By Dr. Zahra Sharifzadeh, Editorial Board Member of the Iranian Journal of International Relations
A brief look at history reveals that Chinese immigrants and laborers have been present in Latin America for several centuries. Political and commercial relations between China, Taiwan, and countries in this continent, especially after the global financial crisis of 2008, have grown significantly, indicating China's expanding engagement in the region over the decades. In this process, China has made extensive investments in agricultural, cultural, and mining products, focusing primarily on raw materials, often accompanied by infrastructure projects. This analysis aims to explore the historical influence of China in Latin America and address the question: What is China's objective in Latin America? The hypothesis is that China seeks to expand its sphere of influence through what is called "South-South cooperation," a development framework focused on aid, investment, and trade.
The presence of Chinese people in Latin America dates back to the 16th century when maritime trade brought Chinese goods and people to what was then the Spanish viceroyalty of New Spain. In the 19th century, Chinese laborers were forced to work in several Latin American countries, particularly in Cuba's cotton and sugar plantations and Peru's mines and industries.
The "Coolie trade" and their marriages with local women led to the formation of the first Chinese-Latin American communities. Additionally, small groups of nationalist Kuomintang refugees entered Latin America after their defeat by the Chinese Communist Party on the mainland in 1949. Despite the presence of some Taiwanese communities, except for Cuba, no Latin American country recognized the People's Republic of China, established in 1949.
China's split from the Soviet Union in the 1960s and its rapprochement with the United States led to the establishment of formal diplomatic relations with several Latin American countries in the early 1970s, including Argentina, Chile, Mexico, and Peru. However, the most significant wave of Chinese involvement in the continent occurred in the past decade. China has become the largest trading partner of Brazil, Chile, and Peru and a crucial trading partner for many Latin American countries. Ecuador and Peru have become the main destinations for Chinese foreign direct investment in mineral resources. In these countries and elsewhere, Chinese mining projects are often accompanied by large infrastructure developments carried out by Chinese state-owned companies. Chinese businesses are investing in various industries across Latin America, with small entrepreneurs opening internet cafes and supermarkets throughout the region.
China has also started investing in oil extraction in the Amazon, and the rapid pace of Chinese investment in the region sometimes creates the perception that there is an irreconcilable gap between Chinese strategies and the established practices of Western governments and companies. It's important to consider that China's involvement in Latin America is part of a broader "going out" strategy, which involves the internationalization of the Chinese government and companies. In this process, Chinese companies align their practices with international competitors. As a result, Chinese state organizations and companies adapt their strategies to the specific conditions of their host countries. Since the start of the so-called "reform and opening-up" period in the 1980s, Chinese investment, migration, and political engagement have been felt widely across the globe.
China's increasing global influence is clearly connected to domestic developments, such as the reduction of political control and the encouragement of local entrepreneurship since the 1980s, the opening of special economic zones, and the continued state ownership of strategic industries. Since the 1992 trip of Chinese leader Deng Xiaoping, the rapid privatization of state assets and the development of state-led capitalism in the People's Republic of China have been accompanied by increased overseas investments. In 1999, the Chinese government announced its "going out" policy to support and enhance China's overseas investments. Beyond balancing China's massive foreign exchange reserves, one of the key goals of this strategy is to equip Chinese companies with the skills and experience to compete with global rivals currently operating in China. Following these changes, the developing world has become a focal point of China's foreign policy.
In exchange for access to mineral resources and raw materials by 2010, Chinese companies and government organizations invested heavily in infrastructure projects across Latin America. Chinese companies secured numerous contracts to build roads and participated in major hydroelectric, oil production, and other projects. As a result, the development of railways and hydroelectric power plants, sectors such as renewable energy production, automotive manufacturing, telecommunications, and the exploitation of strategic minerals like copper and lithium have diversified the range of relationships between this Asian giant and the vast geography of Latin America. According to the Economic Commission for Latin America and the Caribbean, Chinese companies' investment in Latin America in 2020 was particularly prominent in the automotive and auto parts sectors (44% share), renewable energy (17%), financial services (11%), and consumer goods (6%).
It should be noted that in late 2010, Sri Lanka received a $1.3 billion loan from China to develop a port in the Indian Ocean. After failing to repay the loan installments, Sri Lanka was forced to lease the port to China for 99 years! This has led to concerns that China is pursuing long-term goals through low-interest or sometimes interest-free loans. Rex Tillerson, former U.S. Secretary of State (under Donald Trump, 2017), believed that China's loans had a "predatory" nature. In fact, there are concerns that borrowing countries (like Sri Lanka) could lose their national sovereignty over a loan. During a confirmation hearing in August 2021 that led to her nomination to head the U.S. Southern Command, Laura Richardson said that China had come to the region with highly manipulative objectives, offering millions of dollars in loans to achieve its interests in other countries.
In recent years, 19 Latin American countries have signed cooperation agreements with China under the "Belt and Road Initiative," raising concerns in Washington. Moreover, the latest figures highlight the possibility that as the world emerges from the COVID-19 crisis, China could be the only major economy to experience significant growth.
China's relationship with Latin America is not only economically significant but also politically important because Latin America is the "backyard" of the United States, which claims ownership of Latin American countries. Although China rejects such claims, Chinese state and regional media reacted after the U.S. did not invite Cuba, Venezuela, and Nicaragua to the Summit of the Americas in Los Angeles, stating that Washington cannot use the summit to undermine China-Latin America relations. For a long time, Latin America has suffered from U.S. policies. Since the United States proposed the Monroe Doctrine to control Latin America in 1823, the region has been subject to U.S. military intervention, political manipulation, unwarranted sanctions, and inflation. With more Latin American and Caribbean countries likely to see leftist leaders come to power, this region is showing a tendency to break free from U.S. control. Additionally, the U.S. has lost the support of more Latin American countries due to its sanctions and accusations against Russia following the start of the Ukraine war.
Culturally, China has announced plans to publish 50 books on the historical, cultural, and human topics of Latin America over the next decade to improve Chinese understanding of the region. This collection, which is the first large and systematic initiative by China to enhance knowledge of Latin America, will involve prominent experts from Mexico, Brazil, Uruguay, Peru, Argentina, and China. Currently, there are relatively few books on Latin America in China, most of which are translations based on European and American perspectives. Therefore, the publication of this collection will help the Chinese understand the "real and integrated" Latin America without relying on Western viewpoints. Currently, 156 higher education institutions in China offer programs in Spanish, 57 institutions offer Portuguese, and 63 institutions focus on Latin American studies.
China adjusts its approach to the political and social structures of individual countries, often bypassing national governments to advance its interests at the local level. Through trade, loans, and political support, China has provided an economic lifeline to authoritarian regimes and supported the region's democratic backsliding. It is important to note that China's presence in Latin America may also be aimed at engaging the United States in this region to prevent it from interfering in China's own "backyard" (Taiwan).
Sources:
Tahmasbi Benfesh Daragh, Elaheh (2021), "China-Latin America Relations: From Economic Strengthening to Cultural Understanding," retrieved from link.
Bi Ta (2022), "China: The United States Considers Latin America as Its Backyard," retrieved from link.
"China's Objectives in Latin America" (2020), Mashregh News, retrieved from link.
Hans Steinmüller (2014), "China’s Growing Influence in Latin America," retrieved from link.
Editorial Board of the Iranian Journal of International Relations
[1] The Kuomintang Party was established in 1913 after the overthrow of the Qing Dynasty in China and took control of the Chinese government in 1919 after various struggles. Future Communist leaders such as Mao Zedong and Zhou Enlai held significant positions in Kuomintang's peasant and military institutions. The Kuomintang appeared to embody four main class forces: workers, peasants, urban middle classes, and the national bourgeoisie, which seemed to be natural anti-imperialist and anti-feudal forces.
