En route to Latin America, Secretary of Defense Jim Mattis pointed out the risk of China’s influence in the region, telling the press: “There’s more than one way to lose sovereignty in this world; it’s not just by bayonets.” He added, “It can also be by countries that come in bearing gifts and large loans and things like we have seen in other parts of the world.” Mattis is right, but the U.S. doesn’t seem prepared to address these concerns. That’s a problem.
In that same conversation, Mattis spoke about the U.S. interest in partnerships with Latin America and the need to work together. He explained that he was “going to start by doing a lot of listening to understand where they’re at.” Generally, listening is a good place to start, especially given the history of U.S. involvement in Latin America.
The only issue is that the U.S. should have been interested in listening a while ago and China isn’t waiting around for the U.S. to figure out what’s going on before continuing efforts that give Beijing influence in the region.
Already China has moved to include Latin America in its Belt and Road Initiative, and over the last decade, Chinese banks have already provided $140 billion in loans there. These investments are primarily beneficial, not to Latin American nations, but to Chinese firms which enjoy the support of the ruling Chinese Communist Party. This has allowed China to expand market reach and secure access to commodities and natural resources. Additionally, many of the jobs that are “created” in partner countries go to Chinese workers at the expense of local populations.
China’s financing also functions differently than that coming from the West. China has emphasized that it will not intervene in sovereign affairs or impose conditions, such as austerity, on loans. These practices are enticing for Latin American countries who have previously been subjected to boom and bust cycles but also, since they lack conditions, may promote unrestrained spending creating future debt problems.
How successful has China been in investing in Latin America? By the numbers, China is now the top trading partner of Brazil, Chile, and Peru, and is gaining ground elsewhere as well.
As Mattis makes his rounds in Brazil, Argentina, and Chile, and meets with the newly elected Colombian President Ivan Duque, he should not only focus on figuring out what influence China has, but also on maintaining the sovereignty of those countries and strengthening U.S. partnerships.
Recently the Trump administration and then-Secretary of State Rex Tillerson offered warnings about Beijing saying that China offers “the appearance of an attractive path to development … in reality, this often involves trading short-term gains for long-term dependency.” Despite these warnings, the U.S. has been slow to offer up credible alternatives to Chinese investment while Beijing has continued to peddle its rhetoric of “win-win cooperation.”
Tillerson, however, was right to warn about China’s intentions, especially given the recent successful takeover of a port in Sri Lanka financed by Chinese money and economic maneuvering to avoid the pain of the U.S. imposed trade war. Economic and political interests are intertwined and Beijing has demonstrated that it has no qualms about getting what it wants in foreign countries.
In Latin America, China hopes to break the long-standing partnerships in the Western Hemisphere and reorient interests east. Although at first glance this seems to be primarily an economic goal, it is also political. As countries hope to hold onto and attract additional investment, they suppress criticism of deals with China and have begun to support China’s political ambitions, such as claiming control over Taiwan.
To counter these ambitions, the U.S. needs a coordinated strategy.
Currently, the U.S. dominates international organizations such as the United Nations and the World Trade Organization. Instead of pulling back from engagement with these institutions, the U.S. needs to maintain a strong presence and ensure that China cannot simply implement its own rules in the absence of U.S. leadership. Moreover, the U.S. must be an advocate of free trade and call out China’s efforts to establish economic leverage over sovereign states. We also should not undermine relationships or make unsubstantiated remarks about a country’s people or leadership.
Unfortunately, the U.S. has instead attacked international institutions, started a trade war, and the president has continued to take a confrontational approach with foreign leadership.
Hopefully, Mattis’ weeklong sojourn in Latin America will give U.S. relations a boost and encourage cooperation within the Western Hemisphere while also helping Mattis and the Trump administration develop a more concrete plan of engagement to counter China’s growing dominance.
