The United States is losing ground to China in the battle for influence in Latin America and the Caribbean (LAC). The People’s Republic of China (PRC) is strengthening its relationships in the region often called “America’s backyard.”
China’s growing footprint in the region has raised concerns in Washington that the PRC is leveraging its economic might to further its strategic goals and displace American dominance in the region.
As General Laura J. Richardson, commander of the United States Southern Command, testified before Congress in March, “The PRC continues its relentless march to expand its economic, diplomatic, technological, informational, and military influence in LAC and challenge U.S. influence in all these areas.”
The region is increasingly important to China in both economic and political terms. It possesses an abundance of natural resources and raw materials, and a productive environment for trade and investment.
In addition to securing strategic resources, expansion in the region helps China increase its sphere of influence and achieve certain political goals in the global geopolitical chess game by challenging the U.S. in its own neighborhood; one the U.S. overlooked for years as it focused on the Middle East and elsewhere.
The PRC is now South America’s top trading partner and a major source of foreign direct investment and lending in energy and infrastructure. It is also forging cultural, educational and political ties.
For instance, in 2000, less than 2 percent of LAC exports went to China. By 2021, that number had risen to $450 billion. China is currently the second largest trading partner for LAC after the U.S., and LAC-China trade is expected to more than double by 2035.
Another Chinese objective is to use economic agreements to isolate Taiwan by persuading LAC countries to abandon diplomatic recognition of Taiwan’s sovereignty. Currently, 25 of the 33 Latin American countries recognize the PRC rather than Taiwan.
The COVID-19 pandemic further elevated China’s status in the region. Beijing supported Latin America early on with large shipments of masks, personal protective equipment, medical supplies such as ventilators, diagnostic test kits and vaccines to curry favor with the various countries.
In September 2013, Beijing officially launched the trillion-dollar Belt and Road Initiative (BRI), using a name that harkens back to the famed Silk Road. It is at the center of Chinese foreign policy and includes a web of investment programs that seek to develop infrastructure and promote economic integration with partner countries. It represents a direct threat to the US because China is seeking to use it as a connective link with the whole world on its path to becoming the global superpower.
Since 2017, 21 LA countries have signed on to the Belt and Road Initiative and more are expected to join. In the face of China’s footprint in LAC, the Monroe Doctrine seems to have been forgotten.
In response to China’s impressive trajectory in LAC, President Biden, who took the lead on LAC policy during the Obama administration, and the G-7 leaders agreed in June 2021 to launch a global infrastructure initiative, Build Back Better World (B3W). This initiative is consistent with the view that China is a strategic competitor to the U.S. in the global superpower game that some call a new Cold War.
B3W seeks to offer an alternative to China’s BRI. Its goal is to advance infrastructure development in low -and middle- income countries, including LAC. It is an international extension of the White House’s domestic Build Back Better proposal. The LAC is the first region on the B3W’s radar.
How the initiative will be implemented to compete successfully with China in LAC is an open question. What is clear, however, is that the superpower rivalry is good news for LAC countries.
History may show Latin America to be among the winners of the new Cold War. The U.S. will now pay the requisite amount of attention to the region and provide welcome resources.
Joseph M. Giglio is a professor of strategic management at Northeastern University’s D’Amore-McKim School of Business.