.com/ record/446237. 39. “China slams Calderon’s meeting with Dalai Lama,” The San Diego UnionTribune, September 10, 2011, https://www.sandiegouniontribune.com/ sdut-­c hina-­s lams-­c alderons-­m eeting-­w ith-­d alai-­l ama-­2 011sep10-­ story.html. 40. “Taiwan Office established in Guyana,” Ministry of Foreign Affairs of the People’s Republic of Taiwan, February 4, 2021, https://en.mofa.gov.tw/ News_Content.aspx?n=1328&sms=273&s=95318. 41. Brian Hioe, “Guyana Reverses Course on Representative Office After Chinese PRESSURE,” New Bloom Magazine, February 5, 2021, https:// newbloommag.net/2021/02/05/guyana-­reversal-­office-­tw/. 42. Evan Ellis, “Chinese Advances in Chile,” Global Americans, March 2, 2021, https://theglobalamericans.org/2021/03/chinese-­ advances-­in-­chile/. 43. Falk Hartig, “A decade of wielding soft power through Confucius institutes: some interim results,” in Soft Power with Chinese Characteristics: China’s Campaign for Hearts and Minds, Kingsley Edney, Stanley Rosen and Ying Zhu, eds. (New York: Routledge, 2020), pp. 133–148. 44. Carlos Roa, “The United States is Losing Latin America to China,” The National Interest, August 15, 2019, https://nationalinterest.org/feature/united-­states-­losing-­latin-­america-­china-­73906?page=0%2C1. 45. “CHINA—CELAC JOINT ACTION PLAN FOR COOPERATION IN KEY AREAS (2022–2024),” Ministry of Foreign Affairs of the People’s Republic of China, December 7, 2021, https://www.fmprc.gov.cn/mfa_ eng/wjb_663304/zzjg_663340/ldmzs_664952/ xwlb_664954/202112/t20211207_10463459.html. 46. Daniel Mendez Moran, El plan de China en America Latina (2018), pp. 374–379.

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47. Colleagues personally known to the author. 48. Wang Chao, “People-to-people diplomacy key to tell China’s story,” China Daily, December 31, 2019, https://global.chinadaily.com. cn/a/201912/31/WS5e0a8451a310cf3e3558193d.html. 49. Chao, 2019. 50. Trevisan, 2021. 51. Linda Zhang and Ryan Berg, “An Overlooked Source of Chinese Influence in Latin America,” in China Brief, Volume 21, Issue 3, February 11, 2021, https://jamestown.org/program/an-­o verlooked-­s ource-­o f-­c hinese-­ influence-­in-­latin-­america/. 52. Ellis, “Chinese Advances in Chile,” 2021. 53. Trevisan, 2021. 54. R.  Evan Ellis, “Suriname and the Chinese: Timber, Migration, and the Less-Told Stories of Globalization, SAIS Review, Volume 32, Number 2, Summer–Fall 2012. Pp. 85–97. 55. See, for example, “Embajada de China en Panamá celebra el Año Nuevo Chino,” El Capital Financero, February 11, 2011, https://elcapitalfinanciero.com/embajada-­de-­china-­en-­panama-­celebra-­el-­ano-­nuevo-­chino/. 56. Trevisan, 2021. 57. Parsifal D’Sola Alvarado, “China’s public diplomacy in Latin America and the Caribbean—COVID-19 edition, Foreign Affairs,” SupChina, October 16, 2020, https://supchina.com/2020/10/16/chinas-­public-­ diplomacy-­in-­latin-­america-­and-­the-­caribbean-­covid-­19-­edition/. 58. María Catalina Micolta, “China’s Communication with a Latin America Audience,” Andres Bello Foundation, September 23, 2020, https://fundacionandresbello.org/en/research/chinas-­c ommunication-­w ith-­a ­latin-­american-­audience/. 59. Micolta, 2020. 60. D’Sola Alvarado, 2020. 61. D’Sola Alvarado, 2020. 62. Ellis, “Uruguay exemplifies how to deal with China,” 2021. 63. “Aid From China and The U.S. to Latin America Amid the Covid-19 Crisis,” The Wilson Center, accessed September 6, 2021, https://www. wilsoncenter.org/aid-­china-­and-­us-­latin-­america-­amid-­covid-­19-­crisis. 64. “Aid From China and The U.S. to Latin America Amid the Covid-19 Crisis,” 2021. 65. For more details, see Ellis, “A Race Against Time: Deploying Vaccines,” 2021. 66. See, for example, 5 “China’s Sinopharm vaccine arrives in Bolivia,” CGTN, February 25, 2021, https://www.youtube.com/watch?v=vd2vUDT_Mpk. 67. “Chile Covid-19 vaccination drive adds to Sinovac efficacy data,” South China Morning Post, April 9, 2021, https://

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w w w. s c m p . c o m / n e w s / c h i n a / s c i e n c e / a r t i c l e / 3 1 2 8 8 8 6 / chile-­covid-­19-­vaccinationdrive-­adds-­sinovac-­efficacy-­data. 68. Luiz Fernando Toledo, “Brasileiros confiam menos em vacina da China do que na de outros países,” CNN Brasil, October 16, 2020, https://www. cnnbrasil.com.br/saude/2020/10/16/pesquisa-­r ejeicao-­a -­v acina-­ chinesa-­e-­maior-­nobrasil-­do-­que-­em-­outros-­paises, accessed October 25, 2020. 69. See “Honduras no descarta abrir oficina comercial en china para comprar vacunas,” La Prensa, May 12, 2021, https://www.lapr e n s a . h n / h o n d u r a s / 1 4 6 3 3 9 2 -­4 1 0 / h o n d u r a s -­a b r i r-­o f i c i n a ­comercial-­china-­comprar-­vacunas-­.

CHAPTER 6

The Struggle for Diplomatic Recognition and Its Implications

Overview As the PRC advances its economic position, as well as its political and institutional engagement in Latin America and the Caribbean, it is relevant that 9 of the 14 countries in the world that continue to recognize Taiwan as the legitimate government of all China are found in the Western Hemisphere. These include Paraguay in South America; Guatemala, Honduras, and Belize in Central America; and Haiti, Saint Lucia, Saint Vincent and the Grenadines, and Saint Kitts and Nevis in the Caribbean. As noted previously, progressively isolating Taiwan diplomatically on the world stage, as part of longer-term PRC efforts to reintegrate Taiwan under PRC control is a key PRC global strategic objective. Changing the position of countries in the region that recognize Taiwan is thus a priority with respect to PRC engagement in the region. The December 2021 change in recognition from Taiwan to the PRC by the Sandinista government in Nicaragua,1 and the commitment to recognize the PRC by Xiomara Castro in Honduras, prior to her election as President in November 2021,2 shows that the issue is very much in play in the region. The benefit to the PRC of changing the diplomatic posture of Taiwan recognizing countries is not, however, merely political. It also benefits Chinese companies in obtaining access to the resources and markets of these countries, and by extension, expanding their associated influence. This occurs through multiple driving factors, including the signing of © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_6

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multiple, nontransparent MOUs between the PRC and the country that recognizes it, that often accompany the change. Such MOUs generally open up the partner nations’ market to PRC companies across a range of important sectors, including physical infrastructure, electricity, telecommunications, and banking, among others. The change in recognition also typically involves terminating scholarships for the youth of the partner nations studying in Taiwan, and the redirection of that elite, or an alternate group of youth, to study in PRC universities instead. As noted in Chap. 5, while such socialization does not inherently transform those now being sent to China to study into pro-­ PRC propagandists, still it shapes their impression of the PRC in positive ways while inculcating a sense of gratitude for the opportunity provided by the Chinese state, while also allowing Chinese security services to assess and build relationships with them. As noted previously, the new generation of China-focused young professionals brought into the PRC fold are particularly valuable strategically because many will go on to become their country’s key technical elites dealing with the PRC in their Foreign Ministry, Ministry of Commerce, other government organizations, or in leading parts of the private sector. Beyond the redirection of these youth, the change in diplomatic relations generally involves trips to the PRC by the senior officials of the government changing relations, accompanied by a delegation of businesspersons politically connected to the regime, or important to the economies of their country, with an interest in either expanding access to the Chinese market, or forging ties with the PRC in projects in their country. The previously noted MOUs signed during these initial trips, while not substantially changing the underlying balance of trade between the PRC and its new partner over the long run, may facilitate opportunities for the well-connected businesspersons included in the delegation to make deals that benefit their particular interests.3 Thus indirectly, such trips provide opportunities for the PRC to compromise a key part of the economic elite of their new partner.

The Evolution of the Taiwan-PRC Struggle in Latin America and the Caribbean As noted in Chap. 3, the advance in the diplomatic recognition of the PRC in Latin America and the Caribbean has preceded gradually over time in a series of phases, and will not be repeated here. For the purpose of this chapter, the key elements include the move of a significant portion of

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Latin American and Caribbean governments to recognize the PRC in the 1970s and 1980s, followed by a prolonged “bidding war” for the rest from the 1990s through the 2008 “diplomatic truce” between the PRC and ROC. This “bidding war” involved application of a range of PRC and ROC government instruments short of military force, including diplomatic and economic incentives, and intelligence activities. During this period, the previously mentioned International Liaison Department of the Chinese Communist party played an important role in advancing diplomatic recognition through the use of semi-covert “friendship committees” of well-connected business and other elites in target countries. These committees sought to lobby their respective governments to change relations. Later many of the principal local figures involved in what was known as “United Front” activities,4 who had the opportunity to travel to the PRC and establish business and other connections there, would lead their countries in engaging in business tourism and import-export deals following the change in relations. The period of struggle prior to the 2008 truce (and following its breakdown in 2016) was characterized by PRC offers of rewards and other incentives to the nations changing relations, as well as to the individuals playing a key role in that change. The practice is known as “stadium diplomacy”5 because in many cases, the principal reward given by PRC for recognition was the construction of soccer or cricket stadiums, as well as roads, clinics, and other infrastructure. For its part, Taiwan would make similar promises of development projects and other incentives for not changing relations, or for changing back. In the case of the small Caribbean nation of St. Lucia, responding to such incentives on both sides, the government switched back and forth between recognizing Taiwan and the PRC multiple times as Taiwan-oriented and PRC-oriented governments alternated in power.6 The last government to change relations during this period, as noted previously, was Costa Rica, which established relations with the PRC in May 2007, following a year of secret diplomacy by its president, Dr. Oscar Arias, a leader who was internationally respected for his prior role in the Central American peace accords. The dynamics of the PRC-ROC diplomatic competition changed with the return of the relatively more PRC-friendly Kuomintang (KMT) party to power in Taiwan in that nation’s January 2008 elections. The new Taiwanese President Ma Jing-yeou and the KMT was open to pursuing improved economic and political relations with the PRC. The elevation of

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Ma and the KMT to power in Taiwan thus paved the way for talks between the PRC and ROC governments to lower tensions, while looking for ways to strengthen ties. As part of that process, in the middle of 2008, the two governments informally agreed to suspend their global competition for diplomatic recognition, while working to build economic and other ties.7 That agreement began the period of the PRC-ROC “diplomatic truce,” which lasted until the end of the KMT government period in power in 2016. During the “truce period,” in the context of growing PRC economic and other power, the nations of Central America and the Caribbean continued to seek relations with the PRC. Leaders expressing interest included then Paraguayan President Fernando Lugo,8 Panama’s Ricardo Martinelli,9 Honduras’ Porfirio Lobo,10 and El Salvador’s Mauricio Funes,11 among others. They were surprised when the PRC politely declined their expressions of interest in the interest of honoring the truce.12 The posture of the PRC and Taiwan, even in the context of interest by individual states in Latin America to change relations, effectively locked in the PRC-ROC “status quo” for almost a decade.13 In January 2016, in the context of a growing sense in Taiwan that the KMT rapprochement with the PRC had not served the nation’s interests, the Taiwanese people voted the Democratic Progressive Party (DPP) back to power, headed by Tsai Ing-wen, who became the new president. President Tsai’s more assertive posture toward the PRC, in the context of a more powerful and self-confident PRC, now led by Xi Jinping, set the stage for the collapse of the PRC-ROC truce. As in other aspects of its international engagement, the PRC proceeded away from the truce in a cautious, incremental fashion, first sending threatening signals to its Taiwanese counterparts. Consistent with other PRC activities globally, the collapse of the truce began with PRC actions in Africa before proceeding to Latin America. In 2016, the PRC took its first “half step” accepting a long-standing offer by the African government of Gambia to recognize the PRC, to which the PRC had previously not responded.14 When Tsai Ing-wen’s DPP government did not back down, the PRC next secured the agreement of the African government of São Tome and Principe to change its relations to the PRC. The later change was a more significant move since São Tome and Principe, by contrast to Gambia, had not previously made a public offer to recognize the PRC.15 In June 2017, the PRC opened a new geographic front in its renewed diplomatic struggle with Taiwan, this time in the Western Hemisphere,

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with the decision by the Panamanian government of Juan Carlos Varela to switch relations to the PRC. Panama’s change was not unexpected, insofar as that the PRC was a key user of the Panama Canal, and a significant volume of China’s trade with the region flowed through Panamanian ports in Colon and Balboa. Nonetheless, Panama’s strategic importance as a global logistics and finance hub, and the country’s historically close relations with the United States and significant US commercial and other presence there, made the change particularly impactful in Washington and the region. During the year that followed Panama’s flip, the PRC expanded its advances in the Western Hemisphere, securing recognition from the government of Danilo Medina in the Dominican Republic in May 2018, followed by recognition by the left-oriented Farabundo Marti National Liberation (FMLN) regime of Salvador Sanchez Ceren in El Salvador in August of that year. The changes were each particularly impactful because each of the three countries recognizing the PRC had a particularly close relationship with the United States, and had taken the step with the understanding that it would displease Washington.16 The three PRC’s three achievements in advancing its diplomatic recognition in the hemisphere in rapid succession set off alarm bells in Washington, particularly in the context of the more adversarial orientation toward China taken by the administration of Donald Trump since its arrival in power in January 2017. Following El Salvador’s abandonment of Taiwan and recognition of the PRC, the United States recalled its senior diplomatic personnel from all three countries to Washington for consultations over how to respond.17 In the years that followed that recall, Washington demonstrated a notably increased level of attention and effort in pushing back against the PRC diplomatic advance in the hemisphere, often seeming to act in coordination with its de facto ally Taiwan, whose de facto working relationship with Washington expanded significantly during the period. The collective effects of US pushback helped to temporarily prevent any other states in the region from switching recognition from Taiwan to the PRC. The dissuasive impact was strengthened by the level of economic dependence by governments in Central America and the Caribbean on the United States, including both trade flows and remittances from immigrants from those countries living in the United States. China’s advance was further complicated by political change in each of the three countries that had switched their relations with the PRC. This

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included the election of Nayib Bukele in El Salvador in February 2019, Laurentino Cortizo in Panama in May 2019, and Luis Abinader in the Dominican Republic in July 2020. Particularly in the cases of Panama and the Dominican Republic, the elections reflected discomfort in their societies that the actions of their predecessors had distanced their governments from the United States and the new, relatively pro-US governments sought to correct that balance. Finally, in 2020, the spread of Covid-19 across the region further delayed the implementation of many Chinese (and other) projects across the region. Despite such delays, however, in each of the three cases, the diplomatic change ultimately opened the door for a significant expansion of PRC economic, political, and other influence in the recognizing country. The balance of this chapter analyzes each case in more detail to highlight both commonalities and differences in the relationship between the diplomatic change and the trajectory of the PRC’s subsequent advance.

The PRC Advance in Panama The recognition of the PRC in June 2017 by the Panamanian government of Juan Carlos Varela reflected a confluence of factors. First, it was enabled by the previously noted 2016 end to the de facto diplomatic truce that had been in effect between the PRC and ROC since 2008. From Panama’s perspective, China’s role as a key user of the Panama Canal18 and an important player in the Panamanian economy fed an impression within the government of Juan Carlos Varela and others in Panama that recognition was not only a logical step, but that it would contribute to the country’s advance in the global economy as a trade and financial hub linking the Western Hemisphere to both Asia and Europe. Major PRC commercial activities in Panama prior to recognition included the operation by the Chinese logistics firm Hutchison Port Holdings of port concessions at Cristobal, on the Atlantic side of the Canal, and Balboa, on the Pacific side. In addition, a year prior to the diplomatic change, a group of Chinese investors had signed a commitment with the Varela government in Panama for a $1 billion project for a new port in Colon, the Panama Colon Container Port (PCCP).19 At a personal level, the experience of the then President Juan Carlos Varela working with China in his prior position as Minister of Foreign Relations contributed to his perceptions of the benefits to be had in

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diplomatically recognizing the PRC. In addition to the opportunities for the country itself, however, some accused Varela of receiving a $143 million bribe to change relations.20 As had also occurred with the last diplomatic switch in the region, by Costa Rica in May 2007, and in the cases of the Dominican Republic and El Salvador, which followed it, the diplomatic change set into motion a series of events which dramatically accelerated PRC presence and influence in the country. In November 2017, just months after Panama’s change, President Varela traveled to the PRC to officially open Panama’s embassy in Beijing, and for a state visit in which he met with Chinese President Xi, signing 19 cooperation agreements.21 As also occurred with other countries changing relations to the PRC, President Varela was accompanied by a large delegation that included not only five ministers, but many of Panama’s leading businesspersons,22 representing not only the country’s key economic sectors but also its most influential families. The cooperation agreements that he signed covered a broad range of topics from authorizing PRC construction of a fourth trans-Panama electricity line, to making Panama the first country in the Western Hemisphere to officially join China’s Belt and Road Initiative,23 paving the way for 18 other countries in the region to do so in the two years that followed. In December 2018, Chinese President Xi Jinping traveled to Panama, signing 18 agreements,24 apparently related to the MOUs signed by President Varela in Beijing the previous year. While the details of the 2018 commitments, like the 2017 MOUs, were not then made public, the breadth of officially announced projects emerging from President Xi’s visit made it clear that the PRC and its companies were leveraging the new relationship with Panama to advance broadly across a range of fronts,25 pursuing deals that involved a broad range of Panama’s families and business interests.26 Chinese engagement during the Varela government included negotiations for a Panama-China Free Trade Agreement, which was nearing completion following five rounds of negotiation when the government’s period in office ended. Chinese engagement also included studies for construction of a controversial $4 billion high-speed passenger train from Panama City to David,27 construction by China Harbor of a cruise ship terminal on the Pacific side of the Canal where there was little demand for cruise ship traffic, to construction of a fourth bridge over the Panama canal, to construction of a $900, 441 MW natural gas fired electric plant, Martano, to a Chinese project offering fuel bunkering services.28

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Commitments arising from the change in diplomatic recognition included award of a license to a relatively unknown Chinese company, New United International Maritime Services, to certify Panama-flagged vessels for operations in the PRC,29 as well as an initiative by Huawei to make the Colon Free Trade Zone a regional hub for the distribution of its electronic systems, with the company’s accompanying installation of security cameras in the crime-ridden urban center next door.30 Chinese activities in Panama following recognition further included construction of a massive convention center on the Amador peninsula, interest by China Construction Bank and Industrial and Commercial Bank of China to establish operations in Panama,31 and Jiangxi Copper’s December 2019 acquisition of a stake in the mining company First Quantum, operating Panama’s massive new mining project, Minera Panama.32 On the Pacific side of the canal, some Panamanian analysts saw a risk at the time that the Varela government would award a contract for the development of a new Chinese industrial park on the Western bank of the canal.33 In the education arena, one of the first PRC acts following recognition was to launch a Confucius Institute at the University of Panama, with associated scholarships to study in China provided through the Chinese cultural promotion organization Hanban. The institute opened its doors in June 2018.34 That same year, the PRC offered eight such scholarships.35 In symbolic terms, the Chinese challenge to the long-standing privileged role of the United States in Panama was symbolized by its gambit to build its embassy at a strategic high-point on the Amador peninsula, overlooking the Pacific entrance to the Canal.36 As noted previously, US pushback against the PRC advance, which accelerated with the United States’ withdrawal of diplomatic personnel following El Salvador’s August 2018 flip, and the May 2019 election of Laurentino Cortizo, led to a temporary halt and reevaluation of many of the projects. The election of Cortizo and his opposition Democratic Revolutionary Party (PRD) reflected the discomfort that Panamanians felt with his predecessor’s movement of the country away from its traditionally close relationship with the United States, including not only his government’s embrace of the PRC and its projects but also symbolized by the July 2019 designation of Panama by the United States on the Financial Action Task Force (FATF) “grey list,”37 which put at risk the country’s reputation and ability to operate effectively as an international financial

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center run with relative respect for transparency, good governance, and rule of law. Although the Cortizo government did not reverse major diplomatic or policy commitments of his predecessor such as Panama’s recognition of the PRC or Panamanian participation in BRI, the new Cortizo government began a quiet reevaluation of deals made with the PRC by the Varela government, leading to delays in, and ultimately the reorganization of many, as well as the canceling of several initiatives. The economically questionable bullet train to be built by the Chinese from Panama City to David was one of the first projects to be canceled. Free trade talks with the PRC, paused after five rounds at the end of the Varela government, were never resumed under the Cortizo administration. The PCCP port project was paralyzed when the Chinese investor group behind it ran into legal and financial problems in the PRC, including the arrest of the Comptroller of Shanghai Gorgeous Group, Gao Tianguo.38 The associated construction of a cross-country powerline was canceled, and the supporting Martano gas-fired electricity plant was shelved and ultimately sold to competitor AES. In mining, Jiangxi sold off its interest in the Canadian company First Quantum in July 2020,39 terminating its presence in Panamanian mining. The development of a 1200 hectare plot north of Corozal into an industrial park by the Panama Canal Administration (ACP), and its possible sale to Chinese firms, was put on hold as the ACP focused on more pressing issues such as water management in the canal zone. The contract for the fourth bridge over the Panama Canal, awarded to a consortium of China Harbour, China Construction Americas, and China Landbridge, was postponed and restructured, although the project and surrounding construction work had begun to move forward by the end of 2020.40 Despite such setbacks, a number of Chinese projects did go forward. The nation’s new convention center, whose completion by the Chinese was contracted under the Varela regime, was completed. Hutchison Whampoa’s operating licenses for the ports of Cristobal and Balboa were renewed when their contracts came up for renewal in 2021.41 In telecommunications, Huawei and ZTE have continued to build a strong presence as equipment providers for Panama’s commercial telephone companies, Movistar and Mas Movil, as well as for Tigo and Claro to a lesser extent.42 With Panama’s gradual overcoming of the Covid-19 pandemic, Chinese projects in Panama began again to show signs of advance. As of late 2021, Huawei continues to be positioned to play an important role, through its supply of equipment to the commercial providers Movistar and Mas Movil,

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as they implement 5G networks.43 Huawei also has continued the development of its “safe cities” surveillance system project in Colon. Separately, Huawei has also been advancing a “digital special economic zone” in San Miguelito, a $38 million project financed by the Bank of China to provide digitally enabled warehousing and distribution to promote the expansion of Chinese business in the region from Panama.44 It will reportedly also provide digital support services such as blockchain and cloud computing.45 In banking, ICBC was approved for branch banking operations in Panama in June 2020.46 The ride-sharing company DiDi Chuxing began operations in Panama in March 2020, although its advance was slowed by Covid-19. With respect to Covid-19 diplomacy, the Chinese government and its companies reached out to Panama relatively early in the pandemic to provide personal protective equipment, test kits, and other items. Chinese firms such as Alibaba and Huawei, with strong businesses interests in the country, played a leading role. The PRC also used the pandemic to donate heat-sensing cameras and other electronic equipment, deployed in sensitive areas in Panama, including the Tocumen International Airport, the Ministry of Public Security, the Health Ministry, and the First Lady’s office,47 combining the possibility of earning goodwill among Panamanian government personnel and the Panamanian people, with possible intelligence collection opportunities.

The PRC Advance in the Dominican Republic In the Dominican Republic, as in the other contemporary cases of China’s diplomatic advance, the Dominican government’s May 2018 recognition of the PRC opened the door for a significant, rapid advance in the PRC position and associated influence in the country, albeit with problems due to the change in government, the US reaction, and the Covid-19 pandemic. As with the other cases of diplomatic flips, the vehicles for that advance included the signing of numerous non-transparent MOUs, interactions with the PRC by Dominican politicians and business leaders, and the redirection of Dominicans studying China from Taiwanese to mainland Chinese schools. By contrast to Panama, activities by Chinese companies and investors in the Dominican Republic prior to the change in relations were relatively limited. They included a minority stake by the Shenzhen-based firm

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Zhonging Lingham in a small mine, Cerro de Maimon, through the Dominican Mining Corporation (CORMIDOM),48 as well as a modest presence by Huawei in the Dominican telecommunications sector. In the days following the recognition of the PRC by the Dominican government of Danilo Medina, the Chinese government talked of the possibility of $800 million in investment in the country.49 Some reports suggested the PRC could provide as much $3–10 billion in loans and investments to the country in exchange for the diplomatic switch.50 In President Medina’s initial trip to the PRC in November 2018, the two countries signed 18 memorandums of understanding. These included agreements affiliating the country with China’s Belt and Road Initiative, agricultural cooperation, phytosanitary agreements, tourism, “financial integration,” people-to-people diplomacy, and even cooperation in baseball, the Dominican Republic’s national passion. As with other Latin American countries, particularly those designated by the PRC as its “Comprehensive partners,” the two governments agreed to establish a “mixed commission” through which they could coordinate at a high level to manage and overcome obstacles in building the commercial and other dimensions of the relationship.51 As in the other cases, President Medina brought a relatively large delegation with him in his November 2018 trip to the PRC, representing a virtual “who’s-who” of leading Dominican commercial groups and families. The delegation included heads of the Inicia group, which had an interest in the Dominican sugar and electricity sectors, Carlos Marti of the Marti group, owner of Sunix and Tropigas, which had interests in the liquefied petroleum gas and gasoline sectors, José Gonzalez Cuadra, whose family owned the Nacional and Jumbo supermarket chains, Celso Marranzini, President of the Dominican Republic Industries Association (AIRD), Felix Castellanos of the Santiago Group, with an important presence in light manufacturing, as well as interests in the Cibao International Airport and Santiago Metropolitan hospital, and Franco Rainieri, President of the Puntacana Foundation Group and the Punta Cana International Airport. It further included senior representatives from the Santiago Group, involved in the Dominican Republic’s Free Trade Zones, the Rizek brothers, who play a key role in Dominican cacao industry and energy production, and members of the Bonetti Guerra family, which was involved in the production of vegetable oil and grains. Not surprisingly, many of the 14 projects specifically discussed during the trip, representing $90 million in Chinese investment, reflected the interests and business

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areas of these Dominican families and groups included in the delegation.52 In the months that followed the Medina trip to the PRC, his Chinese counterparts formalized a number of initiatives in the country. These included a project for China to loan $600 million to modernize and expand the Dominican Republic’s electricity infrastructure, PRC investments to transform the Port of Manzanillo into a multimodal megaport,53 and expanded imports of Dominican rum, tobacco, avocados, and fruit. 54 In telecommunications, Chinese projects included possible construction of a $300 million biomass and gas-fueled power plant.55 In addition to the PRC offering, the Medina government, for its part, announced multiple additional areas in which it was actively soliciting Chinese investment.56 The PRC did not, however, publicly respond with definitive commitments in any of these areas. These projects solicited by the Dominican side include proposed construction of dams in the Dominican province of Monseñor Nouel, as well as on the Boba and Baqui rivers, plus the modernization of the port of Arroyo Barril. Projects proposed by the Dominican side also reportedly included the construction of sewage and wastewater systems in the north of the country, an aqueduct in Cotui, and a project on the Yuna River.57 One of the biggest infrastructure works discussed by the two governments was a railway that would connect Haiti to the Dominican Republic.58 In telecommunications, in October 2018, the Dominican telecommunications authority Indotel signed a commitment with Huawei to expand cellphone coverage in rural areas, as well as work on 5G Wi-Fi and “safe city” projects.59 In the sphere of education and training, the PRC and Dominican governments signed an agreement in 2018 through which China’s Tsinghua University would train personnel from the Ministry of External Relations of the Dominican Republic. As when Panama recognized the PRC, the PRC also provided scholarships for 10 Dominicans per year to study in the PRC.60 Also as in the Panama case, the Chinese also established a Confucius Institute for PRC-­ sanctioned instruction in Chinese language and culture at the Technological Institute of Santo Domingo (INTEC), one of the country’s most prestigious private schools. The institute opened in May 2019.61 In the arena of social works, China discussed building 10,000 units of low-income housing, funded by a $200 million loan by the PRC, with the work to be done by PRC-based companies.62

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As in Panama with the transition from the Varela to Cortizo governments, the change in the Dominican Republic from the Medina to the Abinader administration in August 2020 contributed to a temporary pause in the rapid expansion of PRC activity in the Dominican Republic. As in Panama, the incoming administration of Luis Abinader and his Modern Revolutionary Party (PRM) had a pro-US orientation and appeared sensitive to its concerns over China’s expanding economic and other activities in the Dominican Republic. Indeed, following an October 2020 visit by then-US Secretary of State Michael Pompeo to the Dominican Republic, President Abinader declared that PRC-based companies would no longer be permitted to operate in strategically sensitive sectors of the Dominican economy, such as participating in major port projects or the construction of 5G telecommunications infrastructure.63 As in Panama, the increased caution of the Abinader administration toward the PRC was reinforced by the impact of Covid-19, which devastated the tourism-dependent Dominican economy, and diverted the attention and resources of its government in a way that temporarily put virtually all major infrastructure and other projects there on hold. During the first months of the Abinader administration, almost none of the projects previously discussed with the PRC during the Medina Administration went forward, with the exception of a limited number of donations from the PRC in the arena of security and public services. Such donations featured PRC assistance in upgrading the country’s emergency response system, including the gift of 40 fire trucks.64 It also included donations of 140 motorcycles to the Dominican security forces, which were equally divided between the military and police, as well as 8 all-­ terrain vehicles and 15,000 spare parts.65 As in both Panama and El Salvador, PRC Covid-19 diplomacy helped it to make substantial headway with the new, more cautious Abinader government. In the early phases of the pandemic, assistance from the PRC included providing 450,000 facemasks, other personal protective equipment, and 10,000 covid-19 tests. The PRC’s most impactful Covid-19 contribution to the Dominican Republic, however, was its sale of a million doses of Covid-19 vaccines from the Chinese company Sinovac, at a cost to the Dominican government of $19 million.66 That sale appeared to play a decisive role in motivating the Abinader government to reverse a very publicly announced decision in October 2020 to exclude Huawei from participation in the country’s 5G network.67

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The PRC Advance in El Salvador As with the Dominican Republic, El Salvador’s ties to the PRC prior to diplomatic recognition were minimal. They included import-export activities by well-connected Salvadoran businesspersons, some affiliated with the FMLN, and whose contacts in the PRC stemmed in part from their participation in the China-Salvador friendship committee. China’s pre-­ recognition presence in El Salvador also included a presence by both Huawei and ZTE in the Salvadoran cellphone and electronic device market. Prior to recognition of the PRC, however, Salvadoran exports to the PRC and the associated capabilities of the country’s trade promotion organization PROESA with respect to the PRC were very limited. As noted previously, the diplomatic recognition of the PRC by the leftist FMLN government of Salvador Sanchez Ceren in August 2018 differed from the two flips in the region that preceded it, in that functioned as the “last straw,” precipitating the strong US reaction toward the PRC advance across the region. Despite the strong US reaction, however, in many ways, the general pattern of China’s advance in El Salvador paralleled the other cases. By contrast to the cases of Panama and the Dominican Republic, the time between recognition of the PRC and political change in its new partner was shorter in the Salvadoran case. El Salvador President Salvador Sanchez Ceren’s August 2019 recognition of the PRC came less than 10 months before his June 2019 departure from office. By contrast, the Varela government in Panama had over two years between its June 2017 recognition of the PRC and its July 2019 departure to build its new relationship with the PRC. Similarly, the Medina government in the Dominican Republic had 27 months from its May 2018 recognition of the PRC and its August 2020 departure to advance business deals and other forms of cooperation. In the case of El Salvador, President Sanchez Ceren’s initial visit to Beijing in November 2018 was notably silent on specific commitments between the two countries. Modest initial fruits of the new relationship included a gift from the PRC of 3000 tons of rice and the discussion of $150 million for 13 possible future Chinese projects in the country.68 Because the government of El Salvador changed so soon following diplomatic recognition of China, by contrast to the other two cases, there was some discontinuity in El Salvador between the set of projects of interest discussed between the outgoing Sanchez Ceren administration and those

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pursued by the incoming administration of Nayib Bukele. As a second source of difference, the Bukele administration, despite its initially pro-US rhetoric, was much more willing than counterpart administrations in Panama and the Dominican Republic, to actively pursue major projects with the PRC. With the outgoing Sanchez Ceren administration, the cornerstone of China’s offering appeared to be the development of the Salvadoran port of La Union into a major multimodal hub port, including potential future access to neighboring Honduras and Nicaragua through the Gulf of Fonseca, which the three nations shared. PRC development of the port complex at La Union was also associated with a proposal to establish six special economic zones there in FMLN-dominated areas near the port, encompassing 14% of the territory of the country.69 Those special economic zones would provide special tax and regulatory treatment for Chinese companies using El Salvador as a point of access to Northern Triangle markets on one hand, as well as providing political benefit to Sanchez Ceren’s FMLN party through providing jobs where the party had a significant base of supporters.70 The Sanchez Ceren government attempted a hurried, less-than-­ transparent public auction process to develop the port. The effort was seen by many in the political opposition in the country as rigged to favor a (not-­then announced) Chinese bidder. In the end, the Japanese, who had leverage over the port concession due to their prior role in developing the facility itself, used that position, amid the controversy, to prevent the auction from going forward.71 Beyond infrastructure projects, in a manner similar to the other cases, some of the projects that went forward during this time included PRC establishment of a Confucius Institute at El Salvador’s main public university, the University of El Salvador (UES), with planning for the institute beginning in May 2019.72 Similar to the trajectory of PRC education cooperation in Panama and the Dominican Republic, the PRC leveraged the Confucius Institute at UES from be the very beginning, by sponsoring 35 El Salvadoran university students to study in the PRC, beginning that same year. As noted previously, the inauguration of Nayib Bukele in June 2021 initiated a partial “reset” of sorts, in the El Salvador–PRC relationship. On one hand, Bukele, like Laurentino Cortizo in Panama and Luis Abinader in the Dominican Republic, displayed a strong rhetorical commitment to pursue a closer relationship with the United States than that evidenced by

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his FMLN predecessor Salvador Sanchez Ceren. Indeed, in his interactions with the Trump administration in the United States, Bukele demonstrated a strong disposition to cooperate with the United States on immigration control and other politically delicate issues.73 Despite such promises of cooperation, in December 2019, Bukele traveled the PRC, securing commitments from the PRC for $500 million in commercial and development projects tailored to the particular interests of his administration.74 These included a sports stadium, a $40 million national library,75 and a tourist pier at La Libertad. It also included $200 million for a series of tourism investments along Salvador’s Pacific coast, in support of a concept advanced Bukele that the President called “surf city.”76 It further included construction of two water treatment facilities by Chinese firms,77 among other promises. In some ways, Bukele’s December 2019 visit to the PRC resembled the “first” state visit in the other two cases examined, insofar as the Chinese government promised to Bukele and his delegation of accompanying businesspersons, particular economic benefits of interest to the individuals in the group. These include commitments by the PRC to import more sugar, coffee, and other specialized products from the country.78 Despite such promises, as in the other two cases, a series of difficulties with the projects, compounded by the exigencies of Covid-19, temporarily paralyzed virtually all of the PRC initiatives. By late 2021, the Chinese sports stadium was still in the phase of location selection. Similarly, a site still had not yet been selected for the promised national library.79 With respect to the water-treatment facilities to be built at Ilopango and La Libertad by Chinese companies, the projects stalled when technical challenges led the Chinese builders to substantially increase the estimated price to complete both ($15 million in the case of Ilopango and $5–7 million in the case of La Libertad). 80 The tourist pier at the Salvadoran port of Libertad also experienced delays, but finally saw work begin in February 2021, following completion of a supporting highway bypass.81 With respect to Surf City, although there was relatively little progress on the project per se, Chinese businesspersons were reportedly actively engaged in the area in 2020 and 2021 looking for opportunities to buy land along the Salvadoran coast, including in the Department of La Libertad near El Salvador’s principal port of Acajutla, as well as in the department of Usulután.82

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Perhaps the biggest step the Salvadoran government took with the Chinese to advance its infrastructure projects occurred in May 2021. In that month, El Salvador’s newly seated Congress, with a supermajority from Bukele’s New Ideas party, ratified the government’s prior legal agreement with the PRC authorizing a series of projects to go forward with guarantees for the security, and other support for the Chinese companies doing the work.83 At approximately the same time, a massive multibillion proposal for a development project spanning from La Libertad to the Port of La Union came to public light,84 although the commitment of the Chinese to take the project forward was not clear.85 With respect to telecommunications, as noted previously, Huawei and ZTE had a significant presence even before El Salvador’s recognition of the PRC, supplying telephones and other devices to commercial providers, particularly Movistar and Digicel, and to a lesser degree, Claro and Tigo. Huawei even had its own dedicated customer service center in San Salvador.86 The Chinese company was further expected to be a major component supplier to 5G in El Salvador, through the country’s established commercial telecommunications provider, when the country rolled out the network.87 With respect to media, in September 2019, the Salvadoran cable network TVX joined China’s “Belt and Road media community,” even before President Bukele’s inauguration, permitting the channel to offer a range of Chinese content in El Salvador.88 During the Covid-19 pandemic, as in the other cases, the PRC donated personal protective gear, thermometers, and other supplies to the country, although it did not provide more sophisticated equipment to the country as it did elsewhere. By one calculation, from March 2020 through May 2021, El Salvador spent over $72.5 million on purchasing facemasks from China alone.89 Although the country initially procured AstraZeneca vaccine through India, and had a contract to procure vaccines through Pfizer, it also bought vaccine from China, receiving the doses in a highly publicized display at the airport with President Bukele present.90

Conclusion The prospect of future diplomatic changes from Taiwan to the PRC in the region makes the strategic dynamics described in this chapter very relevant to China’s advance in the region. The victory of the Saint Lucia Labor

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Party (SLP), headed by Phillip Pierre, in that nation’s July 2021 elections91 heightens prospects for a switch to the PRC there, given that the SLP switched Saint Lucia’s diplomatic relations to the PRC during its last period in power, although the new government had not indicated an intention to change its diplomatic relations as of the time this book went to press. In Haiti, the political crisis following the assassination of President Jovenil Moise raises the prospects of a diplomatic change to the PRC there when the postponed elections originally scheduled for November 2021 eventually occur, or regime change occurs through other means. The endemic poverty of the country, complicated by a 7.2 magnitude earthquake in 2021 and Tropical Storm Grace,92 leaves whatever government succeeds the transitional regime of Ariel Henry badly in need of the type of loans and investment the PRC could offer. In Central America, Xiomara Castro, who won Honduras’ November 2021 presidential elections, has publicly pledged to immediately establish commercial and diplomatic relations with the PRC if elected.93 Although her vice-presidential running mate Salvador Nasrallah has suggested that she may not change relations. Other states such as Guatemala, possibly frustrated with US pressure on corruption and human rights issues, could similarly turn to the PRC, with the hopes of opening up the country for PRC Chinese resources that would support a turn away from that type of transparency, rule of law, and cooperation with western institutions demanded by the United States. In all of these current and potential future cases, this chapter has shown that the question of diplomatic change has strategic significance for the PRC, not only furthering the international isolation of Taiwan but also advancing its other strategic commercial and political objectives by opening up multiple avenues for rapid advance of PRC presence and influence. As the United States develops strategies to resist the most predatory aspects of the PRC’s advance, it is important for it to recognize the special threat presented by such diplomatic flips and work with its Taiwanese partners to resist them wherever possible. Such flips are even more worrisome when they correspond to the arrival in power of a politically sympathetic leftist government, or a corrupt one of any ideology, which seeks to avoid financial or criminal accountability. The dangerous reinforcing relationship between engagement with China and leftist authoritarian populism is discussed in Chap. 7.

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Notes 1. Joseph Choi, “Nicaragua breaks diplomatic relations with Taiwan, recognizes Chinese sovereignty,” The Hill, December 9, 2021, https:// thehill.com/policy/international/585253-­nicaragua-­breaks-­diplomatic-­ relations-­with-­taiwan-­recognizes-­chinese. 2. Sharon Ardon, “?Xiomaro Castro prometió establecer relaciones con china comunista?,” El Heraldo, https://www.elheraldo.hn/ factchecking/1494477-­5 04/xiomara-­c astro-­c hina-­c omunista­relaciones-­taiwan. 3. Based on the author’s personal experience talking with businesspersons who have accompanied such delegations. 4. “China’s Overseas United Front Work: Background and Implications for the United States” U.S.-China Security and Economic Review Commission, October 11, 2021, https://www.uscc.gov/research/chinas-­ overseas-­united-­front-­work-­background-­and-­implications-­united-­states. 5. See Preethi Amaresh, “China’s Stadium Diplomacy: All that Glitters is Not Gold,” The Diplomatist, November 3, 2020, https://diplomatist. c o m / 2 0 2 0 / 1 1 / 0 3 / c h i n a s -­s t a d i u m -­d i p l o m a c y -­a l l -­t h a t ­glitters-­is-­not-­gold/. 6. See “St. Lucia Denounced by China for Diplomatic Ties With Taiwan,” Fox News, May 2, 2007, https://www.foxnews.com/story/ st-­lucia-­denounced-­by-­china-­for-­diplomatic-­ties-­with-­taiwan. 7. See, for example, Tom Shattuck, “Taiwan, Pivoting Allies, and American Interests Abroad,” Foreign Policy Research Institute, https://www.fpri. org/article/2018/08/taiwan-­p ivoting-­a llies-­a nd-­a merican-­i nterests­abroad/. 8. “Posible relación con China Continental,” ABC Digital, http://www.abc. com.py. June 7, 2007. 9. Jenny W.  Hsu, “Panama respects Taiwan, China ‘truce’: ambassador,” Taipei Times, February 6, 2010, http://www.taipeitimes.com. See also “Taiwan corteja a Martinelli,” La Prensa, December 27, 2009, http:// www.prensa.com/politica/Taiwan-­cortejaMartinelli_0_2735726516.html 10. “Honduras abrirá relaciones diplomáticas con China,” La Prensa, December 8, 2009, http://www.laprensa.hn/honduras/536420-­97/ honduras-­abrira-­relaciones-­diplomaticascon-­china. 11. “El Salvador anuncia que restablecerá relaciones con Cuba,” Diario Libre, March 19, 2009, https://www.diariolibre.com/actualidad/el-­salvador­restablecer-­relaciones-­con-­cuba-­NADL192719. 12. R. Evan Ellis, “China’s Activities in the Americas,” Testimony to the joint hearing of the Subcommittee on the Western Hemisphere and the Subcommittee on Asia and the Pacific, U.S.  House of Representatives

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Foreign Affairs Committee, September 10, 2015, http://docs.house. gov/meetings/FA/FA07/20150910/103931/HHRG-­1 14-­F A07-­ Wstate-­EllisE-­20150910.pdf. 13. Ellis, “Taiwan’s Struggle for Partners and Survival,” 2018. 14. Robert L. Rothberg, “Giant China Recognizes Tiny Gambia,” China-US Focus, March 31, 2016, https://www.chinausfocus.com/foreign-­policy/ giant-­china-­recognizes-­tiny-­gambia. 15. See R.  Evan Ellis, “What Panama’s Recognition of China Means for America’s Backyard,” World Politics Review, October 5, 2017, https:// www.worldpoliticsreview.com/trend-­l ines/23316/what-­p anama-­s -­ recognition-­of-­china-­means-­for-­america-­s-­backyard. 16. The FMLN, in its prior incarnation as a guerilla movement, had fought to overthrow the US-backed Salvadoran government. Salvador Sanchez Ceren had been a guerilla leader who had fought against US-backed forces in some of the bloodiest battles of that conflict, yet during his period as El Salvador’s President, had sought to maintain a positive relationship with the United States, in deference to the two million Salvadorans living in the United States and the importance to El Salvador’s economy of the remittances that they sent to families in El Salvador. 17. “U.S. recalls diplomats in El Salvador, Panama, Dominican Republic over Taiwan,” Reuters, September 7, 2018, https://www.reuters.com/article/ us-­usa-­china-­taiwan-­idUSKCN1LO00N. 18. “Panama Canal: Japan now No. 2 user as US-China trade suffers,” ABC News, June 13, 2019, https://abcnews.go.com/International/wireStory/panama-­canal-­japan-­now-­user-­us-­china-­trade-­63703447. 19. “Grupo chino arranca construcción de puerto de 900 millones dólares en Panamá,” El Siglo, June 6, 2017, http://elsiglo.com.pa/panama/ grupo-­c hino-­a rranca-­c onstruccion-­p uerto-­9 00-­m illones-­d olares-­ panama/24005859. 20. “China pagó $143 millones a expresidente de Panamá para romper relaciones con Taiwán,” 2019. 21. Paulina Garzon, “China’s Silk Road Reaches the Panama Canal,” Dialogo Chino, December 5, 2017, https://dialogochino.net/en/infrastructure/ 10233-­chinas-­silk-­road-­reaches-­the-­panama-­canal/. 22. “Varela China bound with large delegation,” Newsroom Panama, November 10, 2017, https://www.newsroompanama.com/news/ varela-­china-­bound-­large-­delegation. 23. Garzon, 2017. 24. Kinling Lo, “Warm words from Xi Jinping for Panama on first state visit by a Chinese leader,” December 3, 2018, https://www.scmp.com/news/ china/diplomacy/article/2176209/warm-­words-­xi-­jinping-­panama-­first­state-­visit-­chinese-­leader.

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25. Don Giolzetti, “China’s Front Door to America’s Backyard,” The Diplomat, June 28, 2019, https://thediplomat.com/2019/06/chinas­front-­door-­to-­americas-­backyard/. 26. See Ellis, “The evolution of Panama-PRC relations,” 2018. 27. “China estimates cost of Panama high-speed rail line at $4.1 bn,” EFE, March 15, 2029, https://www.efe.com/efe/english/business/ c h i n a -­e s t i m a t e s -­c o s t -­o f -­p a n a m a -­h i g h -­s p e e d -­r a i l -­l i n e -­a t -­4 -­1 -­ bn/50000265-­3926478. 28. See Ellis, “The evolution of Panama-PRC relations,” 2018. 29. See Ellis, “The evolution of Panama-PRC relations,” 2018. 30. “Solución de ciudad segura salvaguarda el Puerto de Colón en Panamá Parte I,” Huawei official website, February 7, 2020, https://forum.huawei.com/enterprise/es/soluci%C3%B3n-­de-­ciudad-­segura-­salvaguarda-­ el-­p uer to-­d e-­c ol%C3%B3n-­e n-­p anam%C3%A1-­p ar te-­i /thread/ 600246-­100323. 31. See Ellis, “The evolution of Panama-PRC relations,” 2018. 32. “Jiangxi Copper to acquire stake in PIM Cupric Holdings for $1.1bn,” Mining Technology, December 10, 2019, https://www.mining-­technology. com/news/jiangxi-­copper-­acquire-­stake-­fqm/. 33. See Ellis, “The evolution of Panama-PRC relations,” 2018. 34. “ESPECIAL: Abre sus puertas el primer Instituto Confucio en Panamá,” Xinhua, June 17, 2018, http://spanish.xinhuanet.com/2018-­06/17/ c_137260350.htm. 35. “Relación Entre Panamá Y China Continúa Fortaleciéndose Con Visita de Alto Miembro Del Buró Político del Comité Central Del Partido Comunista de China,” Ministry of Foreign Relations of Panama, official website, July 17, 2018, https://mire.gob.pa/relacion-­entre-­panama-­y-­ china-­continua-­fortaleciendose-­con-­visita-­de-­alto-­miembro-­del-­buro-­ politico-­del-­comite-­central-­del-­partido-­comunista-­de-­china/. 36. Matt Youkee, “Panama the new flashpoint in China's growing presence in Latin America,” The Guardian, November 28, 2018, https://www.theg u a r d i a n . c o m / w o r l d / 2 0 1 8 / n o v / 2 8 / p a n a m a -­c h i n a -­u s -­l a t i n -­ america-­canal. 37. “Advisory on the Financial Action Task Force-Identified Jurisdictions with Anti-Money Laundering and Combating the Financing of Terrorism Deficiencies and Relevant Actions by the United States Government,” U.S.  Treasury Financial Crimes Enforcement Network, official website, July 12, 2019, https://www.fincen.gov/sites/default/files/ advisor y/2019-­0 7-­1 2/FATF%20Advisor y%20June%202019%20 FINAL%20508.pdf 38. Zhu Liangtao and Tang Ziyi, “Anxin Trust's Actual Controller Detained on Illegal Lending Allegation,” Caixin Global, June 8, 2020, https://

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www.caixinglobal.com/2020-­06-­08/anxin-­trust-­controller-­detained-­on-­ illegal-­lending-­allegation-­101564612.html. 39. “Jiangxi Copper sells shares in First Quantum,” 2020. 40. Ellis, “China’s Advance in Panama: An Update,” 2021. 41. Michelle Labrut, “Panama Renews 25-year concession to Hutchison’s Panama Ports,” Seatrade Maritime News, June 25, 2021, http://www. olgn.org/wp-­c ontent/uploads/2021/06/16.Seatrade-­P anama-­ R e n e w s -­2 5 -­y e a r-­c o n c e s s i o n -­t o -­H u t c h i s o n s -­P a n a m a -­P o r t s . pdf#:~:text=Michele%20Labrut%20%7C%20Jun%2025%2C%202021%20 Panama%20Maritime,and%20Cristobal%20on%20the%20Panama%20 Canal%20Atlantic%20entrance. 42. Ellis, “China’s Advance in Panama: An Update,” 2021. 43. Ellis, “China’s Advance in Panama: An Update,” 2021. 44. “Aprueban creación de la primera zona franca digital, en San Miguelito,” En Segundos, July 16, 2019, https://ensegundos.com.pa/2019/07/16/ aprueban-­creacion-­de-­la-­primera-­zona-­franca-­digital-­en-­san-­miguelito/. 45. Ellis, “China’s Advance in Panama: An Update,” 2021. 46. “ICBC Panama Branch is Granted License,” International Commerce Bank of China, official website, June 24, 2020, http://www.icbc.com.cn/icbc/ en/newsupdates/icbc%20news/ICBCPanamaBranchIsGrantedLicense.htm. 47. Ellis, “China’s Advance in Panama: An Update,” 2021. 48. “Australia y China: minería responsable en RD,”Listin Diario, January 21, 2019, https://listindiario.com/las-­mundiales/2019/01/21/550199/ australia-­y-­china-­mineria-­responsable-­en-­rd. 49. “China busca invertir en República Dominicana,” El Nuevo Dia, May 5, 2018, https://www.elnuevodia.com/noticias/mundo/notas/ china-­busca-­invertir-­en-­republica-­dominicana/. 50. “Is the Dominican Republic’s Pivot to China Paying Off?” Latin American Advisor, May 9, 2019, https://www.thedialogue.org/analysis/ is-­the-­dominican-­republics-­pivot-­to-­china-­paying-­off/. 51. Ellis, “Chinese Engagement with the Dominican Republic  – An Update,” 2021. 52. Ellis, “Chinese Engagement with the Dominican Republic  – An Update,” 2021. 53. “Pelegrín dice propuesta de embajador de China sobre puerto Manzanillo es alarmante,” El Caribe, February 2, 2020, https://www.elcaribe.com. do/destacado/pelegrin-­dice-­propuesta-­de-­embajador-­de-­china-­sobre-­ puerto-­manzanillo-­es-­alarmante/. 54. Ellis, “Chinese Engagement with the Dominican Republic  – An Update,” 2021. 55. Hillman Pimentel, “Empresas chinas esperan permisos para invertir US$870 millones en República Dominican,” El Dia, April 11, 2018,

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https://eldia.com.do/empresas-­chinas-­esperan-­permisos-­para-­invertir-­ us870-­millones-­en-­republica-­dominicana/. 56. Valeria Castillo, “Dominican Republic warms to China,” Dialogo Chino, February 14, 2019, https://dialogochino.net/en/trade-­investment/22177dominican-­republic-­warms-­to-­china/. 57. “China busca invertir en República Dominicana,” 2018. 58. Ellis, “Chinese Engagement with the Dominican Republic  – An Update,” 2021. 59. “Huawei propone a Indotel mejorar la conectividad en el país,” El Dinero, September 14, 2020, https://eldinero.com.do/120733/ huawei-­propone-­a-­indotel-­mejorar-­la-­conectividad-­en-­el-­pais/. 60. Raymond Perez Reyes, “El país cumple 2 años de sus nexos con China,” Listin Diario, June 20, 2021, https://listindiario.com/economia/2020/04/30/615370/el-­pais-­cumple-­2-­anos-­de-­sus-­nexos-­con-­ china. 61. “Inauguran en INTEC primer Instituto Confucio de la República Dominicana,” INTEC, May 30, 2019, https://www.intec.edu.do/ p r e n s a / n o t a s -­d e -­p r e n s a / i t e m / i n a u g u r a n -­e n -­i n t e c -­p r i m e r­instituto-­confucio-­de-­la-­republica-­dominicana. 62. Perez Reyes, 2021. 63. Ellis, “Chinese Engagement with the Dominican Republic  – An Update,” 2021. 64. “República Dominicana y China firman segundo acuerdo de cooperación económica y técnica,” Diario Libre, March 22, 2021, https://www.diariol i b r e . c o m / e c o n o m i a / r e p u b l i c a -­d o m i n i c a n a -­y -­c h i n a -­f i r m a n ­segundo-­acuerdo-­de-­cooperacion-­economica-­y-­tecnica-­GB25173674. 65. “Gobierno dominicano recibe 148 vehículos donados por China,” Listin Diario, June 21, 2021, https://listindiario.com/la-­republica/ 2020/12/23/649494/gobierno-­d ominicano-­r ecibe-­1 48-­v ehiculos-­ donados-­por-­china. 66. “El país negoció mejor precio por las vacunas chinas,” Listin Diario, March 18, 2021, https://listindiario.com/la-­republica/2021/03/18/661692/ el-­pais-­negocio-­mejor-­precio-­por-­las-­vacunas-­chinas. 67. Guillermo Moreno, “Una reversa en la política exterior,” Diario Libre, November 30, 2020, https://www.diariolibre.com/opinion/en-­directo/ una-­reversa-­en-­la-­politica-­exterior-­CB23007050. 68. Ana-Catherine Brigida, “What next for China and El Salvador?” Dialogo Chino, February 8, 2019, https://dialogochino.net/en/ trade-­investment/22556-­what-­next-­for-­china-­and-­el-­salvador/. 69. Benjamin Russell, “What a Controversial Deal in El Salvador Says About China’s Bigger Plans,” Americas Quarterly, April 12, 2019, https://www.

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americasquarterly.org/article/what-­a-­controversial-­deal-­in-­el-­salvador-­ says-­about-­chinas-­bigger-­plans/. 70. Alex Stoumbelis and Rafael Garcia, “El Salvador Free Trade Zone Plan Sparks Debate,” Upside-Down World, August 3, 2018, https://upsidedownworld.org/archives/el-­s alvador/el-­s alvador-­f ree-­t rade-­z one­plan-­sparks-­debate/. 71. See Ellis, “Chinese Engagement in El Salvador: An Update,” 2021. 72. “Inician reuniones para la creación del Instituto Confucio en la UES,” Universidad de El Salvador, Official Website, May 15, 2019, https://redcomunica.csuca.org/index.php/universidad-­d e-­e l-­s alvador-­u es/ inician-­reuniones-­para-­la-­creacion-­del-­instituto-­confucio-­en-­la-­ues/, 73. “Secretario Michael Pompeo fortalece lazos de cooperación con El Salvador,” U.S.  Embassy in El Salvador, official website, July 21, 2019, https://sv.usembassy.gov/es/pompeo-­fortalece-­lazos-­con-­el-­salvador/. 74. Angel Bermudez, “Bukele visita China: el histórico acercamiento de El Salvador a Pekín y la ‘gigantesca cooperación’ que recibe a cambio,” BBC Mundo, December 4, 2019, https://www.bbc.com/mundo/ noticias-­america-­latina-­50666592. 75. Ken Rivera, “China ofrece nueva biblioteca y El Salvador aún sin Plan Nacional de Lectura,” ElSalvador.com. December 19, 2019, https://historico.elsalvador.com/historico/667341/el-­salvador-­aun-­sin-­un-­plan-­ nacional-­de-­lectura-­tras-­anuncio-­de-­nueva-­biblioteca-­nacional-­ofrecida-­ por-­china.html. 76. “Surf's up for poor kids seeking a better future in El Salvador,” Global Times, May 6, 2020, https://www.globaltimes.cn/content/ 1187535.shtml. 77. Roberto Alas, “China invertirá cerca de $85 millones en plantas de agua potable y tratamiento en Ilopango y La Libertad,” ElSalvador. com, December 10, 2019, https://historico.elsalvador.com/historico/667003/china-­invertira-­cerca-­de-­85-­millones-­en-­plantas-­de-­agua-­ potable-­y-­tratamiento-­en-­ilopango-­y-­la-­libertad.html. 78. “China welcomes El Salvador to jointly build Belt and Road,” CGTN, December 3, 2019, https://news.cgtn.com/news/2019-­12-­03/Xi-­holds-­ welcome-­c eremony-­f or-­v isiting-­S alvadoran-­p resident-­M 7Jd05efCM/ index.html. 79. Ellis, “Chinese Engagement in El Salvador: An Update,” 2021. 80. Ellis, “Chinese Engagement in El Salvador: An Update,” 2021. 81. Rocio Martinez, “VIDEO: Así proyecta China transformar la zona turística del Puerto de La Libertad y Surf City,” Diario El Salvador, February 27, 2021, https://diarioelsalvador.com/embajadora-­de-­china-­anuncia-­el-­ inicio-­de-­un-­proyecto-­para-­la-­transformar-­el-­turismo-­en-­el-­puerto-­de-­la-­ libertad/47371/.

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82. Ellis, “Chinese Engagement in El Salvador: An Update,” 2021. 83. “El Salvador ratifies deal with China,” Taipei Times, May 20, 2021, https://www.taipeitimes.com/News/world/ar chives/2021/ 05/20/2003757749. 84. Dilanian, et al., 2021. 85. Carlos Lopez Contreras, “Zona económica de libre comercio de El Salvador,” La Tribuna, May 22, 2021, https://www.latribuna. hn/2021/05/22/zona-­economica-­de-­libre-­comercio-­de-­el-­salvador/. 86. “Huawei abre la primera tienda de servicio en El Salvador,” IT Now, January 17, 2020, https://revistaitnow.com/huawei-­abre-­la-­primera­tienda-­de-­servicio-­en-­el-­salvador/. 87. Ellis, “Chinese Engagement in El Salvador: An Update,” 2021. 88. “TVX de El Salvador se integra a comunidad de medios Franja y Ruta,” Tinta China, September 6, 2019, https://www.tintachina.net/1058-­2/. 89. Jessica Guzman, “En 15 meses, El Salvador le compra a China $72.5 millones en mascarillas,” El Salvador, July 27, 2021, https://www.elsalvador. c o m / n o t i c i a s / n e g o c i o s / p a n d e m i a -­i m p o r t a c i o n e s -­ mascarillas-­china-­covid-­19-­coronavirus-­bcr/863381/2021/. 90. Luis Rojas, “El Salvador receives 1st batch of Chinese-made COVID-19 vaccine,” Xinhua, March 29, 2018, https://www.msn.com/en-­xl/news/ other/el-­salvador-­receives-­1st-­batch-­of-­chinese-­made-­covid-­19-­vaccine/ ar-­BB1f5BK8. 91. “SLP Wins Landslide Victory in Saint Lucia Elections,” Saint Lucia Times, July 27, 2021, https://stluciatimes.com/slp-­wins-­landslide-­victory-­in­saint-­lucia-­elections/. 92. Joe Parkin Daniels, “Tropical Storm Grace’s heavy rains pour misery on Haiti earthquake survivors,” The Guardian, August 17, 2021, https:// w w w. t h e g u a r d i a n . c o m / g l o b a l -­d e v e l o p m e n t / 2 0 2 1 / a u g / 1 7 / haiti-­tropical-­storm-­grace-­earthquake-­rain. 93. “Taiwan warns Honduras against ‘flashy, false’ China promises,” Hong Kong Free Press, September 7, 2021, https://hongkongfp.com/2021/09/07/ taiwan-­warns-­honduras-­against-­flashy-­false-­china-­promises/.

CHAPTER 7

The Question of Leftist Populist Regimes

Overview As a complement to the role of diplomatic recognition in opening up Latin American countries to the rapid advance of Chinese presence and influence, the relationship between engagement with the PRC, and the consolidation of power by leftist populist regimes, is particularly troubling. As noted earlier, the PRC engages with and seeks to expand its commercial position and influence in regimes of all types across the region. Nonetheless, it is with leftist populist regimes that the PRC finds some of its greatest openings and is able to secure some of its most significant and worrisome advances. This chapter examines the strategically important and dangerous dynamics of PRC engagement with leftist populist regimes in Latin America and the Caribbean, as a significant contributor to both the advance of PRC strategic interests there, and to the long-term undermining of democratic governance in the region. In the process, it also looks at the difficulties and risks to the PRC and its companies particular to their engagement with such regimes, in and with the populist country itself, as well as in the PRC’s broader relations in the region and with the United States and other extra-regional actors. In a manner similar to the approach taken in Chap. 6, the present chapter examines the four most prominent cases of PRC engagement with Latin American leftist populist regimes: Venezuela, Ecuador under Rafael © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_7

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Correa, Bolivia under Evo Morales, and Argentina under Christina Fernandez, in order to showcase the common elements, as well as the differences particular to each case.1 It shows how, in each case, the PRC took advantage of opportunities and needs created by the arrival in power of populist governments, in order to pursue China’s own interests. The chapter examines how, in each case, the economic and other support flowing out of PRC engagement supported the survival of those populist regimes as they consolidated power, dismantling checks and balances from other democratic institutions and opposition bases of power, and ultimately democratic structures themselves, leaving those populist governments in a position to deepen cooperation with the PRC and extend their power in the region in ways hostile and detrimental to the US and Western interests. This chapter further examines Cuba as a special, complex case of PRC engagement with an established leftist regime. It ends with an examination of contemporary and future cases of concern in the region, including the governments of Pedro Castillo in Peru, Andres Manuel Lopez Obrador (AMLO) in Mexico, Xiomara Castro in Honduras, Gabriel Boric in Chile, and potential turns to the radical left in Colombia and Brazil, among others.

The Mutually Reinforcing Cycle Between China and Leftist Populist Regimes During the Cold War, the Soviet Union actively worked to bring to power, and protect Communist and other politically aligned governments in Latin America and the Caribbean. It did so through a varied combination of electoral mechanisms, support for insurgencies, and other efforts to destabilize the pro-US status quo. The Soviet Union was more successful in some of those efforts than in others. Notable examples of success, whether intended or otherwise, include Soviet backing of the 1959 Communist Revolution in Cuba, the (initially democratically elected) government of Salvador Allende in Chile, the Sandinista National Revolutionary Front (FSLN) that took power in Nicaragua in 1979, and the Farabundo Marti National Liberation FMLN) Movement that attempted to overthrow the government of El Salvador, among others. During China’s revolutionary period under Mao Zedong, as noted previously, the PRC did to some extent support subversive movements, including broadcasting revolutionary messages in indigenous languages such as Quechua in the Andean highlands,2 as part of the same promotion of developing world anticolonial sentiments through which the PRC supported independence movements and groups in the wars of national liberation in Africa.3

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Despite this history, there is little evidence that the PRC today is actively, publicly working to bring to power populist leftist regimes in the hemisphere, or overtly supporting their anti-US political agendas. Indeed, with anti-US regimes such as those of Hugo Chavez and Nicholas Maduro in Venezuela, the PRC has consistently sought to downplay the political implications of its economic and other cooperation.4 The PRC has not had a visible role in any of the twenty-first-century cases in which leftist populist governments have taken power in Latin America. In each, including the election of Hugo Chavez in Venezuela in 1998, Rafael Correa in Ecuador in 2006, and Evo Morales in Bolivia the same year, the key factors in the elections that initially brought each to power included endemic corruption, and a loss of confidence within the population in the ability of the established parties to address the enduring challenges of their societies. Sources of frustration for the population included poor government performance, persistent profound social and economic inequality, a perceived lack of justice and equal application of laws, and the absence of sufficient economic opportunity for broad segments of the population.5 The loss of faith among key segments of the population regarding the ability of democracy and private sector, market-­ oriented economies to make things acceptably better, weakened their commitment to defend democracy, rule-of-law, private enterprise, and similar values when the newly elected populists then sought to change the rules of the game. Not only did the PRC not have a significant role in bringing leftist populist regimes to power. It also generally did not actively support their consolidation of power, hijacking, and ultimately destroying the democratic institutions that brought them there, although it did nothing to object to it. The process, initially pioneered by Hugo Chavez in Venezuela, appears to have been principally developed through intellectual support from Cuba,6 then adapted with more or less success to the different conditions of each populist government. Once the leftist populist regimes did come to power and began taking actions to alter democratic institutions and move against the free press, opponents, and private sector interests, however, PRC economic support played a fundamental role in their successful consolidation of that process. Specifically, Chinese loans and purchases of the populist regimes commodities, as Western commercial partners began to pull out and Western institutions became reluctant to provide new credit, gave these regimes

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the financial resources and associated political cover to consolidate power and transform their countries and institutions. Such Chinese support generally has involved contracts employing creative, often intrusive mechanisms that ensure China gets paid. Notably, the Chinese have principally worked through secure loans and commodity purchases, providing little if any real investment putting their own capital at risk. The Chinese have been notably silent on whether the new populist partners are violating their own constitutions existing legal frameworks and prior contracts, let alone democracy, freedom of expression, human rights, or other values. In short, Chinese economic and technical support, in pursuit of the PRC’s own economic and strategic interests, has played an important, albeit not determinative, role in helping leftist populists to successfully execute a self-conscious plan to hijack and ultimately destroy Latin American democracies.7 China, in its engagement with such regimes, has been, at least initially, cautious over damaging its relationships with the United States and governments sympathetic to it in the region by appearing to ally itself against the United States.8 At the same time, China has particularly benefited from the unique economic opportunities and strategic benefits arising from engaging these regimes. First, leftist populist regimes are by nature open to doing business with the PRC as an alternative to the US and Western institutions and investors. Moreover, they are generally receptive to doing so through nontransparent “government-to-government” deals objectionable to Western firms and institutions who generally prefer fair, free-market competition. Second, the consolidation of power by the leftist regimes by appointing their personnel to key institutions, including judicial oversight organizations, plus the work of those populist to change bureaucratic rules and dismantle institutional checks and balances on contracting, facilitates engagements with the PRC in nontransparent, noncompetitive ways, including through large, multi-sectoral government-to-government contracts. Third, the previously noted loss of loans, investment, and other support from Western companies and institutions during the populist regime’s consolidation of power increases their need for Chinese resources, and thus enhances PRC leverage for securing deals on terms most advantageous to China. This includes willingness of the populist governments to accept credit contracts linked to the delivery of their commodities to the PRC, cross-default clauses, and other instruments to ensure that

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PRC-based banks and companies get paid. It may superficially appear naive for Chinese banks and companies to work with leftist populist regimes who have shown themselves to be corrupt, often inept, and unreliable, having violated prior contractual and constitutional obligations. Yet part of the key for successful PRC engagement with such actors is to structure deals that are both lucrative and advantageous for it, and which ensure that the Chinese get paid, whatever the outcome of the project9 or the disposition of the regime to renege on its commitment. Fourth, the consolidation of leftist populist regimes generally is associated with a weakening of its administrative technical capacities in areas such as planning, evaluation, and law enforcement. The rewriting of constitutions and laws, and the restructuring of institutions, introduces uncertainty. Personnel appointed by the new leftist populist governments are often selected for political loyalty rather than technical competence, faced with the need to impose the new government’s will on bureaucracies filled with personnel socialized in the prior system, and sympathetic to its policies and ways of operating. Confounding such challenges, the willingness of the new leftist populist executive to enter into “government-to-­ government” deals takes the inexperienced persons of the new government into territory into which they are unfamiliar, but where the Chinese have long-­standing experience and competitive advantages. In short, while Latin America’s leftist populist regimes may not deliberately seek to economically deliver the country and its resources into the hands of PRC, there are multiple reinforcing dynamics through which the deals with the PRC signed by such regimes tend to strongly favor China. Beyond the initial consolidation of power by Latin American populist regimes, the dynamic between them and the PRC includes a number of reinforcing “feedback” effects that deepen the relationship, both benefiting the PRC and sustaining the populist regime in power beyond what might have been its trajectory in an earlier era. These dynamics include not only China supplying resources needed by populist regimes as they consolidate power but also it providing technology solutions to help those regimes identify and suppress dissent, thus helping China’s authoritarian friends to control their own populations, leveraging solutions used for such purposes in China itself. These include telecommunications and internet management tools embedded in the architectures that companies such as Huawei provide to the region, as well as surveillance architectures such as ECU-911 in Ecuador and BOL-110 in Bolivia. They also include systems for channeling public goods to those who cooperate with the

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regime, such as the “Fatherland Identity Card” supplied by Chinese firm ZTE to the populist government in Venezuela. A further example, although not in the region, is the technology was a capability built into Xiaomi phones (being distributed in Lithuania), allowing the censorship of certain undesirable terms from the social media operating on those phones.10 Once authoritarian populist regimes have consolidated power, in turn, they are both more able and disposed to deepen cooperation with the PRC in other ways, including in military affairs, surveillance architectures, and other projects, in ways that far exceed what more Western-oriented governments would be willing or able to do. Indeed, the most significant Chinese military sales and engagements in the region, space activities, surveillance, and intrusive information architectures have occurred under leftist populist regimes, particularly Venezuela, Ecuador under Rafael Correa, Bolivia, Argentina, and Cuba. Moreover, the trend goes beyond Latin America. A study by the Center for Strategic and International Studies found that 71% of Huawei deployments of “safe cities” surveillance architectures globally occurred in countries categorized as “not free” or only partially “free.”11 While working with authoritarian populist regimes provides considerable opportunities for both the PRC and its leftist populist counterparts, they are almost always fraught with challenges for the PRC and its companies as well. First, although the PRC is often able to secure contractual commitments on highly advantageous terms, including mechanisms and guarantees for repayment, the execution of the corresponding projects is often associated with enormous administrative inefficiency, corruption, and other difficulties12 that impede the ability of the Chinese partner to do the work and secure the authorization from the government to get paid. Controversial and failed projects in populist regimes create reputational damage for the Chinese firm doing the work, as well as tainting the image of the PRC itself. Second, the deepening of populism is typically associated with a deterioration of the security environment in which Chinese companies have to operate. This includes expanded crime in the context of politicized and often corrupted police, expanding risks to Chinese companies and workers from extortion, robbery, and other dangers. Ironically, Chinese merchants and executives are often particularly vulnerable targets, because they are both very visible, and presumed to have significant resources, often

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including cash. With the deterioration of conditions in Venezuela, for example, tens of thousands of Chinese shopkeepers and other businesspersons were forced to flee, in part, over threats to their personal safety.13 Third, although China has sought to avoid associating itself with the radical, anti-US agenda and actions of leftist populist states such as Venezuela, it is not entirely possible for it to secure the economic benefits of the relationship while escaping association with the agenda and actions of such partners. The writing of Latin America–facing Chinese scholars makes it clear that the PRC has long perceived US sensitivity over their relations with leftist populist states in the region.14 During the Trump administration, for example, PRC support for such regimes became one of multiple reasons that the administration looked to the PRC as a threat. President Trump’s Secretary of State Mike Pompeo, for example, emphasized how PRC financing for Venezuela helped prolong that nation’s crisis.15 The balance of this chapter examines each of the four cases of PRC engagement with leftist populist regimes in twenty-first-century Latin America, to see how it has played out in specific contexts.

China in Venezuela As the first of the Latin American states to undergo a leftist populist transformation during the twenty-first century, Venezuela was in many ways the template for PRC initiatives with such governments, as well as for China’s attempts to balance policies toward them, manage risks, and learn from mistakes. Because of the concentration of Venezuela’s economy on oil, the magnitude of its associated resources, and Venezuela’s special ties to Cuba, the trajectory of its relationship with China was somewhat distinct from those of Ecuador, Bolivia, and Argentina, which followed. As will be noted in subsequent sections, however, there are clearly parallels among the cases, which overlapped in time. Chinese oil companies had a small foothold in Venezuela prior to the election of Hugo Chavez in 1998. This foothold included a previously noted CNPC contract, dating from 1997,16 for development of the Intercampo block in the Maracaibo basin. China’s early economic steps with the Chavez regime as it began to consolidate its power include a joint venture between CNPC and Venezuelan national oil company PDVSA, “Sinovensa.” The joint venture was established in 2001 to extract a heavy,

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high-sulfur tarlike petroleum product, “orimulsion” from the tar sands of the Orinoco River basin. Although the PRC recognized Venezuela in 2001 as a “Strategic development partner,”17 the lack of precedent for significant Chinese expansion in the region, combined with political and economic uncertainty from resistance to the Chavez regime in Venezuela (including Chavez’s temporary expulsion in 2002, and the subsequent general strike from 2002–2003), delayed China’s first major economic collaboration with the Chavez. Indeed, major projects between the two did not begin to emerge until after Hugo Chavez won the recall referendum challenge to his presidency in 2004, and subsequently traveled to the PRC in December of that year to sign a series of new agreements.18 These included cooperation in the petroleum sector renewing orimulsion sales to China, and establishing the first petroleum-backed framework for Chinese loans to Venezuela, the $6 billion “Heavy Investment Fund.”19 These agreements set the stage for the PRC credit assurance agency Sinosure to give its green light for major loans to Venezuela from the two key PRC policy banks: China Development Bank and Import-Export Bank of China. Despite these steps, the Heavy Investment Find was not actually finalized and funds from it dispersed until 2007. Its key innovation was notably linking the credit provided through banks in China, paying Chinese companies for work done and products provided in Venezuela, with repayment through oil extracted in Venezuela by Chinese companies.20 Similar “loans-for-oil”21 arrangements had actually been used previously by Chinese companies extracting resources and performing infrastructure work in African countries such as Angola,22 yet Venezuela was the first such implementation in the Western Hemisphere. The loans were structured to maximize Chinese benefit while reducing risk. Although some of the funds were disbursed in dollars, the majority was credit for Chinese firms doing approved work projects, such as the famous $7.5 billion Tinoco to Annaco rail line, thermoelectric plants, work on the Guri hydroelectric facility, or other matters negotiated by the two regimes. The most common vehicle for paying down the credit line was the previously mentioned CNPC-PDVSA joint oil venture Sinovensa. Through it, CNPC effectively extracted the oil from the ground working with PDVSA, then sent the oil to its own subsidiary China Oil, at the port, allowing the Chinese to realize the value added of transporting the oil and selling it, generally to the same Texas-based refineries that PDVSA sold its oil to directly before the deal.23 While the Chinese did not acquire

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Venezuelan oil at substantial submarket prices, they did profit handsomely from realizing the value added from the transport and sale, as well as from the mediation and service fees, which they charged for the deal. Such fees, and the entities to which support contracts were given, also created substantial opportunities for the diversion of funds through graft and corruption both on the Chinese and Venezuelan sides.24 Despite the erratic administration and counter-market policies of the Venezuelan regimes of Hugo Chavez and Nicholas Maduro, the PRC over the years has instituted multiple vehicles for minimizing risk. These include structuring the heavy investment fund to be repaid within a three-year window. The use of a Venezuelan account in a Chinese bank to pay Chinese companies for work done also minimizes risk, with the money effectively never leaving China, as noted previously. Finally, linking the credit line to an oil extraction operation effectively dominated by a Chinese firm (although PDVSA is technically the majority partner in such joint ventures), the risk of Venezuelan default is lowered significantly. This is because the populist government cannot simply choose to delay payment, or not pay the loan, as it has done with other creditors in recent years. Rather, it would have to actively prevent its Chinese partner from pumping and shipping the oil, to stop the PRC from repaying itself. From 2008 through the death of Hugo Chavez in 2013, the PRC created multiple versions of the Heavy Investment Fund, each with slightly different details, while also renewing different tranches of the fund on multiple occasions. The Chinese also expanded the range of goods and services, including the construction of a car plant for the assembly of Chinese cars, administered by Chinese management and technical personnel in Venezuela, and four Chinese telephone manufacturing plants.25 In total, the Chinese provided at least $63 billion through such funds to the Chavez and Maduro regimes.26 The loans and the advance of the projects were overseen by the high-level China-Venezuela Mixed Commission, which theoretically met at the sub ministerial level on a regular basis to coordinate issues to keep them and met at the ministerial level at least once a year.27 As the Venezuelan government nationalized an increasingly broad range of industries, and changed the structure of the sector, including its January 2007 nationalization of the Orinoco tar fields, accounting for the majority of Venezuela’s petroleum reserves,28 PRC participation in the sector, and to a lesser degree in mining and other sectors such as manufacturing, became increasingly important for the generation of revenue, the

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functioning of the economy, and the regime. In addition, Chinese loans were important in helping the regime to deliver goods to its supporters, including the previously mentioned importation of Chinese appliances, subsequently sold at subsidized prices to the poor Venezuelans who were the regime’s key support base, through the program “My Well-Equipped Home” ultimately providing more than three million such appliances,29 with many being delivered just before the critical 2012 and 2013 presidential elections.30 Much of the work done by Chinese companies, the goods provided, and the other benefits to be conferred through the very real loans that Venezuela paid back through its oil, was ultimately squandered through a combination of corruption and mismanagement. A high-profile example was the $7.5 billion Tinaco to Anaco railway project, which in concept was to involve the construction of 13,665 kilometers of railroad connecting the Venezuelan coast to its interior. Despite the spending of $1.5 billion for the project by the Venezuelan government to the benefit of Chinese firms working on it, only 40 kilometers of the planned line was ever built (.29%), leaving ruins of partially built infrastructure.31,32 In a similar fashion, production infrastructure such as the Cherry auto factory and the Huawei and ZTE telephone facilities, paid for by the Venezuelan people with loans repaid by Venezuelan oil, ultimately produced few, if any Chinese products. Nor did they realize production operations to generate sustained employment for Venezuelans. More often than not the announcement of the project was followed by the poor execution of details, such as the inability to import inputs actually needed to produce goods due to problems such as currency controls. To cover up such poor administration or corruption, however, the Venezuelan government continued to use its credit lines from China to buy its finished cars, cellphones, and other items, squandering more money on top of that wasted on the unutilized or subtilized factories. Despite such problems, as suggested previously, the structure of Chinese deals in Venezuela meant that the PRC and its companies profited handsomely, even while generating very little of value for the Venezuelan people. Another good example of China profiting from Venezuela’s need and mismanagement was a billion-dollar loan provided by China Development Bank in 2009 to the Venezuelan state mining firm Corporacion Venezolana de Guayana (CVG). Through the loan, which was meant to fund CVG expansion of its mining capabilities, the Chinese company Wuhan Iron

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and Steel Corporation (WISCO) obtained a commitment for future deliveries of Venezuela’s iron ore for approximately one-fourth of the price that it would have had to pay for it on the market. On the other hand, the populist leftist Chavez government apparently never used the money to actually increase CVG production capabilities, possibly embezzling much of it, yet leaving CVG burdened with an enormous commitment to deliver the contracted for ore, without the resources to produce it. The Venezuelan government was then obliged to comply with the commitment by diverting iron from other orders for which CVG would have gotten cash.33 Chinese companies also had a series of security challenges in Venezuela, although most were kept out of the news by the Chavez later and Maduro governments, which substantially controlled both national media and local governments and security forces. As the Venezuelan police became increasingly corrupted and as criminal groups expanded both in the greater Caracas area and across the country in general, extortion and robbery of Chinese (and other) operations became an increasing problem. One high-­ level incident occurred in November 2012  in Chaguaramas, Venezuela, when armed gunmen entered a municipal government facility and stole 650,000 bolivars (then approximately $100,000) in cash, which China Railway Road was storing in the facility to use for its payroll.34 As early as 2009, the PRC, its policy banks, and companies began to worry about the difficulties with its projects and the squandering of the resources it was providing. China Development Bank sent technical teams to review and provide recommendations, and attempted to provide more oversight over its projects, but apparently was unsuccessful. When the illness of Hugo Chavez in 201235 and the subsequent election and succession crisis of 201336 created questions about the continuity of the regime, and whether the Chinese would get paid, they quietly stopped new lending, even while continuing to insist on the payment of old debts and the formalization of money owed for work previously done. Following the consolidation of power by Nicolas Maduro in 2013, and multiple trips by key senior Venezuelan officials to the PRC to reassure China of the new regime’s intent to repay its loans, the PRC turned the money back on again,37 ultimately supplying an additional $11.4 billion from 2014 through 2016 before finally stopping all new lending.38 Following assumption of power by Nicholas Maduro in 2014, Venezuela’s financial situation began to quickly deteriorate. The government began deferring payments to those who had performed work in the country and other creditors. It fought and delayed payment on legal

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judgments, coupon payments for international bondholders, and even began delaying payments to the Russian government and its oil company Rosneft.39 By contrast, Venezuela continued to repay the debts it owed to Chinese creditors at a relatively steady rate, with the result that, by 2020, the amount of money outstanding to the PRC was estimated to be less than $19 billion.40 Indeed, the PRC only reluctantly accepted a Venezuelan suspension of principal payment on the remainder of its debt in September 2020,41 when doing so was convenient, appearing to comply with US sanctions on the Maduro regime. Although China has not abandoned the Maduro regime as the regime’s behavior has become an increasing liability, China has behaved pragmatically, quietly reaching out to talk with various representatives of the Venezuelan opposition. When opposition congressman Juan Guaido made a credible claim in January 2019 to be the de jure President of Venezuela, and that claim was recognized by over 50 states, the PRC quietly engaged with Guaido’s representatives.42 Throughout the Guaido period, China pursued a cautious “two-track” posture with Venezuela. On the one hand, it gave the appearance of respecting US sanctions and coordinating with representatives of President Guaido and others challenging Maduro’s de facto government. At the same time, it effectively refused to work against the Maduro regime, to include Chinese ships accepting surreptitious ship-to-ship transfers of Venezuelan oil off the coast of Malaysia.43 In the second half of 2021, with signs that the regime had effectively eliminated the opposition, CNPC quietly began activities to ramp-up oil production in the country.44 Beyond economic engagement, the leftist populist governments of Chavez and Maduro also provided the PRC opportunities to engage on security and technical matters in ways not seen as extensively in non-­ populist regimes. In the military domain, leveraging Chinese loans, PRC-based military product companies such as NORINCO provided arms on credit to the Venezuelan government. Because of the political alignment by the Venezuelan regime with the PRC and its inability to obtain arms elsewhere except for Russia and Iran, Venezuela became one of the first purchasers in the region of Chinese sophisticated military hardware. These included K-8 fighter aircraft,45 Y-8 and Y-12 military transports,46 multiple deliveries of JYL-1 radars,47 and JYL-27A radars, with the Maduro regime taking deliveries on the latter as late as September 2019 when the Maduro regime was in full economic collapse.48 It also included selling Venezuela

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a range of armored vehicles including the VN-1 armored personnel carrier.49 Such vehicles were used repeatedly by the Maduro regime in 2014, 2017, 2019, and on other occasions to repress protesters. Indeed, they were even employed in January 2020 to shut de jure Venezuelan president Juan Guido and his legislative allies out of the parliament building. With respect to space architecture, as noted previously, the PRC built and launched three satellites for Venezuela, Venesat-1, VRSS-1, and VRSS-2, as well as building and wiring its ground control architecture at the Manuel Rios and Guarico military bases, and training Venezuelan space personnel. Consistent with Venezuela’s pioneering role in the development of relations between China and leftist populist states in the region, Venesat-1, which was launched from China’s Xichang Satellite Launch Center in October 2008, was the first PRC-built and PRC-launched satellite in the hemisphere, following China’s 2003 launch of Nigersat-1, for Nigeria in Africa. In other technical domains, Venezuela’s leftist populist regime has played a key role in the implementation and use of Chinese surveillance and control technologies based on those used in the PRC itself to control its own populations. The most notable of these, mentioned previously, has been the “Fatherland Identity Card” system, set up by the Chinese company ZTE. It has been used in Venezuela not only in voting, but in the distribution of food and other scarce aid to Venezuela’s poor (the famous “clap boxes”), in obtaining discount consumer appliances,50 and, most recently, in distributing and controlling access to scarce Covid-19 vaccines. As noted previously, the PRC has also helped the Maduro regime to use China-supplied telecommunication architectures to spy on de jure President Juan Guaido and his supporters, for which it was sanctioned by the US Treasury Department in November 2020.51 Over the years, the performance of the Chavez and Maduro regimes in Venezuela has tarnished the PRC’s reputation throughout the region and produced far less economic benefit for its companies and banks than its promoters in the PRC once hoped. Nonetheless, by carefully seeking to avoid association with the anti-US political activities of those regimes, or its corruption, authoritarianism, and violations of human rights, China has managed to reap the benefit from the survival of a regime which has drawn US attention and whose continued activities has distracted the United States in the region through the criminals and terrorists operating on its territory, pushed out seven million refugees,52 and has supported anti-US leftist populist movements throughout the region.

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China and Ecuador As with Venezuela, PRC economic and other engagement in Ecuador was relatively limited before the election of anti-US leftist populist President Rafael Correa in November 2006. China’s most significant advance there prior to the Correa presidency was the $1.45 billion purchase in 2005 of the Canadian oil firm EnCana by the CNPC-led led Andes consortium, transforming the PRC into one of the most important foreign oil entities in the country.53 As with Venezuela, the Ecuadorian government of Rafael Correa was relatively slow to take initiatives forward with the PRC after assuming power in December 2006, although precedent for doing so was already emerging in Venezuela. In Ecuador, like Venezuela, the incoming Correa administration reformulated the nation’s constitutional framework through a Constituent Assembly process, generating some hesitation by Chinese and other actors in committing to major investments at the beginning of his time in office. In addition, in October 2007, when the Correa administration sought to raise petroleum royalties on companies operating in the country,54 the PRC-based Andes consortium, like others, found itself threatened by the potential adverse impacts of the Correa government actions. The beginning of China’s most significant opportunities in Ecuador occurred in December 2008, when the Correa government defaulted on $3.2 billion in loans from the IMF, effectively shutting off the country’s access to international financial markets.55 The IMF default, in the context of the country’s new constitutional framework, simultaneously created an enormous need for Chinese capital and an opportunity for the Correa regime to pursue it. During the years that followed, Correa’s leftist populist government ultimately borrowed at least $17.4 billion from PRC policy banks, in support of both particular infrastructure projects, and the general needs of the government.56 As with Venezuela, the Correa regime committed to a series of linked agreements, in which the loans obtained from the Chinese policy banks were repaid by deliveries of Ecuadoran oil, much of which was in the hands of the Chinese through the Andes Petroleum consortium. Ecuador’s “loans-for-oil” contracts, however, went beyond the mere repayment of loans, however, functioning as a kind of advance delivery contract that committed some 90% of Ecuadoran oil exports to China, at prices that were often less than prevailing market prices.57

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As in Venezuela, the Chinese took advantage of their operation of key oil fields through the Andes consortium and others to bring in their subcontractors such as Kerui and Changqing Petroleum Exploration Bureau (CPEB), whose presence mushroomed in the country during the Correa administration, in support of the major Chinese national oil companies.58 Armed with oil-backed loans from the PRC, the Correa government pursued contracts with Chinese companies for the construction of a range of major infrastructure projects, including multiple hydroelectric facilities. Of these, the $2.25 billion, 1.5 GW Coca Codo Sinclair plant was the first and the largest. Other hydroelectric facilities included Toachi-Pilaton, a $240.4 million 1.12 GW facility, the $506 million Minas San Francisco project, the $100 million 96 MW Termo Esmereldas II, and the 115 MW $206 million Delsitanisagua project, among others.59 The direction in which Correa wished to channel the Chinese investment had a domestic political component. Specifically, his projects effectively sought to refocus economic activity away from Guayaquil, heart of Ecuador’s established commercial elite that was his principal opposition. As part of this effort, one of the Correa administration’s early key initiatives was the development of the port of Manta into a megaport. The project sought to position Ecuador as a new commercial gateway to China, based on a new hub port that would, if successful, circumvent the traditional role of Guayaquil in Ecuador’s maritime trade. Correa’s initial step in this direction, in 2007, was to expel the US military from its forward-­ operating location at the Manta airport, clearing the way for the more unrestricted development of the airport-port complex with Chinese partners.60 Indeed, the Hong Kong–based Chinese company Hutchison had been given the concession in November 2006 to develop the port.61 In 2008, the administration also sought to build a major new refinery complex in the area, El Aroma. Initially, the Administration focused on Venezuela’s PDVSA as a partner, but then in 2013 turned to China’s CNPC when PDVSA was not able to meet its commitment.62 Correa’s ambition for the project went far beyond development of the port, however. The broader project, the “Manta-Manaus corridor” contemplated a multi-modal transport infrastructure in which Manta, as noted previously, would be a hub port and gateway for trans-Pacific commerce, complemented by river, highway, and rail links to the Atlantic. In April 2016, the Correa government signed an agreement with China exploring development of the project.63

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Within the ratification of Ecuador’s new constitution in September 2008, and passage of a new mining law in 2009, President Correa further turned to the Chinese to develop the country’s new mining sector. In 2010, a consortium of China Railway Construction Corporation and Tongling Nonferrous Metals Group acquired the Canadian mining firm Corriente Resources, with a presence in Ecuador.64 In 2012, the government announced that it was giving Corriente a $1.4 billion concession for a massive open pit mine, Mirador, in the environmentally sensitive southern Province of Zamora-Chinchipe.65 The consortium later also acquired rights to develop the nearby San Carlos Panantza mine.66 While the Correa government in Ecuador made better use of oil-backed Chinese loans than did Venezuela, Chinese projects and contracts were involved in an array of problems. In the port sector, the operator Hutchison became embroiled in disputes with the Correa administration over control of the port and schedules of investment. In February 2009, the conflict drove Hutchison to withdraw from the Manta concession,67 leaving both the development of the port, and the associated projects, including the Manta-Manaus Corridor, in the lurch. In Ecuador, even more than in Venezuela, the activities of Chinese firms in the extractive sector became the subject of significant public unrest. In November 2006, protesters at the Andes Petroleum operation in Tarapoa took over the oil field and shut it down.68 In 2007, in Dayuma, local resistance to Chinese-operated oil operations forced the Ecuadorian government to declare a state of emergency and bring in the Army to back up the national police;69 37 people were killed in the conflict. In March 2012, the announcement of the concession for the open pit Mirador mine sparked major protests by environmental and indigenous groups. Protesters targeted the Chinese embassy in Quito and also led a march across the country, postponing, but ultimately not stopping, the project.70 In San Carlos Panantza, tensions with the local community, including resistance from the Shuar indigenous inhabitants of the region escalated into significant violence in December 2016 with deployment of the Ecuadoran Army to the zone, spawning clashes resulting in multiple deaths and injuries.71 As in Venezuela, the Ecuadorian government had tremendous difficulties with the Chinese projects that it contracted. Virtually all of the hydroelectric facilities developed by the Chinese ran into problems, including a public scandal when the flagship Coca Codo Sinclair project, nominally approaching completion, was identified as having over 400 defects.72 The

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China-built dam’s problems included poor hydrological analysis, with the consequence that the water pressures of the dam, once in use, caused a dramatic change in the direction of the Coca river, erosion, and sinkholes that ultimately forced the shutdown of the OCP petroleum pipeline, which traversed the area, carrying a significant portion of Ecuador’s revenue generating for-export oil.73 The problems did not end there, however. Two of the Chinese dam projects (Coca Codo Sinclair and Delsitanisagua) were associated with fatal accidents, and on two others, Mazar Dudas and Quijos, the Chinese builder was removed from the project by the Ecuadoran government for non-performance.74 In Ecuador, as in Venezuela, the Chinese projects were also subject to multiple allegations of corruption, with those close to President Correa often benefiting from lucrative support contracts, and other benefits,75 as outlined by Ecuadoran investigative journalist Fernando Villavicencio in his books El Feriado Petrolero (the “Petroleum Carnival”)76 and Ecuador Made in China.77 As with Venezuela, the populist Correa government in Ecuador also opened the door to the PRC for multiple activities in the military and surveillance sectors. Ecuador, along with Venezuela, was one of the first countries in the region to buy Chinese radars, YLC-2V long-range and YLC-18 mobile radars. Nonetheless, the Ecuadorian military subsequently canceled the contract with the Chinese firm CETC when the radars provided were not suitable for the purposes intended, only to be sued by the Chinese for the cancellation.78 Despite such difficulties, the Ecuadorean military also bought 709 military trucks of various types from the Chinese in support of a badly needed recapitalization of its materiel capabilities79 Ecuador also bought 10,000 Chinese AK-47 assault rifles.80 In surveillance, as noted previously, ECU-911 was the first major Chinese surveillance architecture built in the region, and has been expanded significantly since implementation of the initial pilot project in 2011, to include more than 4300 cameras across the nation, 16 different monitoring and control facilities, and security feeds not only to Ecuador’s police but also to its intelligence services.81 In the space sector, although not on the same order of magnitude as Venezuela, as noted in Chap. 4, Ecuador contracted the PRC to launch its Pegasus microsat, which was subsequently destroyed by space debris. In the end, by contrast to Venezuela, Ecuador’s government unexpectedly turned away from its China-oriented populist course. The shift was a unique event, however, owing to a miscalculation by Correa that his Vice

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President Lenin Moreno would remain loyal to and carry on his boss’ problematic legacy. Instead, after Correa’s departure, Moreno attempted to diversify away from dependence on Chinese loans, investments, and purchases of Ecuadoran commodities, but was only partially successful. In December 2018, Moreno traveled to the PRC, seeking to renegotiate some of the oil and loan deals of his predecessor, only to come back with a new $900 million loan from the PRC.82 The substantial presence of Chinese firms in Ecuador’s petroleum and mining sector, initiated under Correa, also continued under the Moreno government. The Chinese-­ owned open pit mine El Mirador, which generated significant protests from indigenous and environmental groups, began producing copper in 2019.83 In the logistics arena, although the port, refinery, and infrastructure projects centered on Manta failed to go forward, as noted in Chap. 4, the Moreno government initiative to develop the alternative Pacific coast port of Posorja, led the Dubai-based recipient of the concession, DP World, to contract China Harbour for the $1.2 billion of work required to expand the port.84 In the waning days of the Trump administration in the United States, and just before the Moreno administration left office in May 2021, replaced by the center-right Guillermo Lasso, Moreno appealed to the United States to help Ecuador liberate itself from its extensive debts to the PRC and the associated pressures to cooperate with China on issues like 5G. The United States did so, although the Ecuador-China relationship remains strong.85

China and Bolivia By contrast to Venezuela and Ecuador, the leftist populist government of Evo Morales in Bolivia moved relatively more slowly in establishing a strong relationship with the PRC and its companies. The Morales government also had a very mixed track record with those Chinese firms in terms of their performance and the protests that their management style generated among Bolivian workers and communities. From the beginning of his presidency in January 2006, Bolivia’s leftist populist president, and first indigenous executive, Evo Morales recognized the potential contributions of the PRC to his aims to transform the country. During his first visit to the PRC following his election, even before assuming the presidency, Morales telegraphed his pro-PRC orientation in Beijing while meeting with Chinese Politburo members by

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proclaiming himself a great admirer of PRC revolutionary leader Mao Zedong.86 During the early years of the Morales presidency, as with similar periods with populist governments in Venezuela and Ecuador, the uncertainty associated with the new government’s consolidation of power and resistance to it impeded the rapid advance of Chinese projects in the country, even though there was evidence of interest on both sides. The struggles contributing to that uncertainty included the 2006–2007 Constituent Assembly process and the associated struggle over its implementation, including fierce pushback from Morales opponents in the country’s relatively wealthier, lowland “medio luna” states of Tarija, Santa Cruz, Beni, and Pando.87 During those early years, Chinese petroleum companies Hunanji and Shengli oil held talks with the Bolivian government. Similarly, in 2012, representatives from China Eastern Petroleum and Gas met with Bolivian national petroleum company YPFB to discuss exploring for petroleum in Tarija.88 Sinomach expressed interest during this period in building a fertilizer plant near Cochabamba to produce ammonia and urea.89 Still, no major projects came to fruition from those initiatives. In a similar manner, in 2006, the Chinese company Shandong Luneng explored an agreement to develop the substantial iron deposits in the El Mutún mineral field in the lowland Department of Santa Cruz. In its bid for the project, the firm even discussed construction of a $10 billion railroad link from El Mutún to the Pacific coast to a $2 billion facility that it proposed to build at the Peruvian port of Ilo.90 The concession for El Mutún was ultimately awarded to the Indian firm Jindal, and Shandong Luneng’s associated infrastructure proposal disappeared. It took several years after the Morales government implemented the 2009 constitution and subjugated the resistance from the Media Luna states, to move forward with Chinese companies to put into motion work projects across a range of areas. Even more than the leftist populist regime in nearby Ecuador, the Bolivian government was oriented toward contracting the Chinese to build facilities and infrastructure that would presumably generate value for the country, rather than grating Chinese companies concessions, or soliciting them to invest their own money, thus giving them a subsequent claim to the property and the value added it generated. The net result of this approach by the Morales government, however, was that Chinese work in Bolivia was highly transactional, charging for the effort expanded, even if the project was not completed as

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planned, or if later, the way that the project was structured and coordinated with supporting activities prevented the Bolivian state from realizing benefit from it. In the construction sector, multiple Chinese companies secured contracts in Bolivia across a range of projects. These included CAMC Engineering, China Railway Road, Sinohydro, and the Shenzhen-based company Vicstar, among others. Indeed, in 2015 alone, Chinese companies won 11 of 49 public works projects in Bolivia.91 They included not only construction of roads and bridges, but also railroads, such as a $250 million contract for a 148-kilometer highway and train line from Montero to Bulo Bulo.92 In the hydroelectric sector, the Bolivian government contracted Chinese companies to work on three major projects. The biggest was the $1.3 billion, 600 megawatt Rositas complex on the Grande River in the Department of Santa Cruz. Other projects included Misicuni, as well as the 124 MW San Jose hydroelectric facility, both in the Department of Cochabamba.93 The Morales government further contracted Chinese firms to build a number of manufacturing facilities, including a $174-­million sugar factory in the Department of La Paz, a paper mill in Chapare, and an asphalt production facility in La Paz.94 In October 2015, China granted the Morales government in Bolivia a $7.5 billion line of credit, associated with 11 strategic projects of interest to the Morales government,95 although in the end, only a portion were realized. In the mining sector, China’s most significant projects in Bolivia included the 2016 award to Sinosteel of a contract to build and administer a mining and metal processing facility in El Mutún,96 following the Bolivian government’s expulsion of the Indian company Jindal from a concession to develop the iron field there. Separately, in the Uyuni salt flats in the south of Bolivia, Chinese companies CITIC, Linyi Gelon New Battery Materials, CAMC,97 and Xinjian TBEA98 were each given small contracts to develop lithium mining and processing capabilities, although the Bolivian government never succeeded in developing lithium operations on the scale of those in Chile and Argentina to the south. At the end of 2021, when this book went to press, the leftist populist government of Luis Arce was soliciting bids from Chinese and other companies for a renewed effort to develop the lithium at Uyuni.99 As in Venezuela and Ecuador, Chinese economic engagement with the Morales regime in Bolivia was associated with an enormous amount of social protest, as well as corruption, and poor project performance.

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Chinese firms working on the Rositas hydroelectric facility and other projects were subject to frequent strikes. In the mining sector, the Bolivian government revoked the concession of the Chinese firm Jungie in 2015 when a poorly constructed containment pond for metal tailings that it had built broke, flooding the area with water laden with toxic residues, injuring 18, and contaminating the groundwater on which the local community depended.100 Even the work of Sinosteel in the signature Chinese mining project El Mutún was significantly behind schedule as this book went to press in early 2022, with the company having been suspended from the project for non-performance and then brought back on again.101 The San Jose hydroelectric project was paralyzed by strikes,102 while the Misicuni hydroelectric project experienced cash flow problems and was beset by protests for not paying its heavy equipment operators,103 but was eventually completed in 2017.104 With respect to bridges and highways, Sinohydro suffered five work stoppages in 14 months during its work on the Ivirgarzama to Ichilo highway.105 In railroad construction, the Bolivian government was forced to cancel the contracts for both China Railway Road and CAMC engineering for nonperformance.106 Corruption involving Chinese companies and projects was another major feature of Chinese engagement with the Morales administration. The most notable example was the case of Gabriela Zapata, a woman without a college education, hired by the Chinese company CAMC engineering to be its senior country representative. During her tenure, CAMC Engineering became the largest Chinese construction firm in Bolivia, winning $580 million in work.107 In 2016, it emerged that Zapata had previously had an affair with Morales, possibly when a minor, and perhaps bearing him an illegitimate child.108 In Bolivia, like in Venezuela and Ecuador, the government showed itself willing to go beyond initiatives of non-leftist populist governments, in opening doors to the PRC with respect to military engagement, surveillance and control, and space architectures. In military affairs, following in the footsteps of Venezuela and Ecuador, the Morales government, after receiving gifts of PRC-built military buses and trucks for years,109 contracted to Chinese companies for six K-8 fighter aircraft, to be used by the Bolivian Air Force as interceptors.110 It also purchased six Harbin H-425/Z-9 helicopters from the PRC, which were delivered in 2014.111 In 2016, the Chinese government donated 31 armored vehicles to China, including four riot control vehicles, similar to those provided by China to the Bolivarian National Guard in Venezuela.112

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With respect to surveillance systems, as noted previously, Bolivia, like Ecuador, contracted with Chinese companies for a national emergency response and surveillance architecture, BOL-110.113 It never attained the heights of sophistication or in nationwide reach that the previously mentioned ECU-911 system in Ecuador did. In space, as with Venezuela, the PRC helped Bolivia to establish a new space agency, ABE, and train its personnel. As with Venezuela, the PRC not only built and launched Bolivia’s very first satellite, the Tupac Katari, but also built and connected and outfitted its two ground control stations at Amachuma in La Paz, and at La Guardia in Santa Cruz. A second satellite, the Bartolina Sisa, was supposed to be launched in early 2022,114 but the launch had not occurred as of the time this book went to press. The ouster of President Evo Morales in 2019, after he and his MAS party were credibly accused by electoral observers from the Organization of American States of trying to falsify results from his attempted re-­ election, temporarily ended Bolivia’s period of leftist populist government, bringing in transitional President Jeanine Añez. Añez government suspended many of the Chinese projects and other projects pending for a review. In October 2020, the MAS returned to power in Bolivia by winning the rescheduled elections, with economist Luis Arce as its standard bearer as Presidential candidate, but with Evo Morales still exerting significant influence behind the scenes. As noted previously, the new MAS government has indicated its interest in possibly working with Chinese firms in developing Bolivia’s lithium,115 among other projects. At the time this book went to press, the MAS government was organizing a public auction for developing Bolivia’s lithium, in which both Xinjian TBEA and the larger Chinese company Ganfeng were interested participants.116

China and Argentina The trajectory of China’s deepening relationship with leftist populist Argentina is shaped by several important factors, which differ from the paths taken with China by other leftist populist regimes examined in this chapter. First, Argentina’s size, economic diversity, relative industrial development, and importance to the PRC as an agricultural producer, among other resources, have led PRC-based companies to have a significant interest in and economic engagement with Argentina long preceded the current leftist populist era of Peronist governance. Indeed, Argentina

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was one of the first states in Latin America that the PRC government recognized as a strategic partner, establishing the relationship in November 2014. The diversity of Argentina’s economy and associated political bases has made China’s engagement with Argentina and its range of economic, social, and political actors complex from the beginning. China’s deepening engagement with Argentina coincided with the gradual turn to the left that began under the government of Nestor Kirchner (2003–2007). That relationship, however, expanded significantly under the government of his wife Cristina Fernandez (2007–2015). The deepening also differed from other cases in that China expanded its presence in the country through investment via acquisitions of Western holdings in the country following the 2007–2008 global financial crisis, rather than principally through loan-based work projects as occurred in the other cases. China’s early interest in Argentina was highlighted during the trip by then Chinese President Hu Jintao to the region in November 2004, in which he made Argentina one of his key stops, discussing $20 billion in investment proposals in the country,117 although almost none of the projects discussed at the time came to fruition. Early attempts by PRC-based companies to acquire the petroleum company Bridas fell through. The turn to the left during the presidency of Christina Fernandez de Kirchner, inaugurated in December 2007, eventually opened the door to the PRC for a country which already badly needed investment and financing due to the 2008 global financial crisis and the country’s previous debt default and relatively anti-market policies. As in the other populist regimes, however, it took several years before Chinese initiatives in Argentina began to find fertile soil, although the reasons in Argentina were less tied any resistance by President Fernandez, but rather, the complexity of Argentina as a politically plural and complex society. Investment in the mining sector by Metallurgical Corporation of China (MCC) generated significant conflict with both the local community, and government regulators, obligating it to close down its Campana Mahuida mine in 2009.118 In 2010, the Chinese agriculture company Beidahuang Nongken signed an ambitious agreement with the Argentine provincial government of Rio Negro for the lease of 320,000 hectares of land and a concession for the nearby agricultural port of San Antonio, generating significant controversy from both environmentalists, and others concerned about the enormous Chinese “land grab” Argentina.119 The project stalled

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when the political leadership in the province changed, and ultimately disappeared. China’s fortunes in Argentina began to improve after roughly 2010. In the petroleum sector, in that year, Chinese national oil companies made two of their biggest post-financial crisis advances in the region in the sector. As noted in Chap. 4, in March 2010, China National Offshore Oil Corporation acquired Bridas for $3.1 billion, giving it a substantial presence in Argentina, including the massive Vaca Muerta oil and shale fields. In December of the same year, Sinopec acquired Occidental Petroleum for $2.45 billion, giving the company operations in Santa Cruz, Chubut, and Mendoza provinces.120 Through its ownership of Bridas and a stake in Pan American Energy, CNOOC became a key actor in fracking in Argentina, as the new petroleum technology came online. When the Fernandez government moved to confiscate the petroleum assets of the Spanish firm Repsol, it reportedly turned to the Chinese in 2009 to discuss a $17 billion takeover of the firm’s Argentine assets.121 In the mining sector, in 2017, the Chinese company Shandong Gold acquired a 50% interest in Veladero for $960 million, giving it access to Argentina’s largest gold mine. It subsequently committed $145 million to extend the mine’s life through 2030.122 In agriculture, learning from failed attempts to enter agrologistics directly such as the Beidahuang Nongken project in Rio Negro, and a failed initiative by Chongqing Grain in Cordoba, the Chinese agricultural conglomerate COFCO turned to acquisition to obtain desired capabilities and technologies. In 2014, COFCO purchased an interest in the agrologistics firms H.K. Noble and Nidera. COFCO went on to expand its positions in both, acquiring full ownership of Noble in 2015 and that of Nidera in 2017. China also expanded its agricultural holdings in Argentina through ChemChina’s $43 billion 2017 takeover of the global agricultural chemicals firm Syngenta.123 Perhaps China’s most significant advances in Argentina during the leftist populist Fernandez regime occurred in the construction and logistics sector. These ultimately included 11 projects funded by loans from PRC-­ based policy banks and worked by Chinese firms, incorporating Chinese products such as railroad engines and rail cars. These included a series of contracts to upgrade the Belgrano Cargas rail system, connecting Argentina internally, and to its neighbors. As noted previously, the first major Belgrano Cargas contracts were announced during the hastily rescheduled visit of Christina Fernandez to the PRC in 2010, after the PRC had cut $2

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billion per year in purchases of Argentine soy products. Infrastructure project awards for Chinese companies announced during that trip also included work for Chinese companies on upgrading the Buenos Aires and Cordoba subway systems, and a rail connection from Buenos Aires to the Ezeiza international airport. While work on Belgrano Cargas was beset by delays in the years that followed, much of it was eventually done. In 2021, following Christina’s return to power as vice-president alongside President Alberto Fernandez, the government signed a commitment for an additional $4.7 billion to Chinese firms for improvements to the San Martin and Belgrano Norte lines of the Belgrano Cargas system.124 In the electric sector, as a complement to the billions of dollars in railway infrastructure projects going to China, the Fernandez government contracted the PRC-based Gezhouba group to build two hydroelectric facilities along the Santa Cruz River, a $4.73 billion project in the heart of the territory that was her movement’s political base. Under Christina’s government, the Chinese were also contracted to build multiple wind energy projects, including Loma Blanca in Chubut, contracted to Power China and Goldwind, as well as Cerro Arauco in La Rioja.125 In the solar energy sector, Power China was contracted to build the 300-megawatt Cauchari facility in the north of the country, the biggest photovoltaic generating facility in the region. PRC-based companies were also contracted to build other solar parks in Salta and Cordoba.126 In nuclear energy, the Argentine government signed an agreement with China National Nuclear Corporation to build two new reactors in the country’s Atucha complex, funded by loans from Chinese policy banks. The first would have been a CANDU-pressurized water reactor (a proven Canadian design), while the second was to be a 1-GW Hualong-1 reactor, a newly certified design never before built outside the PRC.127 In the telecommunications sector, Huawei, which entered Argentina in 2001, made major advances in the country during the Fernandez administration, becoming a major supplier to Claro, Personal, and Movistar. Chinese companies also set up operations assembling televisions and other electronics in the Tierra del Fuego Free Trade Zone.128 In the space sector, as noted previously, Argentina’s Peronist government agreed to allow the PRC to build and operate a Chinese deep-space radar facility in Bajada de Agrio, in the Argentine province of Neuquén. The facility was controversial from the beginning, insofar as the agreements between the Christina Fernandez government and the PRC were

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not publicized, the facility was operated primarily by PRC military personnel, and the Argentine government had only limited access to it.129 In May 2021, as noted previously, the provincial government of Santa Cruz made public discussions for an additional space radar facility to support communications with satellites in polar orbits, in the Rio Gallegos industrial park, involving the Chinese company Beijing Aerospace Satelliteherd.130 In the banking sector, Argentina was the site of China’s first foray into branch banking into the region, with the 2015, $690 million acquisition of Standard Bank by the Chinese firm ICBC.131 The Fernandez government also signed $18.7 billion in currency swap agreements with China, renewed in 2020, although the vehicles were never actually used.132 Beyond economic cooperation, as with other leftist populist states, some of China’s most significant military sales and other interactions occurred with the Peronist regime in Argentina. In 2008, the then new Fernandez government acquired four Chinese WMZ-551 armored personnel carriers to equip that nation’s battalion of the Cruz del Sur peacekeeping brigade.133 In 2015, the Fernandez government took engagement on military sales to a new level, pursuing an agreement with the PRC to buy Chinese five P-18 offshore patrol boats,134 107 armored vehicles,135 and as many as 20 JF-17 block 3 fighters.136 The agreement would have involved some coproduction on the Argentine side and would have been the most advanced Chinese combat aircraft sold to the region. Although the fighter acquisition was suspended when the Fernandez government was voted out of office in 2015, it was resurrected with the return of the Peronists to office in 2019.137 Beyond arms sales, the PRC regularly hosted Argentine officers in courses in China and made institutional visits to Argentina. In October 2013, the PLA Navy missile frigates Lanzhou and Liuzhou and their supply ship Boyanghu made a port call in Buenos Aires.138 In law enforcement matters, in 2015, the Chinese Federal Police sent an official to Argentina to help its federal police in actions against the locally operating Chinese triad organization Pixue. The collaboration was the first major joint operation against a Chinese criminal organization in the region.139 Separately, the PRC donated $17.5 million in goods to the Argentine Federal Police under the new administration, including 4 armored personnel carriers, 30 motorcycles, bomb-detection equipment, and a range of other goods.140 In Argentina, as in Ecuador, the country’s leftist populist government was replaced by one led by center-right businessman Mauricio Macri,

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interested in diversifying the country away from dependence on China. The new political leadership in Argentina led to a temporary pause and reorientation of many of China’s projects in the country. The capsizing and sinking of a Chinese fishing boat in March 2016 as it tried to escape from Argentina’s Coast Guard after violating the country’s Exclusive Economic Zone (EEZ),141 although an accident and not a result of fire by the Argentine vessel,142 symbolically set the tone for the new relationship. Despite the change in orientation with the arrival of the Macri administration, in Argentina, as in Ecuador, the new government was only partly able to move away from that China dependence. The Macri administration downsized the previously mentioned nuclear deal from construction of two reactors to one, although that one was the Chinese Hualong-1 model, not the proven Canadian CANDU design. Similarly, the project for two hydroelectric facilities on the Santa Cruz River was suspended, although their linkage to the strategically important Belgrano Cargas rail system modernization through a cross-default clause in the loan prevented the hydroelectric projects from being eliminated entirely.143 The acquisition of military equipment from the PRC was also suspended. By contrast to the Ecuador case, in Argentina, the leftist populist Peronists returned to power, moving forward again with many of the projects initiated under the Fernandez administration, and leveraging the economic relations established during the prior Peronist government. In 2019, following the inability of the center-right Macri government to extract the country from its economic and financial difficulties, a new Peronist government led by moderate Alberto Fernandez was elected, including the return of former President Christina Fernandez to office on the ticket, this time as vice president. As noted before, work with China resurrected with the return of the Peronists included $4.7 billion of new work on the Belgrano Cargas rail system, resurrection of the Santa Cruz River hydroelectric facilities, and renewed exploration of the purchase of Chinese JF-17 fighters, with the government including them in the 2022 Argentine defense budget.144 By 2021, the Peronist government was talking about $30 billion in infrastructure projects with PRC, including not only the previously mentioned projects but also others such as proposed work on the San Martin and Roca light rail lines in greater Buenos Aires,145 and interest in contracting the Chinese to build an $800 million rail link from Vaca Muerta (Neuquen) to the port of Bahia Blanca in the north,146 as well as the

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previously mentioned $1.5 billion highway tunnel along the route connecting Argentina to Chile over the Andes.147 In the province of Entre Rios, the Peronist government contracted the company CNTIC to build a $200 million, 50-kilometer-long gas pipeline, as well as 132 kilometers of high-tension electric lines and fiber optic cable using the same right-of-way.148 In petroleum, the government began exploring the construction of the Zarate energy complex. In mining, the Chinese company Hanaq acquired Ochre mining in February 2020, including a gold mine in La Rioja.149 In mining, as noted previously, the Chinese firm Ganfeng acquired an important stake in the Cauchari Olaroz lithium field in the north of the country.150 In agriculture, the Fernandez government benefited from the Swine Flu outbreak in the PRC, obliging it to cull a significant portion of its pig herds, dramatically increasing demand for Argentine pork. The PRC proposed investing $3.5 billion in Argentina to build 25 industrial pig farms in the north of the country, effectively doubling the nation’s pork production.151 Unfortunately for the sector, local protest, including from leftist actors important in the Peronist coalition, helped to derail the deal.152 Nonetheless, working at the state level, the Chinese significantly expanded purchases of Argentine pork, as well as beef. Important Chinese surveillance architecture projects also went forward during this period, including a smart cities project in Jujuy, in the north of the country,153 and the installation of Chinese cameras in the city of Vicente Lopez, in Buenos Aires province.154

China and Cuba: A Special Case China’s relationship with Cuba resembles the trajectory of the PRC relationship with other leftist populist states examined in the preceding sections. Nonetheless, it also differs in important ways: First the consolidation of Cuba’s communist regime occurred long before support from the PRC was a factor in sustaining leftist governments in the region. When the Communist revolutionaries took over in Cuba in January 1959, in the context of the Cold War, the new regime was principally nurtured by the Soviet Union. In addition, the Sino-Soviet ideological split that occurred shortly thereafter impeded cooperation between Cuba and the communist PRC. During the 1970s and 1980s, China and Cuba found themselves on opposite sides of several wars for National Liberation in Africa and

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elsewhere. Only with the collapse of the Soviet Union and the abrupt withdrawal of economic support to Cuba in 1993 did the PRC receive an opening. Nonetheless, during this time, the PRC was not in an adequate financial, economic, or military position to provide meaningful support to island government. Second, for China, the Cuban missile crisis highlighted the special concern within the internal politics of its geopolitical rival the United States, regarding support to Cuba by a Communist extra-hemispheric rival. Particularly during the pre–Xi Jinping era, when the PRC was seeking to avoid portraying its activities as threatening, Chinese perception of US sensitivity regarding Cuba led it to proceed cautiously in its relationship with the island. In the economic sphere, US sanctions against the Castro regime meant that the island was relatively cut-off from access to the US market, limiting its commercial value to Chinese businesses. Thus, during a period in which the PRC recognized 10 other nations in the region as strategic partners, it continued to relegate Cuba to the role of all “good brother, good comrade, good friend.”155 During the early 2000s, China and Cuba did hold party-to-party talks and military consultations, and the PRC may have considered sending persons to the Soviet era listening facilities in Lourdes, Bejucal, and Santiago.156 Nonetheless, on the commercial side, interest by Chinese companies in Cuban sugar and nickel, as well as in doing work, and in support of Cuba’s fledgling oil industry did not significantly bear fruit.157 Indeed, a Chinese bid to acquire a stake in Cuba’s nickel industry was beaten out by Russian investors, while a $6 billion Chinese proposal to modernize Cuba’s Cienfuegos refinery158 also rejected.159 Despite such limitations in the Cuba-China relationship, during the early 2000s when the PRC was more limited in its options for sending its government functionaries and other citizens for language and other training in Latin America, it notably channeled a large number of its people through Cuban facilities, taking advantage of the relatively controlled environment in the country. An important focus of China-Cuba party-to-­ party consultations during this time was Cuba’s interest in learning from PRC success in opening up its economy while maintaining party control.160 During this period, the PRC also supplied a limited amount of goods to Cuba on credit, including cars and buses and trains,161 although the Cuban government’s lack of resources limited the options of this market for Chinese businesses. The PRC-based company ZTE was chosen in

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2011 to build the fiber optic cable connecting Cuba’s telephone and data architecture to the world through Venezuela.162 In 2014, the Barack Obama administration in the United States reestablished diplomatic relations with Cuba. The US reengagement with Cuba that the move signaled, and the renewed possibility of access to the US market through Cuba that it implied, led the PRC and its companies to redouble efforts to position itself with respect to business on the island.163 Chinese projects in Cuba that took off in that timeframe included expansion of the port of Santiago,164 establishing Chinese pharmaceutical firms in the Mariel Free Trade Zone, and construction of a $460 million golf resort.165 China also increased the products it provided to Cuba. This included supplying YTO tractors for Cuban agriculture,166 Chinese Yutong buses,167 and Cherry cars.168 The Chinese telephone company Huawei played a key role during this period helping Cuba’s national telecommunication authority ETECSA build its new intranet and associated equipment.169 Indeed, the PRC contribution to Cuba’s information architectures became critical during nationwide massive demonstrations in Cuba in July 2021, when ETECSA was able to leverage internet management capabilities provided by Huawei and other Chinese companies to censor and shut down communications, isolating protests on the island from the outside world and helping the government to restore control.170

Prospects for PRC Advance in Latin America Through Leftist Populist Governments China’s special relationship with populist governments, and the reinforcing cycle of providing resources to those governments while they consolidate power, later getting expanded access to their markets and resources, is one of the most significant dynamics transforming the strategic landscape of the region. It has significant implications for the United States,and the future of democracy and good governance there. Fueled in part by the political and social stresses of the Covid-19 pandemic, the region is undergoing the most significant turn to leftist populist governments in modern times.171 Columnist Andres Oppenheimer called the phenomenon the region’s “democratic depression.”172 It includes the consolidation of power by the Maduro regime in Venezuela, by the Ortega regime in Nicaragua, and the transition of Cuba

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to a new generation of Communist Party leadership under Miguel Diaz-­ Canel, who in April 2021 successfully assumed leadership of the Communist Party from Raul Castro, complementing his position as Cuba’s President. Beyond Venezuela, Cuba, and Nicaragua, the consolidation and spread of leftist populism includes the return of Evo Morales’ MAS party to government in Bolivia, with the election of Luis Arce in that country’s October 2020 elections. The advance of the populist left further includes the return of the Peronists in Argentina’s October 2019 elections, the growing power of radical left-oriented actors aligned with Vice President Christina Fernandez there,173 and efforts by that populist left to consolidate their control over Argentina’s judicial and other institutions.174 In Peru, one of the most significant advances of the populist left in the region has been the June 2021 election of Pedro Castillo in June 2021. A key influence behind Castillo is believed to be the head of his “Free Peru” party, Vladimir Cerron, a medical doctor who spent an extensive part of his career in Cuba. Castillo’s initial cabinet included a number of figures strongly affiliated with the left, and movements tied to Peru’s former Maoist guerilla movement Sendero Luminoso.175 The new Peruvian president met with the Chinese ambassador in Lima even before taking office to discuss ways to strengthen China’s already formidable economic position in, and relationship with, the country.176 Beyond those left-leaning leaders already in power, and likely both receptive to and in increasing need of money from the PRC, as this book went to press, the populist left had just been elected to power in Honduras and Chile, and was positioned to advance in multiple other countries of the region, including Costa Rica, Colombia, and Brazil. In Chile, the incoming government of Gabriel Boric, elected in December 2021, will preside over the implementation of a new Chilean constitution, being drafted by a leftist-dominated constituent assembly, increasing uncertainty for Western investors and thus expanding the importance of Chinese investment.177 In Honduras, in October 2021, the country’s principal two radical left-­ oriented parties, Libre and UNOH, combined forces to form “United for the people,”178 catapulting its populist leftist candidate, Xiomara Castro, to win Honduras’ November 28, 2021, presidential election. In Colombia, paralyzed for months by protest violence, on top of the strains of violence by armed groups, and over two million Venezuelan refugees in the country, at the end of 2021, the leftist former Marxist

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guerilla Gustavo Petro was the frontrunner in that nation’s May 2022 presidential elections.179 Finally, in Brazil, the country’s charismatic leftist former President Ignacio Luis Lula da Silva and his Workers Party led the polls to defeat incumbent President Jair Bolsonaro in that country’s October 2022 elections,180 although a number of centrist options such as Ciro Gomes and Joao Doria appealed to Brazilian voter’s rejection of left and right extremes, held open the possibility that Brazil’s politics could follow a “third way.”181 Absent such a “third way,” however, the return of power of Lula and the PT in Brazil would be transformative for China’s commercial options, as well as for Latin American politics and institutions. Given the already substantial PRC commercial presence in Brazil and the country’s economic need in the post-Covid-19 environment, China’s companies would be well positioned to accelerate their advance in sectors such as petroleum, mining, agriculture, electricity, logistics, manufacturing, and e-commerce, among others. As the PRC seeks the right balance between risk and benefit with the expanding array of populist regimes in the hemisphere, its posture will also be impacted by the activities of other extra-hemispheric actors in the region, including Russia and Iran, and other actors there. Such actions are often complementary to those of China, although not necessarily coordinated with it, and sometimes in conflict. Because Russia and Iran are not as constrained by their financial and economic interdependence with the United States, they have greater freedom, and motives, to engage with leftist populist states in the region in ways provocative to the United States, including military deployments and actions by their companies that directly violate US sanctions. Iranian Arms sales to Venezuela in the fall of 2021 are a case in point.182 The PRC may indirectly benefit from such actions, insofar as they challenge and distract its rival the United States in its own region. Nonetheless, China also has incentives to avoid association with such provocative actions. While this chapter argues that China benefits from and on balance embraces and inadvertently propagates leftist populist regimes in the Americas, those who would paint China’s actions in a less-damaging light would argue that the PRC and its companies actually have had very negative experiences with such regimes.183 Such logic would suggest that China has learned hard lessons from its embrace of countries such as Venezuela, and would proceed more cautiously with new leftist regimes in the future.184 While it is doubtlessly true that China’s engagement with leftist

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populist regimes has caused countless headaches for Beijing, its refusal to turn away from them and cooperate with the United States to restore democracy and bring populist leaders credibly accused of corruption and other crimes to justice refutes the argument that China’s negative experiences are sufficient to change its behavior. In addition, as shown in this chapter, the actual level of risk to China’s revenues from the bad behaviors of populist regimes is often overstated. In Venezuela, as noted previously, the combination of relatively short loan terms and the oil for loans deals, which allowed the PRC to be in control of the extraction of the oil that it used to repay itself, has meant that China largely continued to be repaid, with the exception of a brief period in 2020, even while the Maduro regime defaulted on virtually all other creditors, including Russian companies such as Rosneft. Indeed, although China loaned more than $62.2 billion to the populist regime since 2007,185 the actual amount still outstanding is believed to be less than $19 billion.186 Similarly, the PRC use of sophisticated and intrusive cross-default clauses and other sources of leverage in cases such as Ecuador and Argentina limit PRC risk in those cases. An additional argument by those who downplay the dangers of the relationship between China and leftist populism is that PRC investment and influence in the region is relatively modest, and benign in terms of its military activities and restraint from involvement in explicitly anti-US alliances. Such positions, however, merely set up and defeat a straw man argument; measuring the risk posed by the PRC to the United States or the region solely in military terms, however, misleadingly applies a cold war analytic framework no longer appropriate for the current era. It overlooks the very real PRC negative impact on democracy, corruption, human rights, and US influence in the region, as illustrated in detail in the present chapter.

Notes 1. These four cases of leftist populism are distinguished from more “moderate, reasonable” leftist regimes by Chinese scholar Xu Shicheng. “Analysis of Chinese Scholars on Latin American Left-Wing Government’s Policies,” in China-Latin America Relations: Review and Analysis (Volume 1), He Shuangrong, Ed. (Beijing: Paths International, Ltd., 2011), pp. 35–45.

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2. R.  Evan Ellis, “Bolivia—A Pivotal Moment for Populism and the Pandemic Response,” Global Americans, July 29, 2020, https://theglobalamericans.org/2020/07/bolivia-­a-­pivotal-­moment-­for-­populism-­ and-­the-­pandemic-­response/. 3. See “2020 Report to Congress of the U.S.-China Economic and Security Review Commission, One Hundred Sixteenth Congress, Second Session,” December 2020, https://www.uscc.gov/sites/default/ files/2020-­12/2020_Annual_Report_to_Congress.pdf. 4. “China rebuffs U.S. concerns about ties with Venezuela,” Reuters, May 22, 2018, https://www.reuters.com/article/us-­venezuela-­election­china-­idUSKCN1IN0S5. 5. See, for example, Elizabeth J.  Zechmeister, Noam Lupu, and Mollie J.  Cohen, “Democracy and Governance in the Americas: Key Findings from LAPOP’s AmericasBarometer,” LAPOP official website, Vanderbilt University, September 28, 2017, https://www.vanderbilt.edu/lapop/ insights/ITB030en.pdf. 6. See, for example, Brian Fonseca, John Polga-Hecimovich and Dr. Richard E.  Feinberg, “Venezuela and Cuba: The Ties that Bind,” The Wilson Center, January 2020, https://www.wilsoncenter.org/publication/ venezuela-­and-­cuba-­ties-­bind. 7. See R. Evan Ellis, “Populism, China and Covid-19: Latin America’s New Perfect Storm,” Center for Strategic and International Studies, April 20, 2021, https://csis-­website-­prod.s3.amazonaws.com/s3fs-­public/public a t i o n / 2 1 0 4 2 0 _ E l l i s _ P o p u l i s m _ C h i n a _ C o v i d -­1 9 . pdf?hEHS3muh1XMpnuFgYD_Xvmc0dVQGJTGM. 8. Briceño and Molina, 2020, p. 201. 9. “It doesn’t matter if Ecuador can afford this dam, China still gets paid,” The New  York Times, December 24, 2018, https://www.nytimes. com/2018/12/24/world/americas/ecuador-­china-­dam.html. 10. See, for example, “Lithuania says throw away Chinese phones due to censorship concerns,” South China Morning Post, September 22, 2021, https://www.scmp.com/news/world/europe/article/3149626/ lithuania-­says-­throw-­away-­chinese-­phones-­due-­censorship-­concerns. 11. Hillman and McCalpin, 2019. 12. See, for example, Xu, 2011, p. 44. 13. He Huifeng, “As Venezuela implodes, so do the dreams of thousands of fleeing Chinese,” South China Morning Post, August 14, 2017, https:// w w w. s c m p . c o m / n e w s / c h i n a / e c o n o m y / a r t i c l e / 2 1 0 2 9 2 2 / venezuela-­implodes-­so-­do-­dreams-­thousands-­fleeing-­chinese. 14. Sun Hongbo, “China’s Benefits in Latin America: American scholars’ judgement and anxiety,” in China-Latin America Relations: Review and

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Analysis (Volume 1), He Shuangrong, Ed. (Beijing: Paths International, Ltd., 2011), pp. 46–56. 15. Eva Vergara, “Pompeo: China financing of Maduro prolongs Venezuela crisis,” AP News, April 12, 2019, https://apnews.com/article/ caribbean-­chile-­venezuela-­santiago-­china-­6cc063f981984e7ebc965509a 45cafe9. 16. “Sincor heavy oil project on stream in Venezuela,” 2000. 17. Jesús Hermoso and María Victoria Fermín, “Venezuela-China, explained: How will Venezuela’s political crisis affect China?” SupChina, January 28, 2019, https://supchina.com/2019/01/28/venezuela-­ china-­explained-­4/. 18. See Jose Briceño Ruiz and Norbert Molina Medina, “China-Venezuela Relations in a Context of Change,” in China–Latin America Relations in the 21st Century: The Dual Complexities of Opportunities and Challenges, Raúl Bernal-Meza and Li Xing, eds. (London: Palgrave Macmillan, 2020), p. 185. 19. “CDB funds $4 billion PDVSA and CNPC joint venture Sinovensa in Orinoco belt [Linked to Project ID #38319, #38056 and #38055],” AIDDATA, Accessed September 9, 2021, https://china.aiddata.org/ projects/38053?iframe=y. 20. See Briceño and Molina, 2020, p. 194. 21. Zhang Yong, “Analysis of the Cooperation Patterns of China and Latin America in the Response to the International Financial Crisis,” Xu Shicheng. “Analysis of Chinese Scholars on Latin American Left-Wing Government’s Policies,” in China-Latin America Relations: Review and Analysis (Volume 1), He Shuangrong, Ed. (Beijing: Paths International, Ltd., 2011), pp. 82. 22. Zainab Usman, “What Do We Know About Chinese Lending in Africa?” Carnegie Endowment for International Peace, JUNE 02, 2021, https:// c a r n e g i e e n d o w m e n t . o r g / 2 0 2 1 / 0 6 / 0 2 / w h a t -­d o -­w e -­k n o w -­ about-­chinese-­lending-­in-­africa-­pub-­84648. 23. R.  Evan Ellis, “China, Russia, India and the Venezuelan Petroleum Industry,” Latin Business Chronicle, December 11, 2013, http://www. latinbusinesschronicle.com/esp/article.aspx?id=6660. 24. See, for example, Hermoso and Fermín, 2019. 25. “Venezuela tendrá cuatro fábricas de teléfonos móviles,” Tecnologia y Comunicación, February 23, 2009, http://www.tecnologiahechapalabra.com/comunicaciones/miscelanea/articulo.asp?i=3567. 26. Christopher Balding, “Venezuela’s Road to Disaster Is Littered with Chinese Cash,” Foreign Policy, September 6, 2017, https://foreignpolicy.com/2017/06/06/venezuelas-­r oad-­t o-­d isaster-­i s-­l ittered­with-­chinese-­cash/.

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27. See, for example, “The Plenary Session and Closing Ceremony of the 16th Meeting of the China-Venezuela High-level Mixed Committee Successfully Held in Beijing,” The Ministry of Foreign Affairs of the People’s Republic of China, official website, September 14, 2018, https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/wshd_665389/ t1596237.shtml. 28. “Venezuela nacionaliza el proyecto de la faja petrolera del Orinoco,” La Jornada, January 16, 2007, https://www.jornada.com.mx/2007/ 01/16/index.php?section=mundo&article=028n3mun. 29. “Mi Casa Bien Equipada ha colocado más de 3 millones de electrodomésticos chinos en 4 años,” Finanzas Digital, May 14, 2014, https:// www.finanzasdigital.com/2014/05/mi-­casa-­bien-­equipada-­ha-­vendido-­ mas-­de-­3-­millones-­de-­electrodomesticos-­chinos-­en-­4-­anos/. 30. “Programa «Mi Casa Bien Equipada,” Cambio Bolivar, February 7, 2012, https://cambiobolivar.com/programa-­mi-­casa-­bien-­equipada/. 31. Segovia, 2021. 32. “La fracasada obra del ferrocarril Venezuela le llenó de $ los bolsillos a los ‘revolucionarios’,” Noticias JR, May 22, 2017, https://www.noticiasjr.com/la-­fracasada-­obra-­del-­ferrocarril-­venezuela-­le-­lleno-­de-­los-­ bolsillos-­a-­los-­revolucionarios/. 33. Segovia, 2021. 34. Ellis, 2014, p. 168. 35. Javier Corrales, “Maduro is No Chávez, For Now,” Americas Quarterly, December 10, 2012, https://www.americasquarterly.org/article/ maduro-­is-­no-­chavez-­for-­now/. 36. Virginia Lopez, “Nicolás Maduro narrowly wins Venezuelan presidential election,” The Guardian, April 15, 2013, https://www.theguardian. com/world/2013/apr/15/nicolas-­maduro-­wins-­venezuelan-­election. 37. See Briceño and Molina, 2020, p. 189. 38. “China-Latin America Finance Database,” 2021. 39. See Marianna Parraga and Alexandra Ulmer, “Special Report: Vladimir’s Venezuela—Leveraging loans to Caracas, Moscow snaps up oil assets,” Reuters, August 11, 2017, https://www.reuters.com/article/ us-­venezuela-­russia-­oil-­specialreport-­idUSKBN1AR14U. 40. Mayela Armas and Corina Pons, “Exclusive: Venezuela wins grace period on China oil-for-loan deals, sources say,” Reuters, August 12, 2020, https://www.reuters.com/article/us-­venezuela-­china-­exclusive-­ idUSKCN2581UN. 41. Armas and Pons, 2020. 42. Based on the author’s dialogue with one of those representatives. 43. Luc Cohen and Marianna Parraga, “How China got shipments of Venezuelan oil despite U.S. sanctions,” Reuters, June 12, 2020, https://

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www.reuters.com/ar ticle/us-­v enezuela-­o il-­d eals-­s pecialrepor t­idUSKBN23J1N1. 44. Fabiola Zerpa, “China’s Top Oil Producer Prepares to Revive Venezuela Operations” Bloomberg, September 1, 2021, https://www.bloomberg. com/news/articles/2021-­09-­01/china-­s-­top-­oil-­producer-­prepares-­to-­revive­venezuela-­operations. 45. Esteban Israel, “Venezuela to spend $82 million on Chinese K-8 jets,” Reuters, June 6, 2010, https://www.reuters.com/article/us-­venezuela-­ china-­p lanes/venezuela-­t o-­s pend-­8 2-­m illion-­o n-­c hinese-­k -­8 -­j ets-­ idUSTRE65601P20100607. 46. “China entrega a Venezuela primeros aviones militares de transporte Y-8”, El Universo, November 15, 2012, https://www.eluniverso. com/2012/11/15/1/1361/china-­e ntrega-­v enezuela-­p rimeros-­ aviones-­militares-­transporte-­y-­8.html. 47. “Venezuela firma la compra de más radares chinos,” Defensa.com, April 24, 2014, https://www.defensa.com/venezuela/venezuela-­firma-­ compra-­mas-­radares-­chinos. 48. “Venezuela recibe radares chinos de largo alcance,” Infodefensa. com, September 27, 2019, https://www.infodefensa.com/ latam/2019/09/27/noticia-­v enezuela-­r ecibe-­r adares-­c hinos-­l argo-­ alcance.html. 49. Carlos E.  Hernandez, “La Guardia Nacional de Venezuela aumenta su flota de vehiculos blindados chinos Norinco VN4” [Venezuela’s National Guard augments its Chinese armored vehicle fleet with the Norinco VN4], Infodefensa.com, March 3, 2015, https://www.infodefensa. com/latam/2015/03/03/noticia-­g uardia-­n acional-­v enezuela-­ incorpora-­vehiculos-­blindados-­chinos-­norinco.html. 50. “Carnet de la Patria asignará electrodomésticos de ‘Mi casa bien equipada’,” NoticiasCol, January 21, 2020, https://www.noticiascol. com/2020/01/21/carnet-­d e-­l a-­p atria-­a signara-­e lectrodomesticos-­ de-­mi-­casa-­bien-­equipada-­2/. 51. “Treasury Sanctions CEIEC for Supporting the Illegitimate Maduro Regime’s Efforts to Undermine Venezuelan Democracy,” U.S. Treasury Department, official website, November 30, 2020, https://home.treasury.gov/news/press-­releases/sm1194. 52. “Venezuelan refugees and migrants could rise to seven million in 2021,” January 1, 2021, Caribbean News Global, https://www.caribbeannewsg l o b a l . c o m / v e n e z u e l a n -­r e f u g e e s -­a n d -­m i g r a n t s -­c o u l d -­ rise-­to-­seven-­million-­in-­2021/. 53. Dummett, 2005.

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54. “Ecuador nacionaliza la renta extraordinaria del petróleo,” El País, October 4, 2007, https://elpais.com/diario/2007/10/05/economia/1191535218_850215.html. 55. Andres Shilpani, “Ecuador: too small of a fish to fry for vulture funds,” Financial Times, November 23, 2012, https://www.ft.com/ content/98a49114-­f244-­3595-­8a68-­b9a914c88d42. 56. “China-Latin America Finance Database,” 2021. 57. Joshua Schneyer, Nicolas Medina, and Mora Perez, “Special Report: How China Took Control of an OPEC Country’s Oil,” Reuters, 26 November 2013, https://www.reuters.com/article/ us-­china-­ecuador-­oil-­special-­report-­idUSBRE9AP0HX20131126. 58. R. Evan Ellis, “La influencia de Ecuador sobre China para conseguir una vía alternativa de política y desarrollo,” Air & Space Power Journal en Español, 4th Trimester, 2019, https://www.airuniversity.af.edu/ Portals/10/ASPJ_Spanish/Journals/Volume-­30_Issue-­4/2018_4_05_ ellis_s_.pdf. 59. Ellis, “La influencia de Ecuador sobre China para conseguir una vía alternativa de política y desarrollo,” 2019. 60. Nicole M.  Ferrand, “China displaces the U.S. at Ecuador’s Manta Base,” Center for Security Policy, https://centerforsecuritypolicy.org/ china-­displaces-­the-­u-­s-­at-­ecuadors-­manta-­base-­3/. 61. “HPH Signs Port of Manta Concession,” Hutchison Whampoa, official website, November 18, 2006, http://www.hutchison-­whampoa.com/ upload/en/media/press/1845_eng.pdf. 62. “PetroChina to take stake in Ecuador Refineria del Pacifico project,” 2B1 Consulting, May 14, 2013, https://2b1stconsulting.com/ petrochina-­to-­take-­stake-­in-­ecuador-­refineria-­del-­pacifico-­project/. 63. “Convenio Ecuador Con China Incentivará Proyecto Multimodal MantaMANAOS,” Inventariendo China, April 15, 2016, https://inventariandochina.wordpress.com/2016/04/15/convenio-­ecuador-­con-­china­incentivara-­proyecto-­multimodal-­manta-­manaos/. 64. Huang Hongxiang, “In Ecuador, home truths for China,” China Dialogue, June 8, 2012, https://chinadialogue.net/en/business/4966­in-­ecuador-­home-­truths-­for-­china/. 65. Simeon Tegel, “Ecuador’s green president pushes massive Chinese mine,” PRI, March 30, 2012, https://www.pri.org/stories/2012-­03-­30/ ecuador-­s-­green-­president-­pushes-­massive-­chinese-­mine. 66. Quiliconi and Rodríguez Vasco, 2021. 67. “Tide Withdraws From the Port of Manta Concession Contract,” Hutchinson Whampoa, official website, February 6, 2009, https:// hutchisonports.com/media/news/tide-­w ithdraws-­f rom-­t he-­p ort-­ of-­manta-­concession-­contract/.

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68. “Petrolera china desestima que protesta en Tarapoa haya afectado sus intereses,” El Universo, November 14 2006, h t t p s : / / w w w. e l u n i v e r s o . c o m / 2 0 0 6 / 1 1 / 1 4 / 0 0 0 1 / 9 / DDDBC2F740814980A854CA2B3B92CB18.html. 69. Jose Olmos, “Detenida Prefecta de Orellana por caso Dayuma,” El Universo, 9 December 2007, https://www.eluniverso.com/2007/12/ 09/0001/9/DA58C77D888842. 70. Tegel, 2012. 71. Quiliconi and Rodríguez Vasco, 2021. 72. “Microfisuras y fisuras, en dos áreas sensibles del Coca Codo,” El Comercio, 13 May 2018, https://www.elcomercio.com/actualidad/ microfisuras-­fisuras-­cocasinclair-­defectos-­energia.html. 73. “Erosión del río Coca amenaza oleoductos e hidroeléctrica,” La Hora, May 19, 2021, https://www.lahora.com.ec/pais/erosion-­del-­rio-­coca­amenaza-­oleoductos-­e-­hidroelectrica/. 74. Ellis, “La influencia de Ecuador sobre China para conseguir una vía alternativa de política y desarrollo,” 2019. 75. See, for example, “Villavicencio denuncia contratos de Ecuador con Petrochina,” Vistazo, 28 September 2017, http://www.vistazo.com/ seccion/pais/politica-­n acional/villavicencio-­d enuncia-­c ontratos­de-­ecuador-­con-­petrochina. 76. Fernando Villavicencio, El Feriado Petrolero (Quito: Artes Graficas Silva, 2017). 77. Fernando Villavicencio, Ecuador Made in China (Quito: Artes Graficas Silva, 2013). 78. “Empresa china CETC que vendió radares pide $ 280 millones a Ecuador,” El Universo, 7 November 2016, https://www.eluniverso. com/noticias/2016/11/07/nota/5892721/empresa-­que-­vendio-­radares­pide-­280-­millones-­estado. 79. “Ecuador compra a china 709 vehiclos por 81 milliones de dóllarrs,” Infodefensa, April 7, 2015, http://www.infodefensa.com/ latam/2015/04/07/noticia-­ecuador-­compra-­china-­vehiculos-­millones-­ dolares.html. 80. “Ecuador recibe 10.000 fusiles AK-47 donado por China,” Infodefensa, 5 September 2016, http://www.infodefensa.com/latam/2016/09/05/ noticia-­ecuador-­recibe-­10000-­fusiles-­donados-­china.html. 81. Mozur, Kessel and Chan, 2019. 82. “Ecuador clinches $900 mln loan from China-Moreno,” Reuters, December 18, 2018, https://www.reuters.com/article/ ecuador-­debt-­china-­idUSL1N1YH0YJ.

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83. Paul Harris, “EcuaCorriente starts Mirador production,” Mining.com, July 18, 2019, https://www.mining-­journal.com/events-­coverage/ news/1367672/ecuacorriente-­starts-­mirador-­production. 84. “DP World completes first stage of $1.2bn Ecuador megaport,” 2019. 85. Vijay Prashad, “US rescue of Ecuador from Chinese debt is a trap,” Asia Times, January 24, 2021, https://asiatimes.com/2021/01/ us-­rescue-­of-­ecuador-­from-­chinese-­debt-­is-­a-­trap/. 86. “Bolivian elected president woos China,” 2006. 87. See, for example, Conor Foley, “On the Brink,” The Guardian, September 12, 2008, https://www.theguardian.com/commentisfree/2008/sep/12/bolivia.brazil. 88. Katherine Schmidt, “YPFB Eyes Chinese Partner for Sanandita,” Upstream, June 15, 2012, http://www.upstreamonline.com/live/article1249710.ece. 89. “Amoniaco y urea atraen a capitales chinos,” La Patria, August 12, 2010, http://www.lapatriaenlinea.com/?nota=37384. 90. “Shandong Luneng makes bold El Mutún port proposal,” Metal Bulletin, October 14, 2005, https://www.metalbulletin.com/Article/1839829/ Shandong-­Luneng-­makes-­bold-­El-­Mutn-­port-­proposal.html. 91. “Empresas chinas a cargo de obras, fuera de rubro,” Los Tiempos, 4 October 2015, http://www.lostiempos.com/diario/actualidad/economia/20151004/empr esas-­c hinas-­a -­c argo-­d e-­o bras-­f uera-­d e-­ rubro_317841_704902.Html. 92. “Ministro arremete contra empresas chinas,” Los Tiempos, 16 January 2016, http://www.lostiempos.com/diario/actualidad/econom i a / 2 0 1 6 0 1 2 0 / m i n i s t r o -­a r r e m e t e -­c o n t r a -­e m p r e s a s -­ chinas_330225_733874.html. 93. “Chinese firm inks deal to build hydroelectric plant in Bolivia,” Global Times, 26 June 2014, http://www.globaltimes.cn/content/867571.shtml. 94. Ellis, “Chinese Engagement with Bolivia,” 2016. 95. Aine Quispe, “Crédito chino financiará plan quinquenal,” La Razón, 4 December, 2015, http://www.la-­razon.com/economia/Gobierno-­ credito-­chino-­financiara-­plan-­quinquenal_0_2393160694.html. 96. “Revisan ‘con cautela’ situación de Sinosteel,” Los Tiempos, 28 January 2015, http://www.lostiempos.com/diario/actualidad/econom i a / 2 0 1 6 0 1 2 8 / r e v i s a n -­“ c o n -­c a u t e l a ” -­s i t u a c i ó n -­d e -­ sinosteel_331195_736120.html. 97. Ellis, “Chinese Engagement with Bolivia,” 2016. 98. “Morales anuncia que reactivará su plan de litio,” Diario de las Americas, November 1, 2020, https://www.diariolasamericas.com/america-­ latina/morales-­anuncia-­que-­reactivara-­su-­plan-­litio-­n4210265.

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99. “El Gobierno publicó la licitación internacional de extracción directa de litio en Bolivia,” El País, April 30, 2021, https://elpais.bo/nacional/20210430_el-­g obierno-­p ublico-­l a-­l icitacion-­i nternacional-­d e-­ extraccion-­directa-­de-­litio-­en-­bolivia.html. 100. “Colapso de dique de colas vierte desechos mineros,” Los Tiempos, 1 November 2014, http://www.lostiempos.com/diario/actualidad/economia/20141101/colapso-­d e-­d ique-­d e-­c olas-­v ier te-­d esechos-­ mineros_279483_615083.html. 101. Edwin Miranda V., “La China Sinosteel vuelve a El Mutún después que abandonó el proyecto siderúrgico en 2020,” Bolivia Energía Libre, January 22, 2021, https://www.boliviaenergialibre.com/mineria/la-­ china-­sinosteel-­vuelve-­a-­el-­mutun-­despues-­que-­abandono-­el-­proyecto-­ siderurgico-­en-­2020/. 22 de enero de 2021 Bolivia Energia Libre 0 comentarios Por/Bolivia Energía Libre-La Paz. 102. “Chinese firm inks deal to build hydroelectric plant in Bolivia,” 2014. 103. “Camce logra acuerdo con volqueteros de Misicuni,” Los Tiempos, 21 January 2016, http://www.lostiempos.com/diario/actualidad/ loc a l/201 6 0 1 2 1 / c a m c e-­l o gra -­a c u e r do-­c on-­v ol que te r os-­d e -­ misicuni_330340_734143.html. 104. “Inauguration of 120-MW Misicuni hydro helps Bolivia reduce thermoelectric output,” Hydro Review, September 8, 2017, https://www. h y d r o r e v i e w. c o m / w o r l d -­r e g i o n s / i n a u g u r a t i o n -­o f -­1 2 0 ­mw-­misicuni-­hydro-­helps-­bolivia-­reduce-­thermoelectric-­output/. 105. “Obreros de Sinohydro declaran paro indefinido,” Los Tiempos, 25 January 2016, http://www.lostiempos.com/diario/actualidad/econom i a / 2 0 1 6 0 1 2 5 / o b r e r o s -­d e -­s i n o h y d r o -­d e c l a r a n -­p a r o -­ indefinido_330773_735197.Html. 106. “Rescinde Contrato con Empresa China,” Los Tiempos, 26 January 2016, h t t p : / / w w w. l o s t i e m p o s . c o m / d i a r i o / a c t u a l i d a d / e c o n o mia/20160126/en-­pocas-­líneas_330920_735518.html. 107. “Evo admite que tuvo un hijo con gerente de CAMC,” Los Tiempos, 6 February 2016, http://www.lostiempos.com/diario/actualidad/nacional/20160206/evo-­a dmite-­q ue-­t uvo-­u n-­h ijo-­c on-­g erente-­d e-­ camc_332207_738351.html. 108. “Gobierno afirma que CAMC no podrá acceder a más licitaciones,” La Razón, 8 February 2016, http://www.la-­razon.com/nacional/ Gobierno-­afirma-­CAMC-­acceder-­licitaciones_0_2432756713.html. 109. “Donación de equipos de EEUU y China a las Fuerzas Armadas Bolivia,” Defensa Sur, 10 October 2013, http://www.defensasur.com.ar/index. php/america-­del-­sur/bolivia-­/5670-­donacion-­de-­equipos-­de-­eeuu-­y-­ chinaa-­las-­fuerzas-­armadas-­bolivia.

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110. “Bolivia defends Chinese aircraft purchases,” UPI, October 5, 2009, https://www.upi.com/Defense-­News/2009/10/05/Bolivia-­defends-­ Chinese-­aircraft-­purchases/12721254781104/. 111. “El gobierno decide potenciar la fuerza aérea,” La Razón, 19 February 2007, http://www.adnmundo.com/contenidos/politica/bolivia_compra_aviones_fuerza_aerea_pi_190806.html. 112. “China dona 31 blindados y las FFAA los usarán en las maniobras militares de Chimoré,” La Razón, July 29, 2016, https://www.la-­razon.com/ nacional/2016/07/29/china-­dona-­31-­blindados-­y-­las-­f faa-­los-­usaran-­ en-­las-­maniobras-­militares-­de-­chimore/. 113. “BOL-110, el sistema que centralizará todas las urgencias en una sola línea,” Pagina Siete, August 19, 2018, https://www.paginasiete.bo/ seguridad/2018/8/19/bol-­110-­el-­sistema-­que-­centralizara-­todas-­las-­ urgencias-­en-­una-­sola-­linea-­191087.html. 114. “Bolivia sets sights on launching 2nd communications satellite,” EFE, December 19, 2016, https://www.efe.com/efe/english/technology/ bolivia-­sets-­sights-­on-­launching-­2nd-­communications-­satellite/500002 67-­3129307. 115. “Morales anuncia que reactivará su plan de litio,” 2020. 116. “El proyecto retoma su avance tras estar paralizado casi un año,” El Pueblo, May 23, 2021, https://www.ylb.gob.bo/archivos/notas_archivos/especial_-­_litio_bolivia__compressed_(1).pdf. 117. Fransesc Relea, “Argentina espera captar grandes inversiones de China” El País, November 17, 2004, https://elpais.com/diario/2004/11/17/ economia/1100646010_850215.html. 118. “Las empresas de China y Japón que invierten en activos mineros de Chile y Argentina,” BNAmericas, February 10, 2020, https://www.bnamericas.com/es/reportajes/las-­e mpresas-­d e-­c hina-­y -­j apon-­q ue­invierten-­en-­activos-­mineros-­de-­chile-­y-­argentina. 119. Felicity Lawrence, “Global food crisis: China land deal causes unease in Argentina,” The Guardian, June 1, 2011, https://www.theguardian. com/global-­d evelopment/2011/jun/01/china-­l and-­d eal-­u nease­argentina-­agribusiness. 120. R. Evan Ellis, “Punto por punto, todos los tentáculos de las cada vez más profundas relaciones entre Argentina y China,” Infobae, February 12, 2021, https://www.infobae.com/america/opinion/2021/02/12/ punto-­por-­punto-­todos-­los-­tentaculos-­de-­las-­cada-­vez-­mas-­profundas-­ relaciones-­entre-­argentina-­y-­china/. 121. Kirsten Korosec, “China’s CNPC Eyes Repsol YPF’s Argentine Arm,” CBS News, July 2, 2009, https://www.cbsnews.com/news/ chinas-­cnpc-­eyes-­repsol-­ypfs-­argentine-­arm/.

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122. Sebastian D.  Penelli, “Radiografía de las inversiones chinas en energía argentina,” Ámbito, September 7, 2020, https://www.ambito.com/ energia/china/radiografia-­las-­inversiones-­s-­argentina-­n5130844. 123. Geoff Colvin, “Inside China’s $43 Billion Bid for Food Security,” Fortune, April 21, 2017, https://fortune.com/2017/04/21/ chemchina-­syngenta-­acquisition-­deal/. 124. “Chinese companies, Argentina further railway cooperation with four new deals,” Xinhua, December 12, 2020, http://www.xinhuanet.com/ english/2020-­12/12/c_139583789.htm. 125. Ellis, “Punto por punto, todos los tentáculos de las cada vez más profundas relaciones entre Argentina y China,” 2021. 126. Penelli, 2020. 127. Ellis, “Punto por punto, todos los tentáculos de las cada vez más profundas relaciones entre Argentina y China,” 2021. 128. “Ushuaia: el paraíso tecnológico del fin del mundo,” Infobae, July 21, 2016, https://www.infobae.com/tendencias/2016/07/21/ ushuaia-­el-­paraiso-­tecnologico-­del-­fin-­del-­mundo/. 129. Garrison, 2019. 130. “Presentaron proyecto de tecnología aeroespacial a instalarse en Parque Industrial de Río Gallegos,” 2021. 131. Andrew England, “CBC buys stake in Standard Bank’s UK business,” Financial Times, February 2, 2015, https://www.ft.com/content/ b4c8903c-­aade-­11e4-­91d2-­00144feab7de. 132. “Central Bank renews currency swap deal with China for another three years,” 2020. 133. “Global Insider: China-Argentina Trade Relations,” World Politics Review, February 2, 2011, https://www.worldpoliticsreview.com/ trend-­lines/7752/global-­insider-­china-­argentina-­trade-­relations. 134. “China to supply Argentina five ‘Malvinas Class’ offshore patrol vessels,” Mercopress, February 5, 2015, https://en.mercopress.com/2015/02/05/ china-­to-­supply-­argentina-­five-­malvinas-­class-­offshore-­patrol-­vessels. 135. “Analysis: China looks to break into Latin American market via Argentina,” IHS Jane’s 360, February 10, 2015, http://www.janes. com/ar ticle/48872/analysis-­c hina-­l ooks-­t obreak-­i nto-­l atin­american-­market-­via-­argentina. 136. Guido Braslavsky, “La Fuerza Aérea descartó la compra de un caza chino,” Clarin, August 29, 2015, https://www.clarin.com/politica/ fuerzas-­armadas-­recorte-­agustin-­rossi_0_r1GeqAQtDQg.html. 137. “El caza JF-17: la oferta de China para modernizar la Fuerza Aérea Argentina,” Agendar, July 20, 2021, https://agendarweb.com. ar/2021/07/20/la-­o ferta-­d e-­c hina-­p ara-­m odernizar-­l a-­f uerza­aerea-­argentina/.

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138. “China, Brazil Holds Joint Naval Drill,” Global Times, October 29, 2013, https://www.globaltimes.cn/content/821136.shtml. 139. Alistair Thompson and David Gagne, “Power Vacuum Leads to Fighting Among Chinese Mafias in Argentina,” Insight Crime, February 28, 2017, https://www.insightcrime.org/news/brief/power-­vacuum-­leads-­to­fighting-­among-­chinese-­mafias-­in-­argentina/. 140. Loreley Gaffoglio, “China donó equipamiento logístico para la seguridad de la cumbre del G20 por 17,5 millones de dólares,” Infobae, https:// www.infobae.com/politica/2018/11/13/china-­dono-­vehiculos-­de­asalto-­para-­la-­seguridad-­de-­la-­cumbre-­del-­g20//. 141. “Barco guardacostas argentino hunde a pesquero de bandera china,” BBC Mundo, March 15, 2016, https://www.bbc.com/mundo/ noticias/2016/03/160315_buque_argentino_derriba_barco_chino_ prefectura_bm. 142. Author interview off the record with Argentine security experts, 2020. 143. “Dams jeopardise Argentina’s Santa Cruz river and financial flows,” Dialogo Chino, October 25, 2016, https://dialogochino.net/en/ climate-­energy/7559-­dams-­jeopardise-­argentinas-­santa-­cruz-­river-­and-­ financial-­flows/. 144. Gaston Dubois, “JF-17 Block III para Argentina en el presupuesto 2022,” Aviación Online, September 19, 2021, https://www.aviacionline. com/2021/09/jf-­17-­block-­iii-­para-­argentina-­en-­el-­presupuesto-­2022/. 145. Martin Dinatale, “Argentina y China apuran un plan de inversiones por u$s 30.000 millones,” Cronista, February 7, 2021, https://www.cronis t a . c o m / e c o n o m i a -­p o l i t i c a / a r g e n t i n a -­y -­c h i n a -­a p u r a n -­u n ­plan-­de-­inversiones-­por-­us-­30-­000-­millones/. 146. “Nación reimpulsa el tren a Vaca Muerta con inversión de u$s800 millones,” Nación, December 16, 2020, https://www.ambito.com/ nacional/trenes/nacion-­reimpulsa-­el-­tren-­vaca-­muerta-­inversion-­us800-­ millones-­n5155988. 147. Richards, 2017. 148. Penelli, 2020. 149. Ellis, “Punto por punto, todos los tentáculos de las cada vez más profundas relaciones entre Argentina y China,” 2021. 150. “China Stakes Its Claim in Latin American Energy,” 2021, p. 12. 151. Uki Goñi, “China’s billion-dollar pig plan met with loathing by Argentinians” The Guardian, August 14, 2020, https://www.theguardian.com/global-­d evelopment/2020/aug/14/chinas-­b illion-­d ollar-­ pig-­plan-­met-­with-­loathing-­by-­argentinians. 152. Heath, 2020.

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153. “La firma china ZTE llega a Jujuy,” America Economia, July 5, 2019, https://asialink.americaeconomia.com/economia-­y -­n egocios-­ informatica/la-­firma-­china-­zte-­llega-­jujuy. 154. Ellis, “New Directions in the Deepening of China-Argentine Engagement,” 2021. 155. “How China Ranks Its Partners in LAC,” Interamerican Dialogue, February 3, 2021, https://www.thedialogue.org/blogs/2021/02/ how-­china-­ranks-­its-­partners-­in-­lac/. 156. Toby Westerman, “China, Cuba and the espionage alliance against the U.S.” Canada Free Press, January 10, 2012, https://canadafreepress. com/article/china-­cuba-­and-­the-­espionage-­alliance-­against-­the-­u.s. 157. Lazarus and Ellis, 2021. 158. Esteban Israel, “EXCLUSIVE—China company to lead $6 bln Cuba refinery update,” Reuters, November 22, 2010, https://www.reuters. com/article/idINIndia-­53084020101122. 159. Lazarus and Ellis, 2021. 160. Lazarus and Ellis, 2021. 161. Lazarus and Ellis, 2021. 162. “Cuba welcomes new internet cable link with Venezuela,” BBC News, February 11, 2011, https://www.bbc.com/news/world-­latin-­ america-­12411845. 163. Lazarus and Ellis, 2021. 164. “Con ayuda de China se moderniza el puerto de Santiago de Cuba,” Periodoco Cubano, December 9, 2017, https://www.periodicocubano. com/ayuda-­china-­se-­moderniza-­puerto-­santiago-­cuba/. 165. Marc Frank, “Chinese firm to build golf resort in Cuba as U.S. tourism interest grows,” Reuters, May 8, 2015, https://www.reuters.com/article/us-­cuba-­china-­golf-­idUSKBN0NT1Q620150508. 166. Carol E. Lee and Felicia Schwartz, “U.S. Competes With China for Influence in Cuba,” The Wall Street Journal, March 18, 2016, https://www.wsj.com/ articles/u-­s-­competes-­with-­china-­for-­influence-­in-­cuba-­1458293405. 167. “China’s bus-maker Yutong helps blaze new paths in Cuba’s transportation,” China Daily, June 26, 2016, http://usa.chinadaily.com.cn/ business/2016-­06/26/content_25858469.htm. 168. Lazarus and Ellis, 2021. 169. Lazarus and Ellis, 2021. 170. Jack Dutton, “Is China Behind Cuba’s Protests Being Censored? How Beijing Could be Linked,” Newsweek, July 12, 2021, https://www.newsweek. com/china-­behind-­cuba-­protests-­censored-­beijing-­linked-­1608771. 171. See Ellis, “Populism, China and Covid-19: Latin America’s New Perfect Storm,” 2021.

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172. Andres Oppenheimer, “La ‘depresión democrática’,” El Comercio, September 13, 2021, https://elcomercio.pe/opinion/columnistas/ la-­depresion-­democratica-­por-­andres-­oppenheimer-­noticia/. 173. See Silvia Fesquet, “Alberto Fernández, Cristina, el poder y la autoridad,” Clarin, December 13, 2020, https://www.clarin.com/opinion/alberto-­ fernandez-­cristina-­poder-­autoridad_0_-­1Btny277.html. 174. Agustino Fontevecchia, “‘Lawfare’ In Argentina And Alberto Fernández & Cristina Kirchner’s War With The Media And The Judiciary,” Forbes, December 10, 2019, https://www.forbes.com/ sites/afontevecchia/2019/12/10/lawfare-­in-­argentina-­and-­alberto-­ fernndez%2D%2Dcristinas-­war-­with-­the-­media-­and-­the-­judiciary/?sh=3 dd3360a5efa. 175. Lucero Chavez Quispe, “Gabinete de Pedro Castillo obtuvo voto de confianza: los efectos políticos y económicos,” Forbes, August 27, 2021, https://forbes.co/2021/08/27/actualidad/primer-­gabinete-­bellido-­ del-­gobierno-­de-­pedro-­castillo-­obtuvo-­voto-­de-­confianza-­los-­efectos-­ politicos-­y-­economicos/. 176. “Pedro Castillo se reunió con embajador de la República Popular China,” La Republica, July 15, 2021, https://larepublica.pe/elecciones/2021/07/15/elecciones-­2021-­pedro-­castillo-­se-­r eunio-­con-­ embajador-­de-­la-­republica-­popular-­china-­pltc/. 177. “Aprueban en Chile propuesta para reforma de Carabineros,” TeleSur, August 28, 2021, https://telesurtv.net/news/chile-­comision-­convencion-­ constitucional-­propuesta-­reforma-­carabineros-­20210828-­0019.html. 178. “Xiomara Castro lidera intención de voto en Honduras, según encuestadora internacional TResearch,” Notibomba, September 11, 2021, https://notibomba.com/xiomara-­castro-­lidera-­intencion-­de-­voto-­en-­ honduras-­segun-­encuestadora-­internacional-­tresearch/. 179. Adriana Alsema, “How a former guerrilla is becoming unbeatable in Colombia’s election race,” Colombia Reports, April 26, 2021, https:// colombiareports.com/how-­a-­former-­guerrilla-­is-­becoming-­unbeatable-­ in-­colombias-­presidential-­elections-­race/. 180. Tom Phillips, “Lula 2022? Brazil poised for sensational political comeback,” The Guardian, July 30, 2021, https://www.theguardian.com/ world/2021/jul/30/lula-­2 022-­b razil-­p oised-­f or-­s ensational-­ political-­comeback. 181. Brian Harris, “Brazil’s ‘third way’ candidates gear up to challenge Bolsonaro,” Financial Times, August 25, 2021, https://www.ft.com/ content/a773024f-­771b-­40e0-­a422-­3a9b7e02bf68. 182. “Revelan documentos sobre compra de armas de Maduro a Irán,” Diario de las Americas, October 10, 2021, https://www.diariolasamericas.

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c o m / a m e r i c a -­l a t i n a / r e v e l a n -­d o c u m e n t o s -­c o m p r a -­a r m a s -­ maduro-­iran-­n4233981. 183. Shannon Tiezzi, “China’s Venezuela Headache,” The Diplomat, February 1, 2019, https://thediplomat.com/2019/02/chinas­venezuela-­headache/. 184. Francisco Monaldi, “China Can Help Save Venezuela. Here’s How,” Americas Quarterly, April 15, 2019, https://www.americasquarterly. org/article/china-­can-­help-­save-­venezuela-­heres-­how/. 185. “China-Latin America Finance Database,” 2021. 186. “China Sees Opportunity as Venezuela’s Oil Industry Hits Rock Bottom,” Yahoo, September 8, 2021, https://finance.yahoo.com/news/china-­ sees-­opportunity-­venezuela-­oil-­000000540.html.

CHAPTER 8

Military Engagement and Its Role

Overview As noted in earlier chapters, Chinese military engagement is neither the most significant aspect of its activities in Latin America and the Caribbean nor the core of its strategic concept for engagement there. Nonetheless, activities by the People’s Liberation Army (PLA) and other Chinese police and security forces are part of China’s engagement with the region, which the PRC itself officially recognized.1 Moreover, such engagement is part of the broader set of mutually reinforcing PRC government and other activities for advancing and protecting its objectives in the hemisphere and globally, and it is important to analyze and recognize them on such grounds.

The Purpose of Chinese Military Engagement in Latin America As noted in Chap. 2, PRC military activities in Latin America and the Caribbean are a supporting element to China’s principally economically oriented strategy, driven in part by imperatives and opportunities arising from its commercial and other activities in the region. Nonetheless, PRC military activities in the region, as elsewhere, are also designed to contribute to China’s long-run defense goals, including transformation of the Peoples Liberation Army into a large, modern, technically cutting-edge © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_8

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force, capable of operations in all parts of the world (including Latin America) against adversaries such as the United States if called upon to do so. With respect to short-term imperatives, the PRC’s growing commercial presence in Latin America, like in other parts of the world, creates opportunities for it to expand military ties as part of its broader engagement, as well as opening doors for its companies to sell arms to the region. As noted in Chaps. 5 and 7, regimes welcoming economic benefits from China, particularly populist governments embracing a broader political relationship with the PRC, are often open to take the military component of that relationship further than their non-populist counterparts. The PLA and Chinese arms companies, for their part, have shown themselves willing to take advantage of the opportunity, so long as doing so does not undermine its other strategic goals such as access to markets, sources of supply, and technology, particularly through provoking a significant response from the United States or leading others to see its advances in the hemisphere as a security threat to be resisted. The complement to the opportunities for PRC military engagement in the region that arise from its commercial activities there are the imperatives created by the dangers that operating there present to its personnel and companies, leading to arguments to have some type of security relationship with the region, even only in a modest fashion. Such dangers were highlighted by China’s need to evacuate personnel from Libya in 2011 and from Yemen in 2015. As highlighted by the popular Chinese movie Wolf Warrior 2, the Chinese people, as well as its government, are increasingly aware of such challenges.2 At the same time, expanded PRC assertiveness under Xi Jinping furthers the willingness of China to defend its personnel and global interests abroad. The threats to Chinese personnel overseas go beyond the experiences in Libya and Yemen, however, and include numerous cases in Latin America itself. These include the takeover by protesters of a Chinese-run oilfield in Tarapoa, Ecuador, in November 2006, with the brief taking hostage of the Chinese workers.3 They also include more than two dozen attacks on Chinese oil operations in the eastern plains of Colombia, culminating in the kidnapping of three oil workers in 2011.4 Other examples include the previously noted PRC difficulties with robberies and kidnappings in Venezuela as the security situation deteriorated in that country, as well as violent protests against Chinese mining operations in Peru at Rio Blanco5 and Las Bambas,6 among others. Examples giving the PRC reasons for

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concern also include attacks against the Chinese firm Sinohydro during its work in Honduras building the Patuca III hydroelectric facility in the remote Department of Olancho.7 In recent years, there have also been incidents involving explicit attacks against Chinese government personnel and facilities in the region. In September 2021, for example, a man threw an explosive device at the Chinese consulate in Rio de Janeiro.8 As discussed in Chap. 9, the impact of the Covid-19 pandemic in making the region poorer and more unequal, with new patterns of crime and social mobilization,9 will only increase the challenges for the Chinese. Such challenges create imperatives for not only military cooperation but also cooperation with respect to police and other security affairs, and possible interest by Chinese private security forces to expand their operations into the region, as they have begun to do in Asia and Africa.10 Beyond short-term imperatives, as argued in Chap. 2, PRC military engagement in Latin America and elsewhere also supports the long-term goal of the PLA of being a large, modern force capable of global combat and support operations, if called upon to do so, against a rival such as the United States. First, the sale of military assets and technologies in the region by Chinese companies such as NORINCO and CATIC helps to improve their military products, their maintenance and training support, and helps to keep the PRC defense technical industrial base warm for providing such products to the PLA with the best possible quality. Second, Chinese defense outreach builds relationships and knowledge that support PLA ability to operate with Latin American counterpart institutions, and in the environment of the region if called upon to do so. Relevant activities include PLA institutional visits to Latin America, bringing Latin American military officers to the PRC for courses while developing relationships with and evaluating them, reciprocally sending PLA personnel to Latin American schools to learn their doctrine and tactics, and where appropriate, adopt the best of their content. Other relevant activities include PLA visits to the region through port calls, exercises, and other engagements, the experiences that increase Chinese familiarity with the Latin American and Caribbean operating environment, its military institutions, and the technical characteristics of its facilities, including ports, airfields, land bases, and associated terrain. In a future war, such as one that could conceivably break out within a decade over a PRC attempt to forcibly incorporate Taiwan into the PRC,

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or a conflict over claims in the South or East China Sea, US and coalition forces would face a PLA Navy that at the time could reasonably be more than twice the size of that of the United States,11 with multiple carrier battle groups capable of coordinated operations, as well as significantly quieter, more capable submarines and warships. It is not inconceivable that the opening phase of such a war could go badly for the United States, with its possible loss of multiple aircraft carriers and other surface combatants, sending a powerful signal to the rest of the world about Chinese power, and leading a number of global actors to calculate that the United States would not be able to reverse in the near term, the gains that the Chinese likely would have made. Indeed, the interpretations of US resolve made by such actors would be colored by other US foreign policy actions, such as its chaotic withdraw from Afghanistan. Thus, it is not unreasonable to believe that some Latin American countries, including but not limited to anti-US regimes, might calculate that the United States had lost the capability and will to fight the PRC to the point of achieving a decisive victory. With such a calculation, certain anti-US regimes in the region could effectively bet against the United States, including permitting PLA access to their ports, airfields, and other facilities during the conflict. If that occurred, the rapidity with which the PRC could transition during the conflict from the absence of a formal alliance or basing agreement with such a partner, to an operationally useful presence, is greatly accelerated by the PLA’s pre-existing relationships with the military officers of the country, its knowledge of its partners’ institutions and capabilities from having visited them, as well as access to technical data on those ports airfields and facilities, including that obtainable through PRC-based logistics and other commercial companies operating in the country.

PRC Arms Sales to the Region As with the advance of PRC-based companies in other strategically prioritized sectors, Chinese companies in defense industries initially began establishing a presence in the region by selling relatively low sophistication goods competing on their low price to customers disposed to buy them, sometimes donating goods with the support of the PRC government to establish the relationship. They used such opportunities to position themselves in the market and work their way into higher quality, more sophisticated products.

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Some of the earliest arms sales to the region were items such as rifles and man-portable air defense munitions, sold to countries not closely aligned with the United States, generally with limited defense budgets, for whom the low-priced Chinese goods were attractive. During the 1990s, for example, the Bolivian military purchased a quantity of low-capability Chinese HN-5 shoulder-fired anti-aircraft missiles.12 Those missiles became a focus of controversy in 2006 when transitional Bolivian president Eduardo Rodriguez Veltze transferred the then outdated arms to the United States prior to the inauguration of president-elect Evo Morales.13 With respect to Chinese sales of larger, more sophisticated items to the region, as noted in Chap. 7, it has principally been leftist populist states that opened the door for such interactions. This includes important purchases of weapon systems by Venezuela, Ecuador under Rafael Correa, Bolivia under Evo Morales, and Argentina under Christina Fernandez. The path to China’s first significant sale of military end items to the region began when Venezuela’s anti-US leftist populist leader Hugo Chavez was denied spare parts for the country’s US-made F-16 fighters and other weapons and then blocked from acquiring munitions from both the Europeans and Brazil, leading him to turn to Russia to rearm the country14 and subsequently to the PRC.15 The first Venezuelan purchases of Chinese end items included 12 moderately capable Harbin K-8 fighters, eventually expanded to 40.16 The regime also acquired multiple lots of JYL-1 air defense radars,17 later followed by JY-27As.18 Venezuela also went on to buy Chinese Y-8 and Y-12 military transport aircraft.19 With respect to ground systems, the regime purchased multiple different types of Chinese armored vehicles for its naval infantry, and later for its National Guard, including VN-4 armored personnel carriers.20 The new Chinese equipment with relatively modern electronics reportedly compared favorably to the older, remanufactured, vehicles provided by Russia, such as the BMP-3s, BTRs, and T-72 tanks sold by Russia’s Rosboronexport to the Venezuelan army. With respect to Bolivia, the purchases of Chinese weapon systems by that nation’s leftist populist regime began at approximately the same time that the Chavez regime’s purchases of Chinese arms for Venezuela began. Bolivia’s purchases initially included six K-8 fighters, which the Morales government purchased for use as interceptor aircraft, and later, six Chinese H-425/Z-9 helicopters.21 In 2016, as part of the recapitalization of Bolivia’s land forces, the Morales government further bought 31 Chinese armored vehicles.22 The Bolivian general involved in the transaction was

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later arrested for corruption associated with conspiration to pay an inflated price for the equipment and pocket the money as a kickback.23 Like Venezuela and Bolivia, the leftist populist leftist government of Rafael Correa in Ecuador also bought equipment from the PRC shortly after consolidating his power. His government’s initial purchases included radar systems from the Chinese company CETC, although the deal was later canceled and became subject of a lawsuit because the radars were not seen as complying with the requirements under which they were purchased.24 Despite the problem with the radars, made worse by the evolution of the dispute into a lawsuit, the Correa government went on to purchase 709 military vehicles, including 4x4 and 6x6 trucks, busses, and other items badly needed by the Ecuadoran Army.25 His government further went on to buy 10,000 assault rifles, produced under license by the Chinese.26 In Argentina, the leftist populist government of Cristina Fernandez began its foray into acquisitions of Chinese end items with the 2008 $2.6 million purchase of four WMZ-551 Chinese armored personnel carriers to equip the Argentine battalion of the joint Argentina-Chile Cruz del Sur peacekeeping brigade for operations in Haiti.27 Problems with the initial purchase meant that additional quantities of vehicles beyond the original four were never purchased. Nonetheless, toward the end of President Fernandez’s second term in office, the administration pursued a much larger series of military acquisitions from the PRC, including 107 armored vehicles,28 5 P-18 offshore patrol vessels,29 and 20 JF-17/FC-1 fighter aircraft,30 with the later deal involving a co-production offset in Argentina. With return of the Peronists in Argentina, at the time this book went to press, the acquisition of 8x8 light armored vehicles was reportedly again under consideration.31 Argentina’s Peronist government committed in even more certain terms to acquiring Chinese JF-17 fighters, including them in its 2022 budget,32 although at the time this book went to press, competing offers, such as India’s Texas Mk 1A, were still under consideration.33 While the PRC’s initial advances were based on the sale of end items to politically receptive populist governments, other countries in the region also began to purchase Chinese end items, based in part on their competitive pricing. Significant advances included the Peruvian Army’s acquisition of 27 Type 90-B truck mounted rocket launchers,34 beating out a competing Russian offer to sell Peru their BM-30 system. As with the sale of

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Chinese helicopters to Bolivia, the Type 90-B sale later became the subject of an investigation by Peruvian authorities regarding corruption in the form of an overpricing scheme.35 With respect to maritime systems, in 2014, the Chinese company China Shipbuilding Industry Corporation (CSIC) sold the Caribbean nation of Trinidad and Tobago an Offshore Patrol Vessel (OPV), first sale of a Chinese naval vessel in the hemisphere, predating the previously mentioned offer to sell a similar vessel to Argentina. Chinese shipbuilding companies also attempted, unsuccessfully, to participate in a competitive procurement for a new Brazilian frigate,36 as well as attempting to interest the prior left-center government of Uruguay in a $4.2 million warship.37 In addition to actual sales, PRC-based military companies have become increasingly active in their presence in military shows in Latin America such as Brazil’s LAAD,38 Peru’s SITDEF, and Chile’s Fidae and Exponaval.39 Although defense industry experts note that the quality of their presence is uneven,40 they are generally becoming more sophisticated in what they bring to such shows. Beyond the sale of military goods, as noted previously, the PRC also uses donations to build its military institutional relationships and open the door for later procurements. In Bolivia, from the beginning of the Evo Morales regime, its military received regular donations of Chinese trucks, Kevlar vests, and other goods. The Peruvian military similarly received Beiben, Dong Feng, and Shaanxi military trucks. In the Caribbean, the Guyana Defense Force (GDF) received a Chinese Y-8 military transport aircraft and, in 2017, military construction equipment.41 The latter was reportedly well received by the then president and former Brigadier General David Granger, whose prior military service had made him a strong proponent of using the GDF to advance national development. In a similar fashion, the Jamaica Defense Force received regular donations of PRC military goods, including $1.1 million donation of non-lethal gear in 2011.42 Even the US-aligned Colombian military, during the early 2000s when it was working very closely with the United States, received regular donations of Chinese military goods. These included Chinese hats and gloves donated to Colombia for its High Mountain battalion.43 In 2013, the PRC gave the Colombian Army $3  million in military bridging equipment.44 In 2014, it donated two Chinese Y-12 military transport aircraft, which Colombia put into support of the Air Force–operated airline Satena.

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The aircraft were ultimately removed from service five years later over a question of their structural integrity.45

In-Region Engagement and Military Visits With respect to Chinese military activities and presence in Latin America and the Caribbean, while the PLA has maintained a relatively low profile, it has engaged in a greater number of activities, more frequently than is commonly acknowledged. These include regular PLA port calls and institutional visits in the region, limited-scale military exercises with partner nations, and humanitarian engagements of increasing sophistication. Chinese military deployments in Latin America and the Caribbean include three visits by its hospital ship Peace Ark, in 2011, 2015, and 2018–2019, with each visit more sophisticated and longer than the one that preceded it.46 Beyond the Peace Arc, in 2013, two Chinese missile frigates and an escort ship crossed the Pacific to make a port call and engage in a military exercise with Chile.47 The ships then transited the rough waters of the Straits of Magellan and subsequently made port calls in Argentina and Brazil.48 PLA Navy presence in the region also includes at least one visit to Cuba by ships from the PLA Navy 20th Naval Task Force, which put into port in Havana Harbour in December 2015.49 Perhaps the biggest and longest Chinese engagement in the region was the deployment of PLA military police to the MINUSTAH peacekeeping force in Haiti from 2004 through 2012. That engagement involved a continuous, rotating presence of 100–200 Chinese military police50 resembling deployments by PRC peacekeeping forces in Africa. Symbolically, eight PLA soldiers, some of whom were part of the contingent and some of whom were apparently visiting when a 7.2 magnitude earthquake struck Haiti in 2010, were the first uniformed PLA personnel officially to die on a mission in Latin American soil.51 Beyond Haiti, other PLA deployments to the region include a joint exercise realized with the Peruvian army in 2010, organized around delivery and exercise of a mobile field hospital donated by the PLA. At a smaller scale, the PLA has also participated in military parades in Mexico during that nation’s Independence Day in 2016,52 as well as in Venezuela in 2011.53 With respect to institutional visits, PLA military officers and other officials have regularly traveled to Latin America and the Caribbean to engage with their Latin American counterparts, as well as attending military

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symposiums in the region. PLA military personnel have also participated in the Colombian military’s Lanceros course for special operations forces,54 as well as in Brazil’s jungle warfare school in Manaus.55 PLA personnel have similarly visited Colombia’s demining school, as well as Brazil’s peacekeeping institute CCECOPAB, seeking to obtain useful information about their programs that could be incorporated within PLA counterparts in China.56

Training and Professional Military Engagement The PLA has hosted a significant and increasing number of Latin American and Caribbean military officers in China for courses of increasing sophistication and duration. For years, virtually every country that diplomatically recognizes the PRC in Latin America and the Caribbean has sent a small number of officers to multi-week courses in the program for foreigners in China’s National Defense University in Changping, outside Beijing. These courses, realized in English, Spanish, and Portuguese, are reportedly of questionable quality; they help the PLA to build important relationships with future Latin American military leaders, as well as provide an opportunity for their PLA counterparts to learn from and assess those individuals for future engagements. Beyond Changping, the PLA is increasingly hosting Latin American military personnel for longer courses of greater quality in its institutions in other parts of PRC. China has, for example, hosted Brazilians, Uruguayans, and others at its command and general staff course for the Chinese Navy in Nanjing, as well as at the corresponding school for the army, outside of Nanjing,57 as well as a special operations course in Shijiazhuang.58

Police and Law Enforcement Cooperation As noted previously, China–Latin American police and law enforcement cooperation reflects in part the imperatives of the expanding role of PRC-­ based companies and personnel on the ground in the region and their associated vulnerabilities to criminal activity and social protest. It thus reflects China’s perceived need to have a stronger relationship with Latin American police and other security forces due to the expanding presence in the region of its companies and workers, as well as the role such engagement serves in deepening the broader all-around relationship with Chinese partners.

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The PRC intent to support collaboration in the fight against crime and corruption, both in Latin America and the Caribbean, particularly with respect to Chinese criminal groups operating across the Pacific, is explicitly acknowledged by the 2019–2021 China-CELAC cooperation plan.59 Reciprocally, the need for China’s help in the region, and the corresponding opportunity it creates for the PRC, is driven in part by the relative inability of Latin American law enforcement organizations to effectively combat trans-Pacific organized crime. Specifically, most Latin American and Caribbean law enforcement organizations have little or no capability to coordinate with Chinese law enforcement counterparts outside of the good offices of Interpol in order to pursue cases involving Chinese criminal actors and businesses that touch on their own communities. Nor are Latin American law enforcement authorities well qualified to follow possible criminal connections involving businesses, banks, or other entities in Asia. Similarly, when Latin American law enforcement deals with Chinese ethnic communities in their own countries, few have personnel who can speak Mandarin Chinese, let alone other Chinese dialects such as Hakka or Cantonese, which are still used among other generations in ethnic Chinese communities in Latin America and the Caribbean.60 In the face of such vulnerabilities, the expansion of trans-Pacific commerce, financial, and other activities has created multiple opportunities for the growth of corresponding illicit activities. Such activities can include the sourcing of drugs and their precursor chemicals from the PRC, including ephedrine and pseudoephedrine for methamphetamines, as well as fentanyl.61 Challenges also include purchases by China-based entities of gold and other fruits of illegal Latin American mining, particularly those coming from the principal illegal mining areas in the region such as Madre de Dios in Peru, the Orinoco mining belt in Venezuela, and the interior of Guyana and Suriname, among other locations. Other problematic trans-­ Pacific criminal activities include involvement of Chinese companies, actors, and products in transpacific, trade-based money laundering,62 as well as human smuggling and human trafficking involving Chinese communities in the region.63 The role of local ethnic-Chinese run businesses and casinos in micro-level money laundering is another problem.64 In recognition of the needs of Latin American governments to more effectively combat Chinese and other Trans-Pacific organized crime affecting the region, the PRC has begun to offer assistance to Latin American and Caribbean law enforcement organizations, including translators, facilitation of technical coordination between its police and their Chinese

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counterparts. In a first-of-its-kind project in Argentina in 2015, for example, the PRC loaned a China National Police agent to the Argentine Federal police to help take down the ethnic Chinese triad organization Pixue, which was operating in the greater Buenos Aires area.65 Such cooperation, while badly needed in the region, also raises intelligence concerns, insofar as it provides the Chinese police a glimpse into information on Latin American security processes and information, as well as elites who may be corrupt or otherwise under suspicion. Beyond such active police collaboration, as with China–Latin American military engagement, the PRC government has regularly donated equipment to Latin American police forces. This includes giving $2.6 million in vehicles to the Guyana Police Force in 2017,66 giving 200 motorcycles to the Trinidad and Tobago police service in 2019,67 and 140 motorcycles to the Dominican Republic security forces in March 2021.68 Finally, as in Asia and Africa, as PRC-based security companies develop their capabilities, they are looking to expand operations in support of Chinese SOEs in Latin America and the Caribbean, among other parts of the world. Such Chinese security companies are typically composed of former PLA officers with strong relationships with those Chinese companies,69 although as of the time this book went to press, they were reportedly considered generally less experienced than many of their internationally oriented security company counterparts such as Israeli firms. In Argentina, the company Chinese Overseas Security Group has had a presence since 2019.70 It is reasonable to expect that, as has occurred in other areas, as PRC-based security companies gain experience, they will be able to leverage their ties to Chinese SOEs building a presence in Latin America, and their substantial resources, to penetrate the Latin American and Caribbean market. The increased insecurity across the region created by the Covid-19 pandemic is likely to accelerate this imperative. If the lessons from PRC-based security companies in Africa and Asia are illustrative, however, the expansion of those companies in Latin America is likely to be accompanied by gaffes and abuses, which will become the focus of public discourse in the region.

Implications and Conclusion This chapter has shown that the PRC and its companies play a significant role in security engagement in Latin America, including the sale and donation of increasingly sophisticated military goods, regular presence of the

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PLA across the region, and strong training and professional military education ties with its countries, even if the PLA is not currently seeking to actively develop bases there, or sign anti-US military cooperation agreements with governments of the region. While this chapter has presented evidence that the China–Latin America military-to-military relationship has been most extensively developed by leftist populist nations, that engagement has also extended to close allies of the United States as well, and all types of regimes in-between. This chapter has highlighted that the Chinese security engagement includes not only traditional military-to-military engagement, but with other types of public and private security forces as well. As in other areas, scholars, government officials, and businesspersons sympathetic to the PRC would argue that there are little differences in moral terms, or from the perspective of the sovereignty of Latin American countries, between Chinese security activities and the long-standing security engagement by the United States in the region. Indeed some sympathetic with the PRC could argue that Chinese military and police assistance, donations of needed materiel, and the relatively low price of Chinese military goods sold to the region can contribute to Latin America’s response to its expanding challenges of insecurity and poor governance. While such arguments, on their face, sound reasonable, they are countered by the very different motivations behind Chinese security engagement, including support to the development of an increasingly capable, globally operating PLA, and the creation of options to operate in the region in the context of a future major conflict between China and Western powers, however undesirable such a scenario might be. Although Chinese military engagement in Latin America may, in the near term, be more superficially benevolent than efforts by the Soviet Union during the Cold War to subvert and overthrow democratic governments, Chinese security engagement with the region brings its own set of concerns. While the United States has made mistakes in who within Latin American militaries it trains and supports, it at least has clear legal commitments, overseen by multiple public and private groups, to promote respect for human rights and civil authority among its military counterparts in the region.71 The Chinese have no corresponding restrictions that have been publicly applied to constrain their actions. Indeed, images of Chinese vehicles being used to repress protesters in Venezuela, not unlike China’s brutal response to the Tiananmen Square uprising of 1989, suggest that the question of which regimes and behaviors Chinese weapons, training, and

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other security engagement supports should be a matter of concern for all who value democracy and respect for human rights in Latin America and the Caribbean.

Notes 1. See, for example, “Full text of China’s Policy Paper on Latin America and the Caribbean,” 2016. 2. “Wolf Warrior 2: The nationalist action film storming China,” 2017. 3. “Petrolera china desestima que protesta en Tarapoa haya afectado sus intereses,” 2006. 4. “Vicepresidente les exige a las Farc liberar a tres ciudadanos chinos,” El Tiempo, June 9, 2011, https://www.eltiempo.com/archivo/documento/ CMS-­9582610. 5. “Piura: Protestas masivas en dos provincias contra Río Blanco,” ProActivo, December 19, 2016, https://proactivo.com.pe/piura-­protestas-­masivas­en-­dos-­provincias-­contra-­rio-­blanco/. 6. “Las Bambas: Cinco hechos para comprender el conflicto de las comunidades,” Gestion, March 28, 2019, https://gestion.pe/peru/ bambas-­5-­hechos-­entender-­brevemente-­conflicto-­zona-­nndc-­262703-­ noticia/. 7. Dagoberto Rodriguez, “Paralizadas obras en Patuca III por tomas de pobladores,” La Prensa, June 11, 2019, https://www.laprensa.hn/ hondur a s / 1 2 9 2 5 0 8 -­4 1 0 / p a ra l i z a d a s-­o bra s-­p a tuc a -­i i i -­t oma s-­ pobladores-­olancho-­honduras. 8. Alice Yan, “China urges Brazil to step up protection for diplomatic buildings after attack on Rio consulate,” South China Morning Post, September 19, 2021, https://www.scmp.com/news/china/diplomacy/article/3149254/ china-­urges-­brazil-­step-­protection-­diplomatic-­buildings-­after. 9. See also R. Evan Ellis, “COVID-19: Shaping a Sicker, Poorer, More Violent, and Unstable Western Hemisphere,” U.S.  Army War College, May 15, 2020, https://ssi.armywarcollege.edu/wp-­content/uploads/2020/05/ COVID-­19-­Unstable-­West-­Hem_Ellis_v2.1_post.pdf. 10. Berringer, 2021. 11. Jon Harper, “Eagle vs Dragon: How the U.S. and Chinese Navies Stack Up,” National Defense, March 9, 2020, https://www.nationaldefensemagazine.org/ar ticles/2020/3/9/eagle-­v s-­d ragon-­h ow-­t he­us-­and-­chinese-­navies-­stack-­up. 12. “Rodríguez: No autoricé salida de los misiles” [Rodríguez: I did not authorize the release of the missiles], Correo del Sur, March 16, 2017,

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https://correodelsur.com/seguridad/20170316_rodriguez-­no-­autorice-­ salida-­de-­los-­misiles.html. 13. “EEUU entrega a Bolivia los restos desactivados de 5 misiles chinos HN-5,” Infodefensa, December 13, 2010, https://www.infodefensa. com/latam/2010/12/13/noticia-­e euu-­e ntrega-­a -­b olivia-­l os-­r estos-­ desactivados-­de-­5-­misiles-­chinos-­hn-­5.html. 14. R.  Evan Ellis, “The New Russian Engagement With Latin America: Strategic Engagement, Commerce, and Dreams of the Past,” Carlisle Barracks, PA: U.S.  Army War College Strategic Studies Institute, June 2015, http://www.strategicstudiesinstitute.army.mil/pubs/display. cfm?pubID=1275. 15. Ellis, “Chinese Security Engagement in Latin America,” 2020. 16. Israel, 2010. 17. “Venezuela firma la compra de más radares chinos,” 2014. 18. “Venezuela recibe radares chinos de largo alcance,” 2019. 19. “China entrega a Venezuela primeros aviones militares de transporte Y-8,” 2012. 20. Hernandez, 2015. 21. “Denuncian a exautoridades por ‘anomalías’ en compra de 6 helicópteros” [Former authorities denounced for ‘anomolies’ in purchasing 6 helicopters], El Deber, November 21, 2018, https://eldeber.com.bo/1957_ denuncian-­a-­exautoridades-­por-­anomalias-­en-­compra-­de-­6-­helicopteros. 22. AFP, “China dona 31 vehiculos militares a ejercito de Bolivia,” La Prensa, July 30, 2016, https://www.laprensa.com.ni/2016/07/30/ internacionales/2076219-­china-­dona-­31-­vehiculos-­militares-­a-­ejercito-­ de-­bolivia. 23. “Imputan a un general boliviano por la compra de helicopteros chinos para el Ejercito,” Infodefensa, January 13, 2020, https://www.infodefensa. com/latam/2020/01/13/noticia-­imputan-­general-­bolivianocompra-­ helicopteros-­chinos-­ejercito.html 24. “Empresa china CETC que vendió radares pide $ 280  millones a Ecuador” 2016. 25. “Presidente Correa entrega 709 vehículos al Ejército Nacional” [President Correa delivers 709 vehicles to the National Army], Ministry of National Defense, Government of Ecuador, accessed May 25, 2020, https://www. d e f e n s a . g o b . e c / p r e s i d e n t e -­c o r r e a -­e n t r e g a -­7 0 9 -­v e h i c u l o s ­al-­ejercito-­nacional/. 26. “FF.AA. analizan usar los AK-47 de China para entrenamientos” [FF. AA. analyze using AK-47s from China for training], El Comercio, September 12, 2016, https://www.elcomercio.com/actualidad/ffaa-­analisis-­ak47-­ china-­ecuador.html. 27. Ellis, “Chinese Security Engagement in Latin America,” 2020.

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28. “Analysis: China looks to break into Latin American market via Argentina,” 2015. 29. “China to supply Argentina five ‘Malvinas Class’ offshore patrol vessels,” 2015. 30. Braslavsky, 2015. 31. “China ultima una nueva oferta a Argentina por los blindados Norinco 8x8,” Infodefensa, January 19, 2021, https://www.infodefensa.com/ latam/2021/01/19/noticia-­china-­presentara-­nueva-­oferta-­argentina-­ blindados-­norinco.html. 32. Gaston Dubois, “JF-17 Block III para Argentina en el presupuesto 2022,” Aviacion Online, September 2021, https://www.aviacionline. com/2021/09/jf-­17-­block-­iii-­para-­argentina-­en-­el-­presupuesto-­2022/. 33. “Tejas Mk1A, JF-17, Oshkosh FMTV 6×6: Resumen de la Semana 21/11,” Zona Militar, November 21, 2021, https://www.zona-­militar. c o m / 2 0 2 1 / 1 1 / 2 1 / t e j a s -­m k 1 a -­j f -­1 7 -­o s h k o s h -­f m t v -­6 x 6 ­resumen-­de-­la-­semana-­21-­11/. 34. “Entrega de los lanzacohetes múltiples 90BM al Ejercito de Peru,” Defensa.com, July 20, 2015, https://www.defensa.com/peru/ entrega-­lanzacohetes-­multiples-­90bm-­ejercito-­peru. 35. “Nuevamente sistemas de armas Chinos en juicio” [New Chinese arms systems in legal trial], Infodefensa.com, January 5, 2017, https://www. infodefensa.com/latam/2017/01/05/noticia-­n uevamente-­s istemas-­ armas-­chinos-­juicio.html. 36. Ellis, “The Future of Brazil–China Relations,” 2020. 37. “Uruguay negocia con China donación de una plataforma naval equivalente a 4,2  millones de dólares” [Uruguay negotiates the donation of a naval platform worth 4.2 million dollars from China], Presidency of the Republic of Uruguay, February 9, 2019, https://presidencia.gub.uy/ c o m u n i c a c i o n / c o m u n i c a c i o n n o t i c i a s / a c u e r d o -­c o o p e r a c i o n ­defensa-­uruguay-­china. 38. See, for example, “2015 LAAD exhibition held in Brazil,” Global Times, April 16, 2015, https://www.globaltimes.cn/content/917124.shtml. 39. Ellis, “Chinese Advances in Chile,” 2021. 40. Interview off-the-record with a arms industry expert, Washington DC, June 2021. 41. “China’s army donates $1.2B in equipment to GDF,” Stabroek News, April 4, 2017, https://www.stabroeknews.com/2017/04/04/news/ guyana/chinas-­army-­donates-­1-­2b-­equipment-­gdf/. 42. “Jamaica, China Sign Military Aid Pact,” Caribbean Journal, August 22, 2011, https://www.caribjournal.com/2011/08/22/ jamaica-­china-­sign-­military-­aid-­pact/. 43. Ellis, 2011.

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44. “Mindefensa recibió puentes militares de China avaluados en 3 millones de dólares” [Ministry of Defense received military bridges from China valued at 3  million dollars], El Espectador, October 12, 2013, https:// www.elespectador.com/noticias/judicial/mindefensa-­r ecibio-­puentes-­ militares-­de-­china-­avaluados-­articulo-­452101. 45. Ellis, “Chinese Security Engagement in Latin America,” 2020. 46. Ellis, “Chinese Engagement in Latin America.” 47. “China and Chile,” Ministry of Foreign Affairs of the People’s Republic of China, Accessed May 3, 2021, https://www.fmprc. gov.cn/mfa_eng/wjb_663304/zzjg_663340/ldmzs_664952/ gjlb_664956/3478_665028/. 48. “China, Brazil Holds Joint Naval Drill,” 2013. 49. “Chinese Navy Visits Cuba on Goodwill Trip,” YouTube, December 11, 2015, https://www.bing.com/videos/search?q=China+navy+Havana+ha rbour+2020&docid=608027817178900000&mid=DD6660EF49ADFC 0E8A6FDD6660EF49ADFC0E8A6F&view=detail&FORM=VIRE. 50. Ellis, “Chinese Engagement in Latin America.” 51. “Chinese Peacekeepers’ bodies return home,” CCTV, January 19, 2010, http://english.cctv.com/program/newshour/20100119/102723.shtml. 52. “Armies of Russia, China & U.S.A. marching in a Mexican military parade,” YouTube, October 11, 2016, https://www.youtube.com/ watch?v=tblu5yWKIhM. 53. “Venezuela celebrates 200th Independence Day,” People’s Daily Online, July 6, 2011, http://en.people.cn/90001/90777/90852/7431051.html. 54. Off-the-record interview with Colombian security experts, Bogota, Colombia, 2018. 55. Eben Blake, “Chinese Military Seeks Jungle Warfare Training From Brazil,” International Business Times, August 10, 2015, https://www.ibtimes. com/chinese-­military-­seeks-­jungle-­warfare-­training-­brazil-­2046473. 56. “CCOPAB’s instructor participates in course in China,” Brazil Peace Operations Joint Training Center, December 12, 2017, http://www.ccopab.eb.mil.br/en/center-­n ews/145-­2 017/985-­c copab-­s -­i nstructor-­ participates-­in-­course-­in-­china?highlight=WyJjaGluYSJd. 57. Ellis, “The Evolution of Chinese Security Engagement in Latin America,” 2021. 58. R.  Evan Ellis, “China–Latin America Military Engagement,” Carlisle Barracks, PA: U.S. Army War College Strategic Studies Institute, August 2011, https://ssi.armywarcollege.edu/pubs/display.cfm?pubID=1077. 59. “Celac and China Joint Plan of Action For Cooperation on Priority Areas (2019–2021),” 2021. 60. See, for example, R.  Evan Ellis, “Chinese Organized Crime in Latin America,” Prism, Vol. 4, No. 1, December 1, 2012, pp. 67–77, https://

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cco.ndu.edu/Portals/96/Documents/prism/prism_4-­1/prism64-­77_ ellis.pdf. 61. See, for example, “China Fentanyl Ban Yet to Hamper Mexico’s Crime Groups,” InsightCrime, September 4, 2019, https://insightcrime.org/ news/brief/china-­fentanyl-­ban-­yet-­to-­hamper-­mexico-­crime-­groups/. 62. See, for example, “Colombians Charged in Massive China-based Money Laundering Scheme,” InsightCrime, September 11, 2015, https:// i n s i g h t c r i m e . o rg / n e w s / a n a l y s i s / c o l o m b i a n s -­c h a rg e d -­c h i n a ­drug-­money-­laundering-­scheme/. 63. See, for example, “Chile Facing Human Trafficking Influx from China,” InsightCrime, June 26, 2019, https://insightcrime.org/news/brief/ chile-­facing-­human-­trafficking-­influx-­from-­china/. 64. R. Evan Ellis, “China’s Engagement with Trinidad and Tobago,” Global Americans, March 26, 2019, https://theglobalamericans.org/2019/03/ chinas-­engagement-­with-­trinidad-­and-­tobago/. 65. Thompson and Gagne, 2017. 66. “Force vehicles donated by Chinese gov’t ‘in order,’” Stabroek News, November 8, 2018, https://www.stabroeknews.com/2018/11/08/ news/guyana/force-­vehicles-­donated-­by-­chinese-­govt-­in-­order/. 67. “Police get 200 motorcycles from China,” Trinidad and Tobago Guardian, August 22, 2019,http://www.guardian.co.tt/news/police-­get-­200-­ motorcycles-­from-­china-­6.2.914424.9562095eb4. 68. “República Dominicana y China firman segundo acuerdo de cooperación económica y técnica,” 2021. 69. Yau Tsz Yan, “Chinese Private Security Moves Into Central Asia,” The Diplomat, July 3, 2019, https://thediplomat.com/2019/07/ chinese-­private-­security-­moves-­into-­central-­asia/. 70. Cecilia Degl’Innocenti, “‘Mercenarios chinos’, la estrategia de seguridad de una empresa de ese país en Argentina,” Perfil, November 19, 2021, https://www.perfil.com/noticias/actualidad/empresa-­de-­mercenarios-­ que-­hay-­detras-­de-­la-­estrategia-­de-­seguridad-­china-­en-­argentina.phtml. 71. See, for example, “About the Leahy Law,” U.S. State Department, official website, January 20, 2021, https://www.state.gov/key-­topics-­bureau-­of-­ d e m o c r a c y -­h u m a n -­r i g h t s -­a n d -­l a b o r / h u m a n -­r i g h t s / leahy-­law-­fact-­sheet/.

CHAPTER 9

Impact of Covid-19 in Accelerating China’s Advance

Overview The Covid-19 pandemic has dramatically expanded China’s options for pursuing its strategic objectives in Latin America and the Caribbean.1 At the same time, it has highlighted many of the key aspects of China’s approach to commercial and other engagement in ways that were not as apparent prior to the pandemic. Covid-19 has created opportunities for the PRC in the region in five different ways: First, it has enabled China to use medical outreach, including but not limited to vaccine diplomacy, to pursue its commercial and political interests, including in areas not related to the pandemic such as telecommunications and recognition of the PRC over Taiwan, as well as simply building goodwill. Second, it has increased opportunities for PRC leverage and expanded position of PRC-based firms by increasing the relative importance of Chinese demand for the region’s commodities vis-à-vis traditional markets such as the United States and Europe. Third, as the region moves beyond the pandemic, Chinese companies are well positioned to significantly increase their ownership in strategic sectors, as US, European, and other western firms sell off their positions in poorly performing markets such as those of Latin America. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_9

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Fourth, the weakened fiscal and economic positions of Latin American states increase their need for Chinese loans and investment, and China’s relative leverage in imposing conditions for receiving such funds, at a time when western governments are likely to be fiscally and financially restricted in providing alternative resources. Finally, as noted in Chap. 7, the turn to the left in an unprecedented range of Latin American countries, accelerated by the social and political fallout from Covid-19, will expand the number of states receptive to accepting Chinese money, and willing to do so on terms commercially and strategically advantageous to the PRC. While the combination of these five factors points to a significant advance by the PRC and its companies in the region in the years ahead, that likely advance will also occur in an environment in which Latin American publics are more politically mobilized, and their societies riddled with greater conflict, higher levels of crime and insecurity, deepened government fiscal constraints and dysfunctionality, and heightened suspicion of the PRC, among other challenges. That combination of factors implies that China’s advance will be accompanied by significant polemic and major, recurring challenges for the PRC and the companies involved.

China’s Covid-19 Medical Diplomacy PRC Covid-19 medical diplomacy has evolved in both its focus, as well as how it has been received in the region. As of November 2021, the PRC had provided an estimated $253  million in Covid-19-related aid to the region.2 From the beginning, such medical outreach activities have yielded some short-term benefits for China’s image in and relationship with the region, alongside negative effects. With China’s transition in 2021 from providing protective gear and detection capabilities, to providing vaccines, that engagement became even more impactful for the PRC, winning it some influence in a region desperate for vaccines. Toward the end of 2021, however, those benefits waned as the limited performance of vaccines by Chinese producers such as Sinovac, CanSino, and Sinopharm was felt in the continuing propagation of the disease within countries that had relied principally on Chinese vaccines, and as more effective Western-developed vaccines became more widely available in the region. At the beginning of the Covid-19 pandemic, PRC medical diplomacy was defensive in its posture. In those first months, Chinese messaging and

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initiatives were primarily oriented toward Europe, attempting to offset bad feelings arising from the origin of the coronavirus in Wuhan China, credible accusations that it had escaped from a Chinese virology lab rather than a Chinese wet market, and perceptions that the PRC government was covering up information, including that it had impeded the World Health Organization from providing timely information to the global community about the virus. In Latin America, the early phases of Chinese medical diplomacy concentrated on donations and sales of masks and other personal protective equipment. Later, but still to a lesser degree, Chinese donations began to expand to items such as ventilators, quick tests, thermometers, and thermal imaging cameras.3 Chile, in May 2020, for example, received 21 tons of personal protective equipment and other medical supplies from the PRC to combat Covid-19.4 In Uruguay, by July 2020, the PRC had sent 900,000 masks, 8600 units of protective equipment, 21,120 test kits, and 5 ventilators.5 Early Chinese shipments to the Dominican Republic included 450,000 face masks, personal protective equipment for medical personnel, and 10,000 Covid-19 tests.6 As the demands of the pandemic on the region’s medical infrastructure expanded, the PRC also shifted its giving. In early 2021, for example, the PRC was donating oxygen and other materials to Amazonas State in Brazil, to deal with oxygen shortage and public health crisis.7 Many of the early PRC efforts did not strictly involve charitable giving, but rather, also involved attempts to introduce Chinese medical products, in response to the significant global needs arising from the pandemic. In the face of an array of such needs, the PRC sought to advance its “health silk road” concept,8 originally created in 2015 as part of its broader “Belt and Road Initiative” to emphasize the value of global cooperation and commerce in the medical arena but given new urgency by Covid-19.9 In a number of Latin American countries, the bulk of Chinese donations came through private companies interested in continuing to do business in the region. In Panama, for example, during the early months of the virus outbreak, Chinese companies such as Alibaba and Huawei, for which the country is an important business partner, donated 100,000 masks, 10,080 test kits, 5000 ventilators, among other items.10 By May 2020, however, the Chinese embassy in Panama had increased their coordination of goods being provided by its corporations.11 Although in quantity, in select countries, Chinese medical-related giving and sales surpassed that of the United States, there were problems on

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multiple levels. In the case of Peru, a decision by the government of Martin Vizcarra to purchase 1.4  million uncertified Chinese antibody-­ based tests, which were less accurate than the more expensive genetically based alternative in diagnosing cases, contributed to a large number of false negative results;12 those tested believed they were not contagious when in fact they were, contributing to the spread of the virus in the country. In a number of cases, the Chinese sales of items such as ventilators, which under the pressure of time was often provided under special, accelerated acquisition procedures, led to problems that created bad press for the PRC. A purchase of 324 ventilators by the Bolivian ministry of health, for example, became the focus of public attention over both the poor performance of the ventilators themselves and corruption in the contracting.13 In the early stages of Covid-19, Chinese companies also sought to combine the PRC “health silk road” and prior “digital silk road” concept to advance Chinese technology sales in Latin America and elsewhere to combat the pandemic. These initiatives included a range of offerings from telemedicine to surveillance cameras for temperature monitoring, to the use of electronic devices to track and maintain separation from persons infected by Covid-19.14 The use of medical devices to identify those with Covid in the proximity of someone, seen in some western societies as an invasion of personal privacy, although more accepted in the PRC, was one of the Chinese technologies advanced in this regard. In Bolivia, for example, the Chinese, in conjunction with the Bolivian government, leveraged the pre-existing surveillance system BOL-110, to monitor and disseminate information on persons known to be infected by obliging them to wear an electronic device tracked by the Chinese-installed system.15 In a similar manner, the PRC used donations in conjunction with combatting the pandemic to export health-related components of its surveillance architectures to the region. In Panama, for example, in May 2020, the Chinese donated a system with Hikvision heat-sensing cameras for detecting persons with fevers, installing them in the Tocumen International Airport, the Ministry of Public Security, the Health Ministry, and the Office of the First Lady.16 In Argentina, similarly, the Chinese provided Huawei thermal imaging cameras for the international airport and bus stations.17

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China’s deployment of its vaccines to Latin America and other parts of the world kicked off the second phase of its Covid-19 diplomacy, very different in its effect from the first. China’s previous ability to control the virus at home and its ability to ramp up production of vaccines and its associated components allowed PRC-based companies such as Sinopharm, Sinovac, and CanSino to export significant quantities of its own vaccines to Latin America and the Caribbean, among other destinations, at a time when the ability of those countries to get Western vaccines through contractual mechanisms or the international vaccine facility COVAX was very limited. Even Brazil’s President Jair Bolsonaro, often a China skeptic, called China’s support to Brazil through the vaccine “essential” to the country’s management of the pandemic.18 The ability of PRC-based companies to export its vaccines to the region early and in significant quantities was facilitated by their prior arrangements to conduct Phase III trials for those vaccines in several Latin American countries. Sinovac, for example, performed Phase III trials on its vaccines in Brazil,19 Peru,20 Mexico, and Argentina,21 with associated agreements for local production.22 Many of the early supply arrangements by Chinese companies in Latin America were products of these relationships. The February 2021 agreement by Argentine President Alberto Fernandez to buy 30 million doses of Sinovac vaccine for that country23 was one such example. Despite such advantages, the PRC-based companies Sinovac, Sinopharm, and CanSino generally used more traditional technologies for developing the vaccine, rather than the new gene editing techniques being employed by their Western counterparts. As a result, in the end, the Chinese vaccines were not as effective, particularly in the later stages of the pandemic when problematic mutations like the delta variant began to emerge in Latin America and the Caribbean. The Sinovac vaccine, the most widely available in Latin America of the three Chinese vaccines, had a two-dose efficacy for stopping serious illness of only 50.3%, barely meeting the minimum threshold established by the World Health Organization for acceptance of a vaccine.24 According to studies done in Chile, Sinovac’s efficacy against any infection, after only the first dose, was as low as 3%.25 As a result, countries such as Chile, which had bet both on western vaccines and PRC-made ones but initially could only get limited quantities of the better western vaccines, were forced to primarily use the Chinese ones in their vaccination campaign. As a consequence, inoculation by the Chinese vaccines had only a limited effect in stopping the spread of the

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virus and, to an extent, may have been counterproductive to the extent it made those vaccinated feel more protected against contagion than they actually were. Although Chile led the region in its high vaccination rate, because some three-fourths of the vaccines given there were Chinese, the pandemic continued to spread there. Similarly, a study on the continued advance of Covid-19 in Colombia, despite that country’s high vaccination rate, identified reliance on Chinese vaccine as a contributing factor.26 As with its other medical diplomacy, the Chinese sought to use the region’s desperation for the vaccine for business advantage. On one hand, whereas the United States initially pledged $4 billion in donations to the international COVAX facility, for which it received very little recognition in the region, the PRC did not donate to COVAX at all, but rather, sold the majority of its vaccines to the region in business transactions with individual governments. In the same way that the PRC attempted to use loans from its policy banks, tied to work for its companies, to advance its infrastructure construction business in the region, China initially sought to establish a $1 billion fund through which the countries of Latin America could buy exclusively PRC-made vaccines.27 Even in Brazil, with its strong access to capital markets, the PRC loaned the country $1 billion through the BRICS “New Development Bank” in February 2021 to buy Chinese vaccines.28 Beyond using financing to sell their own product, the PRC also used their official diplomacy to take credit for its vaccine sales to the region wherever possible, as if they were donations.29 In countries such as El Salvador30 and Bolivia,31 Chinese vaccines arriving at the airport tarmac were met by the Chinese ambassador, often accompanied by the president or other senior officials of the recipient nation, as boxes of vaccine rolled off the aircraft, generally with visible Chinese markings, and sometimes even Chinese flags on the containers carrying them. As the virus continued to spread throughout Latin America and the region’s governments became increasingly desperate for expanded access to vaccines, China began to leverage that need to pursue objectives in other commercial and strategic areas. The pro-US governments of Jair Bolsonaro in Brazil, and Luis Abinader in the Dominican Republic, for example, both reversed prior public commitments to exclude Chinese companies such as Huawei from their respective nation’s 5G telecommunications infrastructure, in exchange for expedited access to Chinese vaccines.

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In the case of Brazil, a delegation that went to the PRC to seek expanded access to the Chinese vaccines was told that such access would be facilitated by Brazil not excluding Huawei.32 In a similar fashion, the pro-US administration of Luis Abinader in the Dominican Republic, in November 2020, had publicly proclaimed that his country, a friend to the United States, would never allow untrusted Chinese companies into strategically sensitive areas such as port infrastructure or 5G.33 Nonetheless, shortly after receiving more than one million doses of Chinese vaccines, the Dominican Republic government quietly reversed its exclusion of Huawei from a scheduled 5G auction.34 Beyond telecommunications, China has also leveraged the region’s need for its vaccine to attempt to advance its noncommercial strategic interests in the region. In April 2021, the Paraguayan government of Mario Abdo Benitez and the Republic of Taiwan China openly complained that the PRC, working through PRC allies in the Paraguayan Senate, had suggested that Paraguay would more easily get access to Chinese vaccines if the country were to diplomatically recognize the PRC.35 In a similar fashion, in May 2021, the Honduran government of Juan Orlando of Hernandez proclaimed his willingness to set up a commercial office in the PRC if doing so would help Honduras to get more expedited access to Chinese vaccines.36 Despite such dynamics, by late 2021, the relatively low efficacy of Chinese vaccines, and the arrival of more effective Western vaccines with the help of the United States, had begun to change the dynamics of China’s vaccine diplomacy. By October 2021, over 40  million doses of vaccine from the United States had arrived in Latin America and the Caribbean, representing a third of all vaccines provided by the United States to the world. The administration’s collective pledges of 580 million doses worldwide suggested that much more was en route to the region.37 The combination of the arrival of more effective Western vaccines and increasing overall vaccine rates had brought Covid-19 infection rates down notably across the region.38 Brazil, despite its previous reversal on 5G, actively moved away from the use of Chinese vaccines in favor of Western ones.39 As shown in the previous examples, the early phases of China’s Covid-19 medical diplomacy bore mixed results due to the balance between the need of the recipients on one hand, and the problems with the Chinese supplies and the self-serving nature of many of the Chinese acts on the other. Despite the ambiguous impacts of China’s early Covid-19

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diplomacy with the region per se, the ability of the PRC to control Covid-19 in China itself, and to get its own economy growing again and generating demand from, and investment for the region, had a notably positive effect. In terms of global image, while the disease seemed to spiral out of control in the United States and Europe, compounded by political conflicts in the United States over social distancing, mask wearing, and later vaccines, the PRC seemed to act decisively, responding to even limited disease outbreaks in different parts of China with severe restrictions, ultimately limiting the spread of the virus. As a consequence, within months of the initial outbreak of the virus in the PRC, its spread was largely limited there, and the country became the only major economy to show positive growth in 2020, expanding on net 2.3% for the year.40 The most severe economic impact of the pandemic foremost, and prior to Chinese crises in its real estate and energy sectors, was on track to grow 8.1% in 2021.41 China’s ability to control the pandemic and its economic effects, while the more open, democratic societies, such as the United States and the countries of Europe, were struggling to do so, sent a strong message to many in Latin America whose attitudes about the ability of democracy and free markets to solve their own problems were ambiguous. For a Latin America beset by deepening health, economic, and societal difficulties, China’s example suggested the power of a well-managed authoritarian government to better protect the fundamental health, economic, and security needs of its citizens than democratic ones, even if doing so came at the price of ceding individual rights, and the liberty of expression. China’s medical and vaccine diplomacy, although initiated through its response to Covid-19, has become an ongoing part of its engagement with the region. The PRC dedicated an entire section of the 2022–2024 China-CELAC plan to such cooperation, including the production of vaccines by Chinese entities in Latin American countries, medical research and development, and other forms of anti-epidemic cooperation.42 Covid-19 has reinforced to China the importance of biomedical technologies such as gene editing, and the PRC government and its companies are making a significant effort to close the gap with the West in this area.43

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Increased Importance of China as a Source of Demand Beyond the mixed effects of its medical diplomacy, China’s strong economic performance relative to the United States, Europe and other parts of the world since the pandemic has increased its leverage in Latin America and the Caribbean as an important source of demand for the region’s products, particularly its commodities and foodstuffs. In 2020, the PRC accounted for 13% of the exports of Latin America and the Caribbean as a whole. While significant, demand from China was even more important for particular countries, and sectors. In 2020, for example, PRC-based companies purchased 29.7% of Peru’s exports and 38.9% of those of Chile.44 In the minerals sector, demand from China, which purchases half of all copper worldwide,45 helped to push prices for the metal to near record levels by the end of 2021, strongly benefiting Chile, for which copper is the country’s major export and for which half of that exported copper goes to the PRC.46 In Argentina, by 2020, the PRC had become the export destination for 75% of the country’s beef, making it one of that country’s key sources of Argentine hard currency earnings.47 As noted previously, thanks to the impact of swine flu on China’s pig herd, by 2021, Argentina was exporting 80% of its pork to the PRC, although a sharp temporary drop in Chinese demand and associated prices at the end of the year sent a reminder to Argentina of its vulnerability to fluctuations in Chinese demand.48 In Brazil, thanks to strong demand from China complemented by lackluster demand from the United States and Europe, the nation’s overall exports to the PRC by January 2021 were 19.4% higher than the year earlier, while Brazil’s exports to the European Union shrunk by 5.6% during the period.49 In soy alone, China accounts for 73% of Brazil’s exports. In Ecuador, exports of shrimp to the PRC have more than tripled since 2018, making the PRC the destination for almost 55% of the country’s shrimp exports.50 In El Salvador, where sugar is the nation’s most important export, 18% of the nation’s exports of goods go to the PRC.51 In the same way that China’s medical and vaccine diplomacy gave it an important source of leverage due to the region’s health needs, the PRC as a source of demand for the region’s export products, in the context of weaker-than-normal demand from other customers due to the pandemic,

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gives the PRC a significant and growing source of leverage over those countries. This leverage operates just as it also affords PRC-based companies options to expand its economic position in sectors where its competitors are hobbled due to the pandemic.

Increased Need for Chinese Loans and Investments The devastating impact of the prolonged fight against Covid-19 on the fiscal balances of Latin America’s countries52 has given the PRC and its SOEs and financial institutions an important source of leverage as a provider of loans and needed investments for the region. The IMF estimates that gross debt as a fraction of GDP for the emerging market countries of Latin America jumped by almost 10 percentage points from 68.4% of GDP in 2019 to 77.7% of GDP in 2020, following the first year of the crisis.53 For low-income countries in the region, the jump in gross debt was from 38.6% of GDP in 2019 to 41.4% over the same short period.54 The dramatic change in government fiscal balances in the region can be understood as a combination of adverse impacts on both their expenditures and revenues. On one hand, during the pandemic, sources of income for governments in the region fell off dramatically. This included declines in tax revenues as businesses were shuttered, as well as lost income from exports of products to external markets both in the region, and beyond it, including major extra-regional sources of demand such as the United States and Europe. Sales and associated tax revenues were impeded not only by the temporary closing of borders but also by the falloff in economic activity due to the pandemic. According to the IMF, for emerging market of Latin American countries, government revenues overall fell from 27.2% of GDP in 2019 to 25.8% of GDP in 2020.55 For low-income countries in the region, revenues dropped from 21.5% of GDP in 2019 to 19.7% in 2020.56 On the spending side, Covid-19 greatly elevated the outlays of Latin American governments. For the region overall, expenditures grew for emerging market Latin American countries from 31.6% of GDP in 2019 to 34.3% in 2020.57 For developing countries in the region, they expanded from 21.8% of GDP in 2019 to 23.3% of GDP in 2020.58 Such increases included government purchases of goods and services directly related to the pandemic, including masks, ventilators, tests, oxygen, and later vaccines, as well as expenditures for establishing temporary hospitals and

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taking other actions to bolster the healthcare system. The pandemic also obliged additional outlays for public services from security workers to sanitary measures, as well as driving significant spending to meet the needs of vulnerable populations who were prevented from working during the region’s shutdowns of businesses and public spaces. Government responses to the economic needs of those impacted by Covid-19 varied across the region, including compensatory payments in some countries,59 as well as the purchase and distribution of packages of food and other supplies for those in greatest needs.60 As the region seeks to move beyond Covid-19, it will continue to face an accumulated debt of social spending to take care of persons who have been pushed out of the middle class, or who have permanently lost their jobs. It will also likely need to increase public security spending to address the expansion in crime, and other accumulated needs. The actions of multiple governments in the region during 2021 highlight the grave fiscal constraints that they were and continue to be under. Peru61 and Chile62 both authorized citizens to make multiple withdrawals from their pension funds, because both governments lacked the resources to pay social needs directly from government revenues. These withdraws, however, will create hardships for retirees in the future and likely demand for supplemental pension spending to cover those who were forced to withdraw their own money. With respect to government revenue policy, both Costa Rica and Colombia were obliged during the pandemic to increase taxes and revise their tax code, leading to significant social protest in both. In Costa Rica, the government’s attempt in October 2020 to increase revenues, in part to compensate for increased Covid-19 spending, unleashed nationwide indignation and protests.63 In Colombia, similarly, protests that originally began in May 2021 over tax increases and tax reforms turned into violent strikes across the country, shutting down parts of the Colombian economy.64 In the context of the region’s grave fiscal needs and limited political room to maneuver, the PRC and its companies becomes more attractive as a source of loans, investments, and export revenue for regimes in need, temporarily circumventing pressures on them to increase taxes or implement austerity measures. Given the interplay between Covid-19, economic and financial need, and political receptivity, the proximity of Mexico to the United States and its close integration with the US economy makes it partner of particular

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strategic interest in this regard. In Mexico, in the context of significant pressures on the economy from the pandemic, the leftist populist government of Andres Manuel Lopez Obrador (AMLO) has adopted policies that have decreased the willingness of Western governments and private investors to invest money in the country.65 Such policies include reliance on the debt-ridden and inefficient national oil company Pemex, which is rapidly losing money, as the principal vehicle to develop the country’s oil sector.66 It similarly includes giving priority to the public Federal Electricity Commission (CFE), over private investment,67 to develop the Mexican electricity sector.68 In public infrastructure, AMLO’s regeneration of the Mexican economy is built around a number of troubled signature projects, including the Saint Lucia airport69 and the Maya tourist train. Although AMLO has traditionally looked to the PRC with distrust, Chinese companies have long played an important and currently increasing role in the Mexican economy, including in projects at the center of his economic agenda. For example, the PRC is the key financing source for the giant and economically questionable Dos Bocas refinery, having committed $600 million in investment in the project’s first phase.70 As Pemex seeks to take other projects forward with a debt load that inhibits access to foreign financing, it is likely that the PRC could extend a version of the $5 billion loan offer it made to PEMEX in 2014 to provide a loan to the company to fund its expansion in exchange for future oil.71 Such a loan would not be without precedent. Chinese banks loaned $20 billion in two installments to the Brazilian national oil company Petrobras beginning in 2009, opening the Brazilian oil sector and Petrobras to Chinese investment and partnerships in that case. In the electricity sector, China appears similarly poised to expand, leveraging its strategic position and Mexico’s need. China’s Southern Power Industry Corporation (SPIC) believed they had a business case to invest substantially to acquire Zuma energy in May 2020,72 at a time when many other investors, discouraged by AMLO’s favoritism to CFE for electricity projects, are pulling out of the sector.

An Increased Array of Leftist Populist Governments Receptive to China As argued in Chap. 7, and earlier in this section, the ongoing political shift in Latin America and the Caribbean toward authoritarian leftist populist governments increases the openness of those governments toward

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working with the PRC and their fiscal and political need to do so. Leftist populist governments from Venezuela to Argentina and Peru are facing grave fiscal challenges. Covid-19 has contributed to this trend, with the turn to the populist left in Peru, adding to the consolidation of leftist populist regimes in Venezuela, Nicaragua, Cuba, Bolivia, Argentina, and Mexico. As this book went to press, the victory of leftist populist Xiomara Castro in Honduras, Gabriel Boric in Chile, and the lead of leftist candidates in the polls for elections in Brazil and Colombia, and the prospect that the Center-right government of Guillermo Lasso in Ecuador could fall, raises the prospects of a significantly expanded array of states in the region both in need of and receptive to economic cooperation with the PRC.

China’s Advancing Presence on the Ground Through Acquisitions In a manner similar to the expansion of the presence on the ground by PRC companies after the global economic crisis of 2007–2008,73 the current pandemic sets the stage for a possible new wave of mergers and acquisitions that dramatically advance the presence of PRC-based companies in the region as it recovers from the Covid-19 pandemic. As global economic conditions stabilize following the pandemic in 2022, the efforts of Western companies to strengthen their balance sheets may lead them to sell off assets in poorly performing markets such as Latin America, in order to pursue more attractive opportunities closer to home, or in the more dynamic markets of Asia. As they divest their Latin American assets, or raise capital by bringing in foreign partners, relatively strong and well-financed Chinese companies will be in a good position to acquire or invest in undervalued assets. Targets for Chinese mergers and acquisitions will likely concentrate in sectors strategically prioritized by the PRC, such as commodities and foodstuffs on the supply side, as well as high value-­ added sectors with strategic technologies on the market side, such as telecommunications, manufacturing, robotics, and artificial intelligence.74 Indeed, a number of sales of Latin American assets to the Chinese by Western companies in 2020 and 2021 suggest that the process has already begun.75

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Challenges for China in the Region As China expands its position in Latin America and the Caribbean, driven by the logic discussed in this chapter, also occurred with its prior expansion after 2010, that expansion is likely to be accompanied by significant conflict for PRC-based companies, and accompanying challenges and dilemmas for the Chinese government. During the post-2010 period, the increased presence of Chinese companies on the ground in Latin America and the Caribbean was accompanied by expanded protests, difficult relations with laborers and subcontractors, frictions with environmentalists, competitors, local laborers who were not hired, and communities affected by its projects, among others. As noted in Chap. 8, those frictions included the takeover of Chinese worksites, such as Tarapoa Ecuador in 2006, the kidnapping of Chinese workers, violent protests such as those in the Las Bambas and Rio Blanco mining sites in Peru, and a range of other problems. In the post-pandemic period, the challenges for Chinese companies will likely be worse. On one hand, as noted previously, the coming post-­ pandemic expansion is likely to be as great or greater than in the post-2010 period. The level of crime and insecurity and public mobilization in the post-pandemic period, however, will be far greater. The challenging dynamics of the region will be compounded, in some countries, by perceptions of China’s role in causing the pandemic, through its suppression of data regarding the pandemic’s spread,76 and possibly even the role of the Wuhan Virology Lab,77 will compound mistrust toward the Chinese in ways not seen during the more neutral 2008 period. Similarly, China will be realizing its post-Covid-19 advance in the context of a United States which is now far more attentive to that advance. The United States also now has a decade of practice in how and where to push back against it, the less confrontational posture of the Biden administration nonwithstanding. Meanwhile, as discussed previously, the expanded number of leftist populist regimes makes likely that China will find a greater number of partners willing to engage with it in spheres troubling to the United States and its more conservative partners in the region, including in spheres such as military and technology cooperation that raise red flags for the United States. Moreover, those US partners, surrounded by an expanded array of leftist populist states and seeking to motivate the United States to align itself with their security, will have greater incentives to cast China’s activities in the region in anti-­US terms.

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As in the post-2010 period, the PRC presence on the ground will also afford Chinese companies opportunities to learn more rapidly how to more effectively manage their relations with local labor forces, governments, and communities. Particularly the biggest Chinese national-level SOEs will also have resources and access to financing and state support to acquire the knowledge, tools, and to an extent buy goodwill to address such challenges. Such options may include buying companies with knowledge of particular parts of the region and contracting consultants, as well as becoming more astute regarding good choices among local partners. Those companies will also continue to have options for simply buying off local officials, competitors, communities, and labor leaders through both corruption and philanthropy. Overall, as the PRC works to balance its commercial interests in the region with its broader strategic objectives, it will likely struggle, and sometimes stumble, in finding the right balance between using its influence to buy good treatment for its companies and nationals and intimidating critics into silence, while not overplaying its hand in ways that alarm and mobilize political and business actors, and other countries to see China as a threat and more effectively collaborate to resist it. Whatever the outcome, the question of the relationship of Chinese companies to the communities, laborers, and governments where they operate will likely increase in importance as a factor in the political dynamics of many parts of the region, with the PRC seen as a savior by some, and a threat by others, even to a greater degree than today.

Notes 1. See R. Evan Ellis, “Covid-19 acelerará avance de China en un mundo más desconfiado: Proyecciones para América Latina,” RedCaem, June 1, 2020, http://chinayamericalatina.com/covid-­19-­acelerara-­avance-­de-­china-­en-­ un-­mundo-­mas-­desconfiado-­perspectivas-­para-­america-­latina/. 2. Christopher Kambhu, “China in Latin America: Exaggerating Medical Diplomacy” 1, AULA Blog, November 23, 2021, https://aulablog. net/2021/11/23/china-­i n-­l atin-­a merica-­e xaggerating-­m edical­diplomacy/. 3. “China’s Medical Outreach in LAC: Facts and Features,” Interamerican Dialogue, May 22, 2020, https://www.thedialogue.org/blogs/2020/05/ chinas-­medical-­outreach-­in-­lac-­facts-­and-­features/. 4. “Minister Ribera receives donations of medical supplies managed by the Chilean Embassy in China,” Ministry of Foreign Affairs of Chile, official

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website, May 14, 2020, https://minrel.gob.cl/minrel/news/ minister-­ribera-­receives-­donations-­of-­medical-­supplies-­managed-­by-­the. 5. Ellis, “Uruguay exemplifies how to deal with China,” 2021. 6. Ellis, “Chinese Engagement with the Dominican Republic—An Update,” 2021. 7. “China offers aid to Brazilian state Amazonas to overcome health crisis,” ECNS, January 25, 2021, http://www.ecns.cn/news/ politics/2021-­01-­25/detail-­ihafywhr7619518.shtml. 8. “Xinhua Headlines: How Belt and Road helps global recovery amid COVID-19 pandemic,” Xinhua, August 31, 2020, http://www.xinhuanet.com/english/2020-­08/31/c_139331681.htm. 9. Hussein Askary, “China Unleashes Health Silk Road,” Brix, March 21, 2020, https://www.brixsweden.org/china-­unleashes-­the-­health-­silk­road-­against-­corona-­pandemic/. 10. “Embajador chino subraya solidaridad en entrega de donaciones para enfrentar COVID-19 en Panamá,” Xinhua, April 3, 2020, http://spanish.xinhuanet.com/2020-­04/03/c_138943562.htm. 11. Ellis, “China’s Advance in Panama: An Update,” 2021. 12. Ernesto Cabral and Oscar Castillo, “Covid-19: Perú compró pruebas rápidas sin certificación de autoridad china,” Ojo Publico, April 20, 2020, https://ojo-­publico.com/1768/covid-­19-­peru-­compro-­test-­rapidos-­ sin-­certificacion-­china. 13. “Los respiradores chinos que llegaron a Bolivia para combatir el coronavirus no funcionan bien y hay denuncias de corrupción,” Infobae, August 27, 2020, https://www.infobae.com/america/america-­latina/2020/08/27/ los-­r espiradores-­c hinos-­q ue-­l legaron-­a -­b olivia-­p ara-­c ombatir-­e l-­ coronavirus-­no-­funcionan-­bien-­y-­hay-­denuncias-­de-­corrupcion/. 14. Joel Gehrke, “US fears Huawei coronavirus health tools are subterfuge for China to gather data on people,” The Washington Examiner, April 12, 2020, https://www.washingtonexaminer.com/policy/defense-­national-­ security/us-­fears-­huawei-­coronavirus-­health-­tools-­are-­subterfuge-­for-­ china-­to-­gather-­data-­on-­people. 15. “La Paz: Aprueban uso de tobilleras eléctricas para sospechosos de coronavirus,” Erbol, April 9, 2020, https://www.erbol.com.bo/nacional/ la-­paz-­aprueban-­uso-­de-­tobilleras-­el%C3%A9ctricas-­para-­sospechosos-­de-­ coronavirus. 16. Ellis, “China’s Advance in Panama: An Update,” 2021. 17. Ellis, “Punto por punto, todos los tentáculos de las cada vez más profundas relaciones entre Argentina y China,” 2021. 18. “Brazilian President Praises Partnership with China and India,” China-­ Lusophone Brief, September 10, 2021, https://www.clbrief.com/ brazilian-­president-­praises-­partnership-­with-­china-­and-­india/.

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19. “Sinovac: Brazil results show Chinese vaccine 50.4% effective,” BBC News, January 13, 2021, https://www.bbc.com/news/ world-­latin-­america-­55642648. 20. “Wang Yi hails Peru’s decision to test Chinese vaccine in phase 3 trial,” CGTN, November 6, 2020, https://news.cgtn.com/news/2020-­11-­06/ Wang-­Yi-­hails-­Peru-­sdecision-­to-­test-­Chinese-­vaccine-­in-­phase-­3-­trial-­ VbJStPV2Tu/index.html. 21. “Argentina joins Chinese coronavirus vaccine trial, maker says,” Reuters, August 22, 2020, https://www.reuters.com/article/us-­health-­ coronavirus-­v accinesinopharm/argentina-­j oins-­c hinese-­c oronavirus-­ vaccine-­trial-­maker-­saysidUSKBN25I0CZ. 22. “El presidente chino le ofreció a Fernández colaboración para desarrollar la vacuna,” La Prensa, January 5, 2021, http://www.laprensa.com. ar/497642-­El-­presidente-­chino-­le-­ofrecio-­a-­Fernandez-­colaboracion-­ para-­desarrollar-­la-­vacuna.note.aspx. 23. Roman Lejtman, “Alberto Fernández firmará en las próximas horas un acuerdo con Xi Jinping por 30 millones de dosis de la vacuna contra el COVID-19 de Sinopharm,” InfoBae, February 2, 2021, https://www. infobae.com/politica/2021/02/02/alberto-­fernandez-­firmara-­en-­las-­ proximas-­horas-­un-­acuerdo-­con-­xi-­jinping-­por-­30-­millones-­de-­dosis-­de-­ la-­vacuna-­contra-­el-­covid-­19-­de-­sinopharm/. 24. “Sinovac: Brazil results show Chinese vaccine 50.4% effective,” 2021. 25. Samantha Pearson, Luciana Magalhaes and Chao Deng, “Chinese Covid-19 Vaccine Far Less Effective Than Initially Touted in Brazil,” The Wall Street Journal, January 12, 2021, https://www.wsj.com/articles/ c h i n a s -­s i n o v a c -­c o v i d -­1 9 -­v a c c i n e -­i s -­5 0 -­4 -­i n -­l a t e s t a g e -­b r a z i l -­ trials-­11610470581. 26. M. Shultz, Ryan C. Berg, Oscar Alberto Bernal Acevedo, Jovana Alexandra Ocampo Cañas, Victoria A. Pinilla Escobar, Omar Muñoz Zelde Espinel, and José Miguel Uribe-Restrepo, “Complex correlates of Colombia’s COVID-19 surge,” The Lancet Regional Health—America, Volume 3, November 2021, https://www.sciencedirect.com/science/article/pii/ S2667193X21000685. 27. Karol Suarez, “China offers $1 billion loan to Latin America and the Caribbean for access to its Covid-19 vaccine,” CNN, July 23, 2020, https://www.cnn.com/2020/07/23/americas/china-­billion-­vaccine-­ latin-­americacoronavirus-­intl/index.ht. 28. “Brazil Gets USD 1 billion From BRICS Bank to Fight Coronavirus,” China-Lusophone Brief, February 15, 2021, https://www.clbrief.com/ brazil-­gets-­usd-­1-­billion-­from-­brics-­bank-­to-­fight-­coronavirus/. 29. Ellis, “A Race Against Time: Deploying Vaccines,” 2021.

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30. “El Salvador President thanks China for CoronaVac vaccine donation,” Prensa Latina, April 7, 2021, https://www.plenglish.com/index. php?o=rn&id=66076&SEO=el-­s alvadorpresident-­t hanks-­c hina-­f or-­ coronavac-­vaccine-­donation. 31. “China’s Sinopharm vaccine arrives in Bolivia,” 2021. 32. “Brazil Needs Vaccines. China Is Benefiting,” The New York Times, March 15, 2021, https://www.nytimes.com/2021/03/15/world/americas/ brazil-­vaccine-­china.html. 33. “Huawei the Dominican gov. snubs China, embraces US,” Dominican Today, November 18, 2020, https://dominicantoday.com/dr/economy/2020/11/18/huawei-­t he-­d ominican-­g ov­snubs-­china-­embraces-­us/. 34. For more details, see Ellis, “Chinese Engagement with the Dominican Republic—An Update,” 2021. 35. “Paraguay leader rejects China’s vaccine strategy,” Taipei Times, April 22, 2021, https://www.taipeitimes.com/News/taiwan/archi ves/2021/04/22/2003756151. 36. Christopher Woody, “In race for vaccines, US neighbors see chance to play Washington and Beijing against each other,” Yahoo News, May 17, 2021, h t t p s : / / n e w s . y a h o o . c o m / r a c e -­v a c c i n e s -­u s -­n e i g h b o r s -­ see-­192554164.html. 37. Chase Harrison, “Tracker: U.S.  Vaccine Donations to Latin America,” Americas Society, October 21, 2021, https://www.as-­coa.org/articles/ tracker-­us-­vaccine-­donations-­latin-­america. 38. “Covid Ravaged South America. Then Came a Sharp Drop in Infections,” The New  York Times, September 5, 2021, https://www.nytimes. com/2021/09/05/world/americas/covid-­s outh-­a merica-­r eprieve-­ vaccines.html. 39. Luciana Magalhaes and Samantha Pearson, “Brazil Moves Away From Chinese Covid-19 Vaccine,” The Wall Street Journal, September 12, 2021, h t t p s : / / w w w. w s j . c o m / l i v e c o v e r a g e / c o v i d -­1 9 -­d e l t a -­v a r i a n t -­ vaccine-­2021-­09-­10/card/bLUwC5RlEDHmAelEbfer. 40. “China’s economy grows 18.3% in post-Covid comeback,” BBC News, April 16, 2021, https://www.bbc.com/news/business-­56768663. 41. “IMF projects China’s economy to grow 8.1% in 2021,” 2021. 42. “CHINA—CELAC JOINT ACTION PLAN FOR COOPERATION IN KEY AREAS (2022–2024),” Ministry of Foreign Affairs of the People’s Republic of China, December 7, 2021, https://www.fmprc.gov.cn/mfa_ eng/wjb_663304/zzjg_663340/ldmzs_664952/ xwlb_664954/202112/t20211207_10463459.html. 43. Graham Allison, Kevin Klyman, Karina Barbesino, and Hugo Ye, The Great Tech Rivalry: China vs the U.S., Harvard University, December 2021,

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h t t p s : / / w w w. b e l f e r c e n t e r. o r g / p u b l i c a t i o n / great-­rivalry-­china-­vs-­us-­21st-­century. 44. “Direction of Trade Statistics,” 2021. 45. “The Importance of Copper in China’s Economy,” Reuters, September 21, 2020, https://www.reuters.com/article/sponsored/ copper-­in-­chinas-­economy. 46. Ellis, “Chinese Advances in Chile,” 2021. 47. “Seven Argentine meat plants suspend exports to China over COVID-19 worries,” Reuters, August 13, 2020, https://www.reuters.com/article/ us-­health-­coronavirus-­argentina-­beef-­idUSKCN2592VH. 48. “Argentine pork meat exports fall 80% in third quarter of 2021, study shows,” MercoPress, October 18, 2021, https://en.mercopress. com/2021/10/18/argentine-­p ork-­m eat-­e xports-­f all-­8 0-­i n-­t hird-­ quarter-­of-­2021-­study-­shows. 49. “Brazil records record trade deficit in January,” Latin News, February 2, 2021, https://www.latinnews.com/index.php?option=com_k2&view=ite m&Itemid=6&id=87272&full=true&uid=60047&acc=1& cat_id=824617#article87271. 50. Christian Molinari, “With coronavirus-extended New Year holiday declared over, Ecuador hopes shrimp exports to China rebound,” Seafood Source, February 13, 2020, https://www.seafoodsource.com/news/ supply-­trade/with-­coronavirus-­extended-­new-­year-­holiday-­declared-­over-­ ecuador-­hopes-­shrimp-­exports-­to-­china-­rebound. 51. Alejandra Cuéllar and Esther Honig, “Sugar strengthens its dominance in agriculture in El Salvador,” Dialogo Chino, June 24, 2020, https://dialogochino.net/en/agriculture/36071-­sugar-­strengthens-­its-­dominance-­ in-­agriculture-­in-­el-­salvador/. 52. See, for example, David A.  Wemer, “IDB president warns of a looming COVID debt crisis in Latin America, but also highlights opportunities,” The Atlantic Council, September 14, 2020, https://www.atlanticcouncil.org/blogs/new-­atlanticist/idb-­president-­warns-­of-­a-­looming-­covid-­ debt-­crisis-­in-­latin-­america-­but-­also-­highlights-­opportunities/. 53. “Table A15. Emerging Market and Middle-Income Economies: General Government Gross Debt, 2012–26,” IMF Fiscal Monitor, April 2021, https://www.imf.org/en/Publications/FM/Issues/2021/03/29/ fiscal-­monitor-­april-­2021, p. 81. 54. “Table A21. Low-Income Developing Countries: General Government Gross Debt, 2012–26,” IMF Fiscal Monitor, April 2021, https://www. imf.org/en/Publications/FM/Issues/2021/03/29/fiscal-­m onitor-­ april-­2021,p. 87. 55. “Table A13. Emerging Market and Middle-Income Economies: General Government Revenue, 2012–26,” IMF Fiscal Monitor, April 2021,

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https://www.imf.org/en/Publications/FM/Issues/2021/03/29/ fiscal-­monitor-­april-­2021, p. 79. 56. “Table A19. Low-Income Developing Countries: General Government Revenue, 2012–26,” IMF Fiscal Monitor, April 2021, https://www.imf. org/en/Publications/FM/Issues/2021/03/29/fiscal-­m onitor-­ april-­2021, p. 85. 57. “Table A14. Emerging Market and Middle-Income Economies: General Government Expenditure, 2012–26,” IMF Fiscal Monitor, April 2021, https://www.imf.org/en/Publications/FM/Issues/2021/03/29/ fiscal-­monitor-­april-­2021, p. 80. 58. “Table A20. Low-Income Developing Countries: General Government Expenditure, 2012–26,” IMF Fiscal Monitor, April 2021, https://www. imf.org/en/Publications/FM/Issues/2021/03/29/fiscal-­m onitor-­ april-­2021, p. 86. 59. See, for example, Marisa Wanzeller, Simone Iglesias and Martha Beck, “Guedes Cites ‘Waiver’ for Fiscal Cap Bolsonaro Pledged to Uphold,” Bloomberg, October 21, 2021, https://www.msn.com/en-­us/money/ markets/brazil-­e 2-­8 0-­9 9s-­n ew-­a id-­p rogram-­w ill-­r espect-­f iscal-­c ap-­ bolsonaro-­says/ar-­AAPKKBx?ocid=uxbndlbing. 60. See, for example, “Panamá distribuye comida en barrios pobres por crisis del COVID-19,” France24, April 2, 2020, https://www.france24.com/ es/20200402-­panam%C3%A1-­distribuye-­comida-­en-­barrios-­pobres-­por-­ crisis-­del-­covid-­19. 61. Marco Aquino, “Peru enacts law allowing second withdrawal of funds from pension system,” Reuters, September 18, 2020, https://www. reuters.com/article/peru-­pensions-­idUSL1N2I41TV. 62. “Inflation in Chile reached 3,2% in eight months and the US dollar 794 Pesos,” Mercopress, September 11, 2021, https://en.mercopress. com/2021/09/11/inflation-­in-­chile-­reached-­3-­2-­in-­eight-­months-­and-­ the-­us-­dollar-­794-­pesos. 63. Isabella Cota, “Un intento por subir impuestos enciende la protesta social en Costa Rica,” El País, October 16, 2020, https://elpais.com/ economia/2020-­10-­16/una-­subida-­de-­impuestos-­encienda-­la-­protesta-­ social-­en-­costa-­rica.html. 64. Daniel Pardo, “Colombia: por qué el país está en un escenario sin precedentes (y qué puede significar para su futuro),” BBC News, May 5, 2021, https://www.bbc.com/mundo/noticias-­57002561. 65. “Federal government ‘hostility’ is scaring away investment: business groups,” Mexico News Daily, January 16, 2020, https://mexiconewsdaily. com/news/hostility-­is-­scaring-­away-­investment/.

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66. “Pemex’s Losses Deepen Mexico’s Financial Woes,” Stratfor, August 31, 2020, https://worldview.stratfor.com/article/pemex-­s-­losses-­deepen-­ mexico-­s-­financial-­woes. 67. See, for example, Anthony Harrup and David Luhnow, “Mexico Weighs Limits to Private Investment in Electricity,” The Wall Street Journal, October 1, 2021, https://www.wsj.com/articles/ mexico-­weighs-­limits-­to-­private-­investment-­in-­electricity-­11633124194. 68. “AMLO Aims to Renegotiate Energy Contracts Following Electric Reform,” Pulse News Mexico, March 4, 2021, https://pulsenewsmexico. com/2021/03/04/amlo-­a ims-­t o-­r enegotiate-­e nergy-­c ontracts­following-­electric-­reform/. 69. Erick Haw Meyer, “¡Proyecto de papel! Más problemas en el Aeropuerto de Santa Lucía,” Transponder 1200, April 27, 2021, https://www.trans p o n d e r 1 2 0 0 . c o m / p r o y e c t o -­d e -­p a p e l -­m a s -­p r o b l e m a s -­e n -­e l -­ aeropuerto-­de-­santa-­lucia/. 70. “China to invest $600 million USD into Mexico’s Dos Bocas refinery,” The Yucatan Times, January 14, 2020, https://www.theyucatantimes. com/2020/01/china-­t o-­i nvest-­6 00-­m illion-­u sd-­i nto-­m exicos-­ dos-­bocas-­refinery/. 71. “China To Invest Up Billions In Mexico Energy Sector,” Latin American and Caribbean Energy Program, University of Texas at Austin, official website, November 14, 2014, https://www.jsg.utexas.edu/lacp/2014/11/ china-­to-­invest-­up-­billions-­in-­mexico-­energy-­sector/. 72. Xu and Tan, 2020. 73. For a detailed description of the PRC advance following the global economic crisis of 2007–2008, see Ellis, 2014. 74. “Latin America Emerges as China’s Favorite Hunting Ground for M&A,” Bloomberg, December 27, 2020, h t t p s : / / w w w. b l o o m b e r g . c o m / n e w s / a r t i c l e s / 2 0 2 0 -­1 2 -­2 7 / latin-­america-­emerges-­as-­china-­s-­favorite-­hunting-­ground-­for-­m-­a. 75. “China pone en la mira a América Latina para fusiones y adquisiciones de empresas,” Expansion, December 29, 2020, https://expansion.mx/econ o m i a / 2 0 2 0 / 1 2 / 2 9 / c h i n a -­l a -­m i r a -­a m e r i c a -­l a t i n a -­f u s i o n e s ­adquisiciones-­empresas. 76. Katherine Fung, “China Is Suppressing Research on COVID Origins on Xi Jinping’s Orders, Documents Show,” Newsweek, December 30, 2020, https://www.newsweek.com/china-­suppressing-­research-­covid-­origins-­xi­jinpings-­orders-­documents-­show-­1558068. 77. “Un informe vincula a la viróloga de Wuhan que investigaba los coronavirus de murciélagos con científicos militares chinos,” Infobae, June 30, 2021, https://www.infobae.com/america/mundo/2021/06/30/ un-­i nforme-­v incula-­a -­l a-­v irologa-­d e-­w uhan-­q ue-­i nvestigaba-­l os-­ coronavirus-­de-­murcielagos-­con-­cientificos-­militares-­chinos/.

CHAPTER 10

Why Does It Matter and What to Do

Overview China’s growing presence and associated influence in Latin America and the Caribbean is transforming the economic, political, security, and social dynamics of the region with which the United States is most closely connected through commerce, geography, and family. The continuing advance by the PRC, its companies and other entities will impact the commercial structure of the region, including who makes decisions about a range of economic activities key to its prosperity and social and political dynamics. These include changes in ownership, who makes decisions, and who benefits in sectors from mining and petroleum to agriculture, to manufacturing, telecommunications, logistics, finance, and e-commerce, among others. As Raul Bernal-Meza puts it, China-­ Latin America trade relations “are clearly core-periphery, North-South.”1 In this dynamic, as the role of China in Latin American economies grow, local elites will doubtlessly benefit from their association with Chinese partners as they own and manage an increasing share of these activities. Some residents of the region will be employed by those Chinese operations, generally under Chinese managers and technical personnel with policies and incentives, very different from those of local and Western companies, designed to benefit the bottom line of the Chinese firms, and Chinese senior leadership. Many in Latin America may find that the conditions and relative opportunities working under Chinese bosses compare © The Author(s), under exclusive license to Springer Nature Switzerland AG 2022 R. E. Ellis, China Engages Latin America, https://doi.org/10.1007/978-3-030-96049-0_10

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unfavorably to working under Western ones, or for businesses owned by their own conationals. The question of the benefits for the country and its residents from projects with Chinese firms will become an increasingly relevant topic in the region, yet solid data and open discourse on the question will be difficult to come by. As local politicians and businesspersons are ever more tied to Chinese interests in the country, politicians, the disincentives to speaking out regarding Chinese activities of concern, either in Asia or with their companies in the country, will grow. Publicly speaking out against abusive environmental or labor practices by Chinese companies, or corrupt contracts benefitting them, will become increasingly imprudent, let alone publishing or broadcasting stories about such issues for media outlets receiving advertising supplements and other support from China, and with local governments to whom that media depends, with business interests involving Chinese companies, particularly with respect to populist countries in which the position of the media in economic and regulatory terms is often fragile. The long-cherished liberties in the region to rail against corruption, social injustice, or the United States will continue to be permitted, so long as it doesn’t touch on the interests of the PRC. For those nations in the region in which populist regimes have entrenched themselves, indirectly sustained by Chinese capital in their consolidation of power, citizens, and outsiders both will increasingly lament the dissolution of democracy, rule of law and the protection of individual rights, just as they do today in Venezuela and Nicaragua, among others. The spread of such leftist populist regimes, helped by PRC-built internet and surveillance architectures and other tools, will make publicly denouncing those regimes or fighting for a change untenable, against the capacity of the state to monitor opposition, threaten their economic viability, and even liberty. As such populist authoritarian regimes spread across Latin America, questioning the flow of the country’s riches to China as a product of nontransparent government-to-government deals signed by their elites will thus be increasingly beyond question by all but a principled few. In that increasingly dystopian world, the new generation of Latin American dissident scholars, likely writing from outside of their home countries, will wrestle with the questions asked two generations ago by intellects such as Raul Prebisch and Immanuel Wallerstein, “How did the structure of economic benefit and political power come to lock us into such a disadvantageous position?” The unspoken answer will be “little-by-­ little” through thousands of small compromises made by politicians, administrators, business elites, and others, pursuing their short-term

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interests with China while dismissing the long-term consequences as merely alarmism or Great Power politics from Washington, DC. Latin America and the Caribbean have not yet arrived at this grave future. The United States, while recognizing the sovereignty of the countries of the region and their right to economic and other form of interaction, still has opportunities to shape the way in which the region engages with the PRC and other actors in constructive ways consistent with democracy, market-oriented economies, transparency, and the rule of law. The United States still has significant economic, cultural, and other influence in the region to help its residents and governments make positive choices that are in the interest of its future development, democracy, and the rights of all, as well as for the United States. US efforts to shape the evolution of the relationship in a positive, healthy direction do not, however, imply trying to prevent the region from commercial and other forms of interaction with China. The United States cannot do so, and any attempts would likely be both counterproductive, and damage the US relationship with its partners in the region. This chapter examines why China’s advance in Latin America and the Caribbean and the transformation of the region that Chinese engagement is causing matter both for the region and for the United States and its strategic position globally. It then concludes by advancing recommendations for US decision makers for an effective policy response.

Why Does It Matter? This book does not argue that the PRC is explicitly trying to undermine democracy or advance authoritarian regimes in the region, or deliberately prejudice it economically. Rather, it has argued that the sheer size of the PRC, in combination with the style of its engagement, including that of its companies and other agents, interacts with the characteristics and vulnerabilities of the region to produce very negative results as the PRC pursues its economically oriented objectives there. Such adverse consequences, as noted in the prior section, include growing structural dependency on the PRC, with Chinese companies, rather than the states or companies of the region, realizing the value added from economic activity, including extractive sectors such as mining and petroleum, agriculture, the sale to the region of goods and services, and the construction and operation of infrastructure, from roads and rail systems to ports and electrical, telecommunications, and e-commerce systems. As also noted throughout this work, PRC engagement also inadvertently contributes to the survival and spread of antidemocratic leftist

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populist regimes, as well as advancing strategic instability globally by undercutting the position of Taiwan in the region, thus moving the PRC toward seeking to forcibly take it over, potentially launching a war of global proportions. The fact that it is inadvertent may make it less malevolent but does not make the effect any less real. Each of these effects of Chinese engagement directly or indirectly has an adverse impact on the United States.2 At the commercial level, China’s displacement of the United States in other Western companies threatens the security of US-focused supply chains and US-based investors and their corporate earnings. The evolution toward a region that is more corrupt and insecure through the incubation of populist regimes potentially expands the number of refugees, as well as situations of poor governance, fueling transnational crime, terrorism, and other threats to the US homeland. The proliferation of leftist populist states through the incubating effects of Chinese commodity purchases and loans also facilitates the ability of organized crime to operate in the region, ultimately contributing to the Americans killed by drug overdoses and other criminal dynamics enabled by those networks. In the multilateral space, the incubating effect of China on increasing the number of populist governments will decrease the number of countries in the region willing to cooperate closely with the United States on broader matters through established multilateral forums such as the United Nations or Organization of American States. This will translate into decreased US leverage to advance its agenda on a broad range of topics vital to hemispheric prosperity and security, including fiscal policy, transparency, the rule of law, and human rights practices, among others. The ability of the United States to protect its companies and citizens will also diminish as the number of leftist populist states proliferates, and even beyond such states, as the region becomes relatively less dependent on US markets, and on the United States as a political and cultural reference, while becoming correspondingly more dependent on the PRC. In the security sphere, the effectiveness of US defense against those who would threaten its homeland depends in part on US access and strong working relationships with partner institutions in the region. As argued previously, China’s expanding economic and political influence in the region affects that access and willingness of partners in the region to cooperate with the United States, both through the previously discussed spread and through consolidation of power by leftist populist states. A close

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working relationship with the PRC, or the inclusion of Chinese systems in partner information architectures, compounds the problem of decreased partner willingness to cooperate with the United States, by making it difficult for the United States to share certain types of intelligence. The reciprocal side of lost US access is expanded access for the PRC. As the latter’s economic importance and political and security relationships grow, Latin American partners will become increasingly reluctant to turn down PRC initiatives, whether regarding political coordination or even police and military cooperation, despite the concern such cooperation will raise in the United States and the damage to the US relationship with the partner nation. In this manner, over the coming years, although the PRC may not sign explicitly anti-US alliances or basing agreements with governments in the region, Latin America and the Caribbean will likely be increasingly willing to allow the PLA to participate in security cooperation activities in such a way that creates risks and concerns for the United States if it finds itself in a large-scale military conflict with the PRC in the future.

The PRC as a Newcomer to the Global System As noted previously, the PRC has every right to be prosperous and secure. In the current, economically, politically, and otherwise interdependent world order in which China coexists with the United States and other states, however, the PRC’s right to prosperity and security must be balanced with those of other actors. A fundamental requirement of such coexistence is a system of rules and mechanisms to facilitate harmony and resolution of naturally occurring disputes. Chinese scholars may argue that the PRC had only a minor role in shaping the institutions and associated rules of the current world order, and bears no responsibility for accepting them. Such arguments, however, overlook that the meteoric economic rise of the PRC within the global system in the last half century owes largely to its voluntary incorporation into and benefit from that system. That the PRC was a latecomer in participating in the international system from which it has so substantially benefitted is thus not a valid excuse to engage in predatory practices that violate rules that they have formally accepted, and that limit the economic prosperity, security, or freedoms of others. That said, the rules and institutions of the international system are not and should not be immutable. In that sense, it is legitimate to hold a dialogue about Chinese versus Western concepts of free markets, individual rights, the rights of states, democratic systems of governance, and freedom

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of expression and discourse. Whatever the results of such a dialogue however, it is not possible to speak of changing the system if the PRC is not willing to live within the system of rules and commitments it has already accepted. The current de facto status quo in which the PRC increasingly encroaches upon the territorial rights, freedom of expression and economic interests of others, turning a blind eye or facilitating its companies to appropriate and exploit whatever intellectual property they can, while using soft power and economic threats to silence those who would object, is not acceptable. Such actions and tolerance for the behavior of its agents fundamentally position expanding PRC military, political, economic, and institutional power as a threat to its neighbors and global institutions.

China, Latin America, and US Policy In the wake of its perceived victory in the Cold War, the United States was seduced by the concept that its style of democracy and free market economic organization was inherently superior to other alternatives and that as the PRC developed economically and engaged with the Western-shaped world, it would become more like the United States.3 Such presumptions and hopes delayed US recognition of the inherent threat posed by the PRC and its rise. The recognition of China as a strategic competitor in the 2017 National Security Strategy4 was an important step forward in orienting the United States to face the challenge posed by China, even if the attempts by the Trump administration to negotiate with the PRC were sometimes naive and counterproductive. The relative hard line subsequently taken by the Biden administration, including those of Antony Blinken and Jake Sullivan in the new administration’s first summit with China in Anchorage, Alaska,5 demonstrated continuity of the orientation, despite dramatic departures by the Biden administration of Trump administration are policies in other areas. As the United States seeks dialogue with Latin America regarding Chinese engagement in the region, it is important to recognize that the region’s receptivity toward US messaging is influenced by the complicated history of US relations with the region. On one hand, at the grassroots level, US support for democracy and human rights has resonated broadly in the region, even if it is not always directly associated in the minds of Latin American publics with the actions of US leaders. On the other, periodic US interventions in Latin American politics, particularly when

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governments were moving in a leftward direction, has undercut the faith of its peoples in the sincerity of the US commitment to democracy and human rights, when it invokes such values in the pursuit of US policy objectives. While individual elites in the region may not all look negatively at the United States, all things being equal, they often would like to accept Chinese money and associated opportunities. In this context, the assertion or desire of Latin America’s historically rooted perceptions that the United States has consistently pursued its own national interest in the elites to believe that the United States only opposes China’s presence because of its own strategic interests allows those elites to draw a moral equivalence between the United States and the PRC as great powers pursuing their interests in the region. Doing so conveniently allows them to dismiss US warnings about Chinese predatory practices and their long-term effects, and simply “take the Chinese money.” During the Trump administration, however positive or negative the administration’s policies on their merits, the “America First” rhetoric of the president, compounded by his tweets and personalistic, often unpredictable, engagement style and the focus of the administration’s Latin American policy on immigration (to include cutting aid to Central America over the issue, renegotiating NAFTA, and withdrawing the United States from treaties such as the Trans-Pacific Partnership), facilitated the advance of the PRC by undercutting the goodwill that existed toward the United States in the region and allowing its elites to reduce the decision to transactional terms of accepting US or Chinese “gifts.”

Recommendations Because this book is written primarily for a US audience, its recommendations are focused toward US policy actions. It is strongly in the strategic interests of the United States, and the future of democracy, development, human rights, and good governance in Latin America and the Caribbean, for the United States to work together with its partners in the region and globally to strengthen the conditions to channel PRC presence in Latin America and the Caribbean in a direction consistent with democracy, rule of law, transparency, and strong, healthy institutions. In support of understanding the nature and dynamics of China’s advance in the region, and to identify the risks and appropriate concepts

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for managing them, US decision makers should study the phenomenon through the eyes of international business leaders and their approach to strategic analysis. Doing so offers useful insights with respect to understanding Chinese initiatives in particular sectors and how to understand the relevance of particular technologies, capabilities, and strategic markets in that advance. Such analysis may wish to not only look at individual Chinese proposals and projects through the lens of anti-trust regulation and associated assessment vehicles like the Committee on Foreign Investment in the United States (CFIUS). It may wish to apply the framework of monopoly-seeking behavior more broadly as a paradigm for understanding China’s strategy, including seeking insights from business literature regarding where such monopoly-seeking has been successful in the past, when it has been successfully resisted, and how. In engaging Latin America and the Caribbean on China, it is key for the United States to begin with strategic concept that contemplates coordination across the government, and between state and society (including business). Such a strategic concept should incorporate partners in the region, as well as its friends and allies in likeminded nations in other parts of the world, including Europe and Asia. Moreover, the design of such strategy and associated initiatives should be informed by the lessons of Chinese activity and the pushback against it in those other parts of the world, including not only Asia gone but Africa, Europe, and other areas.6 At the core of the US strategic concept regarding China in Latin America, as argued previously, it is imperative that the United States, in its actions and rhetoric, do not attempt to block the region from economic and political engagement with China. Attempting to do so would be both ineffective and counterproductive. On one hand, in a highly interdependent world of sovereign states, the PRC already plays an integral role in trade, financial systems, and the commercial life of Latin American and Caribbean states, as in the rest of the world. Within this context, the United States has neither the moral or legal authority, nor the tools, nor the power or social influence to prevent its partners in the region from seeking the promised fruits of commercial or other engagement with China. Adding to the counterproductive nature of such US attempts, because the United States has so long promoted the value of free trade and commerce in the past as a tool for the region’s development, any attempt to argue that economic engagement with one set of actors is unacceptable. At the same time, engagement with others is, would be too easily

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interpreted as a disingenuous attempt by the United States, to fend off commercial competition and foreign influence in its “own hemisphere.” As noted previously, Latin American political and business elites, who are already disposed for reasons of national, commercial, and personal benefit to engage with the PRC and take its money, naturally respond to such US efforts by asserting a moral equivalence between the pursuit of interests in the region by the United States and the PRC, allowing those elites to dismiss US warnings of danger in order to take the Chinese money. Rather than attempting to stop partners in the region from engaging with the PRC, the core of the US strategic concept must be on shaping the conditions and framework within which that engagement occurs, to ensure that it is less predatory, less damaging to the interests of the United States and the region, and more compatible with democratic governance and free markets. In short, the United States should seek, through its policy actions and programs, to help Latin America and the Caribbean better leverage the opportunities afforded by engaging with the PRC, while insulating itself against some of the risks and adverse impacts of those interactions. Doing so will advance the region’s prosperity in the framework of a free market democratic system, while showcasing the value of the United States as a good neighbor with a stake in the well-being and health of the democratic institutions of the region to which it is so closely connected. This work recommends a strategy for shaping Latin America’s engagement with the PRC through five axes: • First, use US leverage to fight for transparency in the region’s dealings with China. • Second, support technically competent, fair, and open mechanisms for the region’s management of interactions with the PRC and its companies, among other actors. • Third, support the full and equal application of national and international laws by Latin American states to Chinese and other actors operating in the region, • Fourth, selectively resist those types of Chinese engagements, such as telecommunications and e-commerce architectures, which put the ability of the country and the commercial entities operating in it to make sovereign, confidential decisions at risk.

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• Finally, use tailored, informed, communication strategies to help Latin American elites and publics to make good decisions regarding engagement with the PRC and other actors. Transparency The United States should use all appropriate persuasive tools and leverage reasonably available to it to oblige Latin American and Caribbean partners to conduct their interactions with the Chinese, like others, in the framework of the greatest possible transparency. As shown earlier, all too often, PRC-based companies are relatively unconstrained by their government’s weak or selective extraterritorial application of anticorruption restrictions analogous to the US Foreign Corrupt Practices Act. Consequently, those Chinese companies may seek to win contracts, secure approval of projects, or otherwise advance their objectives and the interests of the Chinese state through corruption or other improper means. In some circumstances, the deals that they offer benefit their firm, as well as the family or friends of the local elites signing the deal, more than the Latin American partner nation in whose name the deal is done. In other circumstances, such deals are simply not well analyzed or negotiated by the local partner, who may lack the staff or technical capabilities to do so. The adverse result of both is the same: less-than-transparent deals which are more beneficial to the Chinese than the local partner. US insistence on the transparency of transactions of the Latin American partner with the Chinese and others will not stop all corrupt or otherwise bad deals. It will, however, increase the likelihood that such poor choices will draw public scrutiny and accompanying political pressures inhibiting them from occurring. Such US attention and pressure will also act as a deterrent to local elites in structuring future deals with the Chinese with particularistic benefits, or with poor negotiation and analysis out of fear that it may cost them their access to the United States, or possibly even sanctions through the US Treasury Office of Foreign Assets Control (OFAC). In the process, such scrutiny will both advance the long-term interests of the partners, while exercising and strengthening mechanisms of freedom of information and democratic accountability. As a bonus, it will provide real proof to residents of the contributions of such information flows and accountability to the long-term prosperity and justice of their democratic system.

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In support of transparency, the US government should not only insist through diplomatic and public channels that partner governments in the region make public its dealings with Chinese (and other) companies and their activities in the country but also be prepared to expose available information regarding such interactions when they are not made public. The United States can also apply pressure for transparency by applying sanctions against governments and companies engaged in such nontransparent interactions, as well as against the government officials and other individuals involved through Treasury OFAC sanctions, among other vehicles. Technically Competent, Fair, and Open Evaluation Mechanisms In addition to seeking transparency, the United States should advocate for conducting associated evaluations and contracting through technically competent planning and evaluation processes, conducted openly on a level playing field. The United States should be prepared, where appropriate, to use its resources to help its partners to strengthen supporting processes in those areas, and to combat corruption and other impediments to them. Areas where it is critically important to engage in such a fashion include national requirements planning, the adjudication of contracts, and the approval of acquisitions and other nationally regulated processes involving the Chinese. With respect to planning, the United States should work to make the case to its partners, with the support of data, the value of determining in advance, through the country’s elected officials and the technical bureaucracies serving them, the development path that they wish for the country, as well as how to achieve it. Doing so includes designing the fashion in which the country will incrementally invest resources, and take other actions to solve societal problems, and advance the national economy in ways that benefit its people. In this regard, the United States must highlight the consequential difference between a country designing its own development path then using the resources of others (whether Chinese or others) to help achieve them, versus allowing outside actors to simply sell the government seemingly attractive products or services that ultimately benefit the seller, but do not necessarily create enduring value for the country. A key illustration of the way not to engage with China in this regard was interest by the Panamanian government of Juan Carlos Varela in spending $4.1 billion of the Panamanian people’s money on a contract

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to the PRC to build a fast passenger train between Panama City and David, the need for which was questionable, and did not appear anywhere in Panama’s 2030 national logistics plan.7 In such cases, the United States should highlight that the spending of money on Chinese products, even seemingly beneficial “infrastructure,” without it being part of a carefully formulated plan to advance the national development, is a recipe for ensuring that it will fail to provide the greatest, most enduring benefits for the country that could be achieved by spending that money. The United States has resources through Department of State–led programs to support the strategic and other requirements planning efforts of partner nations, and has used such vehicles in the past, although it should ensure that the products that it is providing are appropriate to the needs and capabilities of the partner receiving them. The United States should also ensure that the scale, associated budget for such support is adequate, and the funding is provided reliably through the course of the project. As a caveat, in structuring such planning support, the United States should also seek to ensure that the program is not so burdened with constraints arising from internal US political sensitivities and that the support provided is unhelpful or counterproductive for the receiving nation. As a complement to providing such capabilities, the United States should be prepared to use its public diplomacy to call attention to those cases, through the country’s media, and more broadly, where the government appears to be spending the people’s money on Chinese (or other) projects without adherence to such principles of good scientific planning and foresight. In addition to technically competent planning, the United States should encourage and support partner nations’ conduct of open, competitive procurements and related evaluations of proposals, whether involving the Chinese or other actors. When partners engage in exclusive “government-­ to-­government” deals with the PRC without considering other options, they are inherently put at a disadvantage in understanding how the cost of the project compares to comparable offers by others. This disadvantage is particularly acute if detailed proposals are not made that can be compared side-by-side by persons technically qualified to do so. When China loaned Costa Rica’s government money for PRC-based China Harbour to do improvements of its “Route 32” highway from the capital to the coast at Limon, for example, a later analysis discovered that the original proposal had not included certain necessary features, for which the Chinese contractor subsequently attempted to raise the price when obliged to include

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them.8 Again, the US government has the ability to provide both technical support to partner nations for the evaluation of such proposals and training to its own personnel to do so. As with requirements planning, which was discussed in the previous section, the United States should be prepared to use its public diplomacy and other information dissemination tools, both within a partner nation country, and more broadly, to highlight if it appears that it is conducting major transactions without competitive bids or technical evaluations, to the prejudice of the people of that nation, and the possible consequences. Beyond competitive procurements, the United States should also encourage partner nations to conduct technical reviews of major acquisitions and other projects, from a strategic, anti-monopoly, national security, environmental, and other perspectives. The United States has experience with such evaluations through its CFIUS process, as previously noted. The application of such laws, for example, could have facilitated recognition by the Chilean government of a threat to the nation’s interests from the acquisition of the Chilean assets of the Spanish company Naturgy by Chinese electricity giant State Grid, which ultimately gave Chinese companies a hold over 57% of power distribution in the country.9 Through encouraging and supporting such review processes, the United States can help partner nations to use the resources of their own governments, tailored to their own criteria and national situations, to identify strategic risks that a particular acquisition or other project could prevent to the interests of the nation. Of course, the specific criteria of concern among different partner nations may not be the same as those applied by the United States with CFIUS. Risks of interest to the partner nation may include the possibility that the Chinese (among other investors) acquire a monopoly in key sectors, or corner key technologies to the disadvantage of the local government, competing national firms, or the interests of local consumers. In addition, such an analysis could go beyond traditional economic or national security risks, looking for negative implications of the project or acquisition on the environment, or for indigenous or other community groups, in areas such as pollution, water rights, deforestation, or the impact on the usability of land by vulnerable populations. While many countries have laws in place for assessing project risks to some degree, they do not always apply to acquisitions or could benefit from the input of US, European, or other nation’s experience.

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Application of National and International Laws Beyond technical evaluations, where accepted by the partner nation, the United States should use its leverage and resources to help those partners more fully equally and transparently enforce their national laws. This should include, but not necessarily be limited to, violations of those laws by Chinese companies. While the PRC often technically has laws controlling the behaviors of its companies abroad in areas such as the environment, labor practices, or corruption, it does not always enforce them when doing so would harm the economic interests or impede the advance of those companies, and by extension, the economic interests of the Chinese state. All too often, the PRC only quietly reins in its companies when their behavior abroad generates sufficient controversy in the host nation so as to damage China’s bilateral relationship with the country or its reputation where it is pursuing interests. As a complement to the lack of enforcement by the Chinese government, often partner nations are unable to enforce their own national laws regarding the behavior of Chinese or other companies due to weak supervisory institutions, impeded by corruption. While PRC-based companies are certainly not the only ones that sometimes violate local laws, the United States and European countries tend to have a more extensive series of mechanisms for bringing their own companies to justice when they violate local laws in pursuit of their individual economic interests. Because of this, PRC-based companies have been notable violators in areas such as environmental compliance and labor laws. Strengthening the ability of partner countries to equally enforce their laws, including combatting corruption that impedes the functioning of relevant law enforcement, will thus help remove unfair competitive advantages that sometimes arise from PRC-based companies trying to avoid costs associated with environmental compliance (e.g., improper dumping), or reducing labor costs by violating regulations on working hours and conditions, or improperly using their own cheaper Chinese laborers instead of the proportion of local labor they have committed to employ.10 As in other areas, the United States has an array of tools and resources that it can use to help partner nations perform legal oversight, including automation, as well as the training of enforcement and judicial officers in appropriate areas. As in other areas, it should also complement these by assisting in providing information to the partner nation discretely, as well as through its media regarding cases in which Chinese companies are

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improperly benefiting, and harming local communities through violating labor, environmental, and other partner nation laws. Pushback with Alternatives Against Chinese Projects in Sensitive Areas While the best general posture for the United States is to help partner nations to more effectively manage and pursue trade, investment, and loan opportunities from the PRC, it may occasionally need to strongly advocate for those partners to choose a non-Chinese solution over a Chinese one. The areas in which it may most frequently make sense for the United States to play such a role are those in which a Chinese presence, in combination with PRC laws and practice such as the 2017 National Security Law, would position the PRC to compromise the ability of countries in the region, or companies and other entities in them, to operate with confidentiality and make sovereign decisions. As noted in Chap. 4, the presence of Chinese companies in Latin America’s telecommunications sector, surveillance and smart cities architectures, and e-commerce presents particularly serious risks in this regard. Because Chinese companies such as Huawei already have significant technical and cost advantages in competing in these spaces, and because there may not be appropriate US-based alternatives, the United States may need to work with the leading companies of like-minded democratic allies, such as Nokia or Erickson, to provide a commercially viable non-­ Chinese solution for sensitive architectures such as new 5G systems. Moreover, the United States may need to provide a combination of commercial offsets and political or diplomatic incentives to induce the partner to select the non-Chinese solution. The United States can also help the partner to determine that the solution adopted does not inadvertently include Chinese components or the presence of Chinese companies and interests behind the non-Chinese partners chosen. Related to providing commercially viable alternatives to Chinese products, the United States should, where possible, provide alternatives to Chinese loans, investments, and other funds, through both government and private sectors. The US expansion of the Development Finance Corporation (DFC) during the Trump administration was a positive move in this regard, as was the effort to channel private sector investment to strategically valued partners as a transparent, market-oriented alternative to working with the Chinese, as the Americas Crece program sought to

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do. America Crece, however, effectively ended with the Trump administration. Nor is it clear whether the DFC will be able to reliably channel a sufficient number of private sector funds to provide a realistic, timely alternative to Chinese loan and investments. In September 2021, the Biden administration sent Deputy National Security Advisor to Ecuador, Colombia, and Panama looking for opportunities to counter Chinese infrastructure projects with its own under the administration’s Build Back Better World (BBBW) initiative, yet no specific funding for the effort was announced.11 It is also not clear whether difficulties in funding projects in high-­ income countries, or focusing on projects consistent with administration’s environmental and social agenda, would allow it to effectively compete with the Chinese offering. To the extent that new DFC is concentrated on the funding of clean energy projects (without explicit imperatives to exclude Chinese components and subcontractors), there is a risk that programs its programs, depending on how they are structured, could actually subsidize the participation of PRC companies in the region, rather than providing an alternative to them. In some cases, the United States may simply need to provide resources to partners at critical moments to help them to avoid falling prey to the PRC. One example was the use of the Development Finance Corporation to buy out $2.8 billion in Ecuadoran debt to the PRC, to give the government of Lenin Moreno options to resist Chinese pressure to allow PRC-­ based companies in Ecuador’s 5G architecture.12 Finally, the United States must be prepared to provide expanded aid to the region, through organizations such as USAID.  It should do so in coordination with, and as a complement to, private sector investment, as well as donations and contributions through private charities. There are some areas in which addressing immediate human needs, and developing capacity, such as in health and education, is not only the right thing to do, but it also contributes to a strategically invaluable base for resisting a turn to populist solutions. This is because extending the life of populist regimes ultimately bring about more suffering and, as noted previously, further open the door and create vulnerabilities to predatory engagements with the PRC.

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Informed Public Diplomacy and Tailored Communication Strategies The United States must do a better job in communicating with partners and the world regarding why adhering to the choices discussed in this chapter are in their interests and not simply behaviors that support the goals of the United States. Effectively transmitting this message requires that the US government, including its intelligence agencies and State Department organizations such as the Global Engagement Center (GEC), gather and organize data relevant to making the case. Such data could include, but is limited to, information about the frequency with which PRC-based companies declare investments and other initiatives, which ultimately do not occur. It also could include information on the rates with which Chinese companies versus others are removed from contracts for non-performance. Another useful item of data would be numbers and details regarding cases where the actions of PRC-based companies generate significant community resistance, as measured by social protests, strikes, and other public reactions. Similarly, data collected and analyzed could usefully cover the number of times in which PRC-­ based companies are taken to task for violating labor, environmental and other government laws, and the frequency with which Chinese infrastructure projects are not completed on time, have significant numbers of defects, or result in lawsuits or similar complications. Ideally, it should do so in a way that facilitates comparisons between the performance of Chinese and non-Chinese companies. Potential examples abound of the types of cases that could be useful to document and categorize. The Ecuadoran government, for example, became involved in a dispute with Harbin Electric International, over accusations that the Chinese had not hired the promised number of Ecuadorans for a power distribution contract.13 Similarly, in Barbados, the Chinese contractor Complant was accused of bringing in 200 Chinese workers on the Wyndham Sam Lords Castle project in contravention of its commitments.14 Beyond simply collecting data, it is important for the agencies managing it to organize, post, and advertise that data so that it is known to and available to decision makers and leaders at all levels. Such key data users range from ambassadors and other US personnel at the embassy level to senior US State Department and other leaders preparing to engage with their Latin American counterparts. In this fashion, the data effort would

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help to arm personnel across government and beyond, with geographically and contextually relevant examples of why it is important to be cautious when dealing with the PRC and its companies, and when appropriate or necessary to engage with the PRC, to do so through a lens of transparency, and open, technically competent evaluation processes, and the universal application of national laws. In its communications strategy, the United States should target different audiences within in the partner nation in different ways, with tailored data and messages, appropriate to the position and motivations of the audience. For business and other leaders planning to take advantage of deals with the PRC for their own benefit or without concern for the consequences to the country, the United States should make clear its awareness of their current or planned behavior, including its illegal nature or its potentially prejudicial impact on the interests of their own people, and the ability and intention of the United States to sanction them through Treasury OFAC sanctions or other vehicles for doing so. For this audience, a discrete, private, but firm message may often be more effective than a public threat. For those other elites whose position is threatened by China’s advance in the country and dealings with their rivals, the United States should facilitate the availability of credible information in a discrete fashion, regarding the collaboration of the PRC government, companies, and other actors with their local competitors. Doing so would give those elites the opportunity to use their own networks within the country to resist the threatening deals, as appropriate to their national laws. For publics of the affected countries, as with elites adversely affected by the Chinese advance, the United States should facilitate the transmission of accurate and credible information through interested reporters and other sources, including information about nontransparent deals and other improper collusion between local actors and Chinese counterparts, or violation of local contracting, labor, environmental or other laws. US help in making such information public would help the recipient audiences to be aware of and potentially mobilize against the risk so as to bring pressure on the political and business figures involved to cease such behaviors, and properly enforce local laws with respect to Chinese activities in the country. Beyond simple targeted messaging, US public diplomacy efforts should do more to highlight PRC efforts to “silence the debate” in the region regarding bad Chinese behaviors on topics such as PRC abuses of

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democracy and human rights in Xinjian, Hong Kong, Tibet, and elsewhere. The United States should also do more to publicly call out actors otherwise cloaking themselves in the banner of democracy and free speech in the region within Latin America and the Caribbean who apply a double standard with respect to their silence on Chinese bad behaviors. The United States should particularly call out such hypocrisy and double standards where that silence appears connected to the receipt or continuation of benefits from the PRC or its agents to those elites personally or to their company or institution. Within the context of long-standing corruption and cynical behavior in Latin America and the Caribbean, the United States should look for ways to focus public debate on the ugly relationship between the “interested silence” and the receipt of benefits, as well as to its impact in compromising the independent sovereign choices and expressions that the region holds dear. Beyond the focus on the activities of the PRC, its agents, and local partners, the United States can and should do more to highlight its genuine shared interest in the security, development, and well-being in the region, through both our words and actions. Doing so will have additional beneficial effects in increasing the credibility of the aforementioned messages on China, if the US reasons for wanting to help the region truly get a better deal from China are perceived as credible. Finally, to further bolster the effectiveness of its message, the United States must do more to invest in shoring up our “brand,” helping the Latin American people see, through its example, the US commitment to democracy, tolerance, and respect for human rights, as well as multilateral democratic institutions both at home and in its engagement with the region. Being a good example, and giving the people of the region reason to believe in the sincerity and consistency of the US commitment to such values alone, is certainly not enough, and the United States must be cautious to not take actions that are morally right in principle, yet open up a door to the advance of the PRC with the partner regime. Nonetheless, in principle, doing the right thing, and being perceived in the region as committed to doing the right thing, is fundamental to US credibility. Doubt about such US commitments undermines US public diplomacy efforts and everything else the United States does.

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Conclusion The ability to successfully navigate the challenge presented by China’s growing power and global engagement will determine the character of the future world order and the security and the position of the United States within it. The health of the institutions of that global order and the prevalence of Western style democracy, human rights, and rule of law fall in the balance. While the Western Hemisphere is not the only arena in which that struggle is playing out, it is the one in which the outcome most directly impacts US security and prosperity. This work has detailed the complex dynamics through which the PRC is advancing in its objectives in Latin America and the Caribbean, as an illustrative case of its advance globally. It has highlighted the way in which the PRC has used the tools of government in conjunction with the private sector, to secure access to, and the value added from the extraction of the region’s commodities and foodstuffs, as well as the sale to the region of its ever higher value-added products and services. It has particularly highlighted the role of the PRC drive to dominate and leverage connectivity in that regard, from roads, railways, and ports to electricity, telecommunications, and e-commerce connectivity. This work has further examined how PRC-based companies and the Chinese state implicitly and explicitly use the tools of soft power in pursuit of its quest for secure access to goods and markets, strategic commercial position, and other goals. The Chinese government has been relatively successful in capitalizing on needs and hopes for personal, company, and national benefit by the region’s elites, despite their mistrust of the PRC. Through looking at how Chinese soft power plays out through the hopes and calculations of those elites, this work has highlighted how the PRC penetration of Latin America has more of the characteristics of a civil war, than an internal assault, and is one that the region is losing, little by little. This work has shown Chinese soft power to be, in some ways different from, yet in some ways, greater than the United States’ own soft power in the region. It has shown the expectation of benefit, more than value alignment as its principal tool, although Chinese influence also has employed mechanisms of cultural attraction as well, albeit in different ways from that of the United States. As complements to Chinese soft power, this work has explored the role of the PRC in incubating leftist authoritarian populist governance in the

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region, as well as how it has used the diplomatic struggle over recognition of Taiwan to advance its commercial and other strategic ends. This work has also shown that PRC military activities in Latin America, while not the central facet of its engagement, nonetheless play an important role in both responding to PRC needs and opportunities in the region and supporting long-run PRC goals. Finally, this work examined how the effects of the Covid-19 pandemic, and PRC exploitation of them, have opened up significant new opportunities for Chinese advance in the region. For the generation that witnessed the US “triumph” in the Cold War, it is almost unfathomable to grasp that so few years after the 1989 fall of the Berlin Wall, the United States and world are in an even more difficult struggle against a global adversary, which leverages the tools of global economic interdependence and new technologies to outpace the advantages of the US and the global democratic free market system, even as the West continues mired in internal conflict and the paralyzing effects of Covid-19. As with the Cold War, the outcome of the present struggle is not predetermined. Nonetheless, without significant corrective action, expanding Chinese engagement in Latin America, as elsewhere, is leading toward a region dominated by populist authoritarian states economically subservient to the PRC and in which democratic expression and state action are permissible only insofar as they do not challenge those Chinese interests. Such a hemisphere does not promise an acceptable level of security for the United States, nor fertile ground in which the values of democracy, human rights, free markets, and the rule of law, the foundation of the US system, to prosper. The present chapter has outlined the course of action that the United States must take to counter that challenge, based in a strategic concept of transparency and working with our partners in the region to serve US interests by being a good neighbor, helping the region’s governments and peoples to get the best from what China has to offer, and avoiding the worst risk of predatory Chinese engagement through helping the United States’ neighbors to strengthen their institutions, universally apply their laws, provide economically viable alternative where appropriate, leverage data to communicate more effectively the threat, and be ourselves examples of commitment. Winning the present millennial struggle will require inspiration and initiative, and a sincere partnership with the region with which the United States is bound by ties of commerce, geography, and family. The cost to do so will be high, yet the consequence of not rising to the occasion is unacceptably higher.

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Notes 1. Bernal-Meza, p. 310. 2. See, for example, Xulio Rios, “La relación China-America Latina y sus implicaciones para los Estados Unidos,” in Política Exterior China: relaciones regionales y cooperación, Raquel Isamara Leon de la Rosa and Juan Carlos Gachuz Maya (Puebla, Mexico: Benemérita Universidad Autónoma de Puebla, 2015), pp. 279–306. 3. See, for example, Bill Powell, “How the Chinese Communist Party Outwitted American Capitalists,” Newsweek, July 1, 2021, https://www. msn.com/en-­u s/news/world/how-­t he-­c hinese-­c ommunist-­p arty-­ outwitted-­american-­capitalists/ar-­AALEFYa. 4. “National Security Strategy of the United States of America,” 2017. 5. Abagail Williams and Dartunorro Clark, “Top U.S., China diplomats have public spat as Alaska summit opens,” NBC News, March 18, 2021, https://www.nbcnews.com/politics/politics-­news/top-­u-­s-­china-­diplomats­have-­public-­spat-­alaska-­summit-­n1261490. 6. See, for example, Ellis, “Chinese engagement in Latin America and Europe,” 2021. 7. “Varela’s high speed dream train to Chiriqui nixed,” Newsroom Panama, September 6, 2019, https://newsroompanama.com/news/varelas-­high­speed-­dream-­train-­to-­chiriqui-­nixed. 8. “Costa Rica. China Subirá Costo de Ruta 32 Y Podría Alterar Préstamo,” Inventariando China, April 29, 2015, https://inventariandochina.wordpress.com/2015/04/29/costa-­r ica-­c hina-­s ubira-­c osto-­d e-­r uta­32-­y-­podria-­alterar-­prestamo/. 9. Fuentes, 2020. 10. See, for example, “Empresas chinas violan derechos humanos en cinco países de la región,” Ocmal, May 31, 2018, https://www.ocmal.org/ empresas-­chinas-­violan-­derechos-­humanos-­en-­cinco-­paises-­de-­la-­region/. 11. The Times, https://www.thetimes.co.uk/article/d0cdb4de-­2092-­ 11ec-­8cb7-­e60ba8dbca61?shareToken=940b9ae41dbb7a0bef4b87157be 3cbd3. 12. Prashad, 2021. 13. Javier Montenegro, “China y Ecuador entran en otra pugna contractual,” Expreso, January 6, 2021, https://www.expreso.ec/actualidad/china-­ ecuador-­entran-­pugna-­contractual-­96481.html. 14. Sherrylyn Clarke, “Complaints over Chinese workers at Sam Lord’s site,” National News, July 31, 2021, https://www.nationnews. com/2021/07/31/complaints-­chinese-­workers-­sam-­lords-­site/.